The busiest airport in the U.S., nearly 20 Fortune 500 companies, an up-and-coming film industry — there are a lot of reasons to need a hotel in Atlanta.
And while the city already boasts a robust hotel supply, many more rooms will open to travelers over the next few years. As of the third quarter of 2023, Atlanta’s hotel construction pipeline is the second-largest in the country, behind Dallas, with 140 projects, or 17,775 rooms, according to Lodging Econometrics. The city also expects to see 20 projects open in 2024 and another 24 in 2025.
“I spent some time on the hotel side in my earlier career, and I kind of watched Atlanta grow,” Mark Vaughan, executive vice president and chief sales officer of the Atlanta Convention & Visitors Bureau, told Hotel Dive. “During the [1996] Olympics, there were 60,000 hotel rooms in Atlanta, and now there's going to be 110[,000].”
Hotel Dive spoke with experts about Atlanta’s hotel performance, the hotel construction boom and what it all means for hoteliers in the Peach State.
The state of the market
RevPAR for Atlanta hotels peaked in 2019, according to Courtney Vris, senior project manager of HVS’ Atlanta office, and the market has yet to recover to its pre-pandemic levels. Playing catch-up with 2019, though, may be tougher for Atlanta than many other cities — it hosted the Super Bowl that year.
At the end of 2022, citywide occupancy was 64.9%, slightly lower than 2019’s level of 69.5%, Vris said, citing STR data, though as of October, occupancy was pacing at 1% growth year on year.
The story of Atlanta’s hotel market performance, then, is one of segmented growth.
“Similar to how it's been in many markets, leisure [was] the first to come back,” Vris told Hotel Dive. That was followed by business travel, which was followed by meetings and groups.
“So downtown Atlanta, which is heavily reliant on convention activity, they've been seeing a particularly slow recovery,” she said, noting that other parts of the city have recovered more quickly. “The airport has been logging fantastic passenger traffic counts, and those properties [nearby] have been actually doing really well.”
The city’s RevPAR growth over the past few years has been “primarily driven by rate growth,” Vris said, similar to other markets like New York City. Vris expects ADR growth to remain strong. “We're not expecting a normalization or any sort of decline in ADR moving forward,” she said.
Brett Testa, a project manager at HVS Atlanta, pointed out that lagging occupancy recovery and the city’s hotel construction boom are closely related.
“There was a pretty massive supply growth between ‘16 and ‘19,” he said. “I think a lot of it is waiting on people to come back, but then also absorbing that supply into the demand structure.”
Hotel construction
Last year, Atlanta saw the openings of the 16-story Hyatt Centric Buckhead, the 230-room Kimpton Shane Hotel, Margaritaville Vacation Club by Wyndham and Nobu Hotel Atlanta. In 2023, the city welcomed Four Points by Sheraton Atlanta Downtown. Next year, there are plans to open lifestyle hotel Motto by Hilton and convention hotel Signia by Hilton.
Atlanta has never had the level of Chicago or New York or London [...] Atlanta is finding its own voice in the hospitality world.
Brett Testa
project manager at HVS Atlanta
And though the hotels that have opened or are scheduled to open span sizes and segments, it’s the boutique and lifestyle hotels that are really shaking up Atlanta’s scene, the Atlanta Convention & Visitors Bureau’s Vaughan said.
“The character of a community is often driven by the boutique lifestyle hotels, and 15, 20 years ago, we were very under indexed on that, and now we're doing very well,” he said, pointing to Hyatt’s Thompson Atlanta - Buckhead as an example of a “really cool lifestyle hotel.”
Talk to hoteliers in Atlanta, though, and there’s one project everyone will mention: the forthcoming Signia by Hilton, scheduled to open in spring 2024. The 976-room hotel will be the largest ground-up development in downtown Atlanta in 40 years. It will also be the first ground-up build for Hilton’s new Signia brand.
With its rooms supply, location near the Georgia World Congress Center and Mercedes-Benz Stadium and a 7,888-square-foot ballroom — billed as the largest hotel ballroom in Georgia — the property aims to capture travelers in town for events and conventions, a major driver for Atlanta’s hotel occupancy.
Meetings and events
According to Vaughan, in 2023, Atlanta will have 18 events that will occupy over 5,000 rooms on each event’s peak night. In 2024, Vaughan expects 21 events.
“We have 13,000 hotel rooms within a mile of the Georgia World Congress Center,” Vaughan said. “When the hotel market gets to 20 major events like that, it really drives a lot of engines here, and it's very good for the industry.”
Events driving business travel to Atlanta
HVS Atlanta’s Testa noted that future events are driving further construction. The 2026 World Cup, in particular, is expected to draw sports fans to the city.
“I think that a lot of folks are trying to get bricks on the ground before the World Cup,” he said. “But even beyond that, all the infrastructure that they're creating for the World Cup is going to create stickiness for group travel for years to come.”
And though business travel drives the majority of Atlanta rooms demand, Vaughan said, “we’ve got a really good leisure product too.”
In October, the Michelin Guide released its first-ever guide to Atlanta restaurants, some of which were in hotels, such as St. Regis Atlanta’s now one-star restaurant, Atlas.
Potential headwinds
Though Atlanta’s hotel market is strong, the city’s hoteliers are not immune to the issues plaguing their counterparts in other cities.
“The headwinds that we acknowledge currently when we do work for our clients is just general economic uncertainty,” said Vris. “That's on a macro level, nationally.”
Vaughan said he believes the largest challenge for hotels in the area is labor. Signia by Hilton, he said, will have 700 jobs when it opens. “That will probably put a little pressure on the market,” he said.
“Properties that pay a decent wage don't seem to have that issue,” said Testa. “It seems to be you can pick that battle or not.”
“Other than new supply and labor, I think Atlanta is a really ripe market,” he added. “It's just filling the shoes that we've got, and developing a deeper hospitality culture here. Atlanta has never had the level of Chicago or New York or London or anything like that. But I think that it's growing and getting bigger. Atlanta is finding its own voice in the hospitality world.”
