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Market Pulse: St. Louis, MO
From Hospitality NET: St. Louis is poised to enter a post-recovery phase of economic development and expansion that should continue to support the recent growth of the region’s hotel market. Numerous proposed developments and business expansions are anticipated to pave the way for continued transient and extended-stay lodging demand growth. Meanwhile, the convention center is operating at new peak capacity. While the growth of hotel supply has begun to accelerate, it remains modest in comparison to most major markets across the country, and is expected to stay in check through the near term. As such, St. Louis is ripe with hotel investment opportunities, provided that buyers and developers exercise appropriate due diligence and market research to identify assets and locations that will provide fruitful returns.
Demand: Regional Development Accelerating
A flurry of new construction projects was announced throughout the region in 2016, adding to many major projects already underway. These developments, and their location within the region, are highlighted in the following map. We have focused on office, industrial, and institutional projects, as well as sports and entertainment complexes, that are expected to have a direct impact on lodging demand.
Despite the relocation of the St. Louis Rams following the 2015/16 NFL season, leisure demand has remained strong in the region and should continue to expand with significant investments in new leisure demand generators. The most prominent of these is the $380-million renovation of the Gateway Arch and the surrounding grounds. Through the removal of a parking garage and the construction of a pedestrian park over Interstate 44, the Arch grounds will be better integrated with the surrounding CBD when the project is completed in 2017.
A group of investors has pledged $240 million toward efforts to attract a new Major League Soccer (MLS) team to St. Louis. The plan includes the construction of a new $200-million stadium in the Downtown West neighborhood, which is contingent upon a public-private financing structure that has not yet been approved. Additionally, the owners of Union Station, situated directly east of the proposed stadium site, have proposed a $70-million redevelopment to revive the attraction. The owners have already renovated the existing hotel and installed new fire, light, and laser shows; plans include a 200-foot Ferris wheel and 75,000-square-foot aquarium.