Southeast U.S. Hospitality Market Report | Q1 2025

The Southeast U.S. hospitality sector opened 2025 with renewed investor focus, driven by strong event calendars, group travel recovery, and stable drive-to leisure demand. While some Florida submarkets are adjusting to post-COVID rate compression, urban metros like Atlanta, Miami, and Nashville are experiencing midweek demand resurgence and capital inflows targeting stabilized limited-service assets.

As a capital markets advisor and ownership representation firm, Cornovus Capital supports clients navigating the cost and entitlement complexities unique to the Southeast region. This Q1 2025 report delivers performance insights, investor sentiment trends, and asset-level dynamics in top markets including Florida, Georgia, Tennessee, and the Carolinas.

Regional Performance Overview

In Q1 2025, the Southeast U.S. posted moderate RevPAR growth of 2.2% year-over-year, supported by steady ADR increases and improved occupancy in key event-driven metros.^[1] According to CBRE and STR, coastal luxury markets are experiencing pricing normalization, while inland markets like Orlando, Tampa, and Atlanta are outperforming expectations due to a resurgence in corporate and convention travel.

Investors are showing increased interest in stabilized urban properties and repositioning opportunities in high-traffic leisure corridors. Cost structures remain elevated across the Southeast due to insurance volatility, labor market tightness, and rising property tax assessments, but midscale and upper-midscale assets continue to attract institutional capital.

Miami: Luxury normalization and capital targeting

Miami recorded the highest occupancy among all top 25 U.S. markets in January 2025, reaching 83.2%, according to STR.^[2] While ADRs in the luxury segment remained high, several coastal properties saw year-over-year occupancy softness, signaling a normalization of pandemic-era rate surges.

CBRE projects RevPAR in Miami to increase 0.8% this year, driven by 0.6% ADR growth and modest occupancy recovery in H2 2025.^[3] Capital markets remain focused on repositioned resort assets and stabilized midscale inventory across Brickell and Coral Gables, where short-term rental competition has added pressure on ADR ceilings.

Orlando: Group and leisure synergy returns

Orlando led all major U.S. metros in Q1 2025 occupancy growth, up 6.2% to 76.6% according to HVS and CoStar.^[4] Group bookings at the Orange County Convention Center returned to near pre-pandemic levels, while theme park visitation remained stable across Disney, Universal, and SeaWorld properties.

The blend of group and leisure demand has created pricing power across full-service and upper-midscale properties near International Drive. Value-add repositioning strategies remain active in the Universal corridor, where RevPAR compression from new supply has eased and shoulder-season performance has improved.

Tampa: Events and cruise industry recovery

Tampa saw a 17.6% year-over-year increase in occupancy in January 2025, reaching 79.9%, according to STR.^[2] The rebound of cruise activity at the Port of Tampa, along with a strong calendar of events and conventions, fueled gains in both leisure and group segments.

Investors are targeting assets near Water Street and the redeveloped Channel District, where improved walkability and limited new inventory are contributing to strong compression patterns. CBRE notes continued upward ADR pressure across upper-midscale hotels in the Westshore and Ybor submarkets.^[3]

Atlanta: Convention drag and investor caution

Atlanta’s hotel market faced headwinds in Q1 2025, with occupancy declining to 62.8%, down from 65.7% in the same period of 2024. Revenue per available room (RevPAR) dropped 5.2% year-over-year, falling from nearly $90 to $78, while the average daily rate (ADR) dipped by 1% to just over $124 per night.^[1]

The decrease in performance is attributed to a slowdown in both business and convention travel, as well as a broader national trend of declining leisure travel. Inflationary pressures have also impacted consumer spending, contributing to the market’s challenges.

Nashville: Record supply testing investor discipline

Nashville’s hospitality market continues to expand, but a record-setting wave of new hotel supply is challenging operators in 2025. According to STR, Nashville is expected to open 2,849 hotel rooms this year—ranking second in the U.S. behind New York City.^[1] This expansion represents nearly 10% of the city’s existing inventory.

While leisure travel remains strong, recent CBRE data shows RevPAR in Nashville decreased by 3.2% year-over-year in Q1 2025, falling to $106.85, as new inventory pressured ADR and contributed to higher vacancy.^[2] Developers are eyeing long-term growth, but underwriting has become more conservative amid margin compression, with capital targeting branded upper-midscale product near SoBro and Midtown.

Charlotte: Steady growth amid limited new supply

Charlotte’s hospitality market posted stable gains in Q1 2025, with occupancy reaching 68.5%, up 1.3% year-over-year, and ADR increasing 2.9% to $136.87.^[1] The city’s business-friendly climate and growth in financial services employment continue to drive midweek room demand, particularly in Uptown and South End corridors.

According to Lodging Econometrics, Charlotte has one of the smallest hotel construction pipelines among major Southeastern metros, with only 832 rooms under construction as of Q1 2025.^[2] This supply restraint is helping support rate growth and investor interest in stabilized select-service and upper-midscale assets near the convention center and airport submarkets.

Raleigh-Durham: Tech expansion outpacing hotel supply

Raleigh-Durham’s hotel market continues to gain momentum in 2025, with CBRE reporting a 5.7% year-over-year increase in occupancy to 74.3%, and ADR rising 4.1% to $137.22.^[8] The market is benefiting from sustained growth in the tech sector, fueled by companies expanding across RTP, Cary, and downtown Durham.

New deliveries remain limited, and investor interest is growing in stabilized full-service assets located near major universities and regional medical hubs. Raleigh’s strong employer base and event activity are sustaining room demand across both weekday and shoulder-season travel.

Emerging Southeast submarkets to watch

Beyond primary metros like Miami, Orlando, and Atlanta, several second-tier Southeast cities are gaining investor attention in Q1 2025. While Cornovus Capital has not historically been active in these markets, we are closely tracking them as potential expansion points for clients seeking yield, compression-driven repositioning, and limited supply risk.

Jacksonville, FL posted Q1 2025 occupancy of 74.3%, driven by military, healthcare, and logistics demand, according to Newmark’s Jacksonville Nsights Report.^[16] The market also reported an average length of stay exceeding two nights, highlighting its strength in extended-stay product.

Charleston, SC continues to perform above average with consistent occupancy across both leisure and group travel. Its historic appeal, constrained supply pipeline, and steady tourism demand make it a boutique and lifestyle hotel target for both regional and institutional capital.

Raleigh-Durham, NC reported a 5.7% year-over-year occupancy increase to 74.3% in Q1 2025, while ADR rose 4.1% to $137.22.^[17] The region’s tech growth and proximity to major universities have continued to fuel business and academic-driven travel. Stabilized assets near RTP and downtown Durham are drawing increased investor focus.

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