South Carolina Hospitality Industry Shows Remarkable Growth

News Summary

The hospitality industry in South Carolina has experienced significant growth in the early part of 2023 despite a decrease in available hotel rooms. Key urban areas, including Columbia and Charleston, have seen notable increases in occupancy rates and revenue per available room (RevPAR). Factors like a resurgence in corporate travel and ongoing projects are driving this upward trend. While challenges remain, the outlook for South Carolina’s tourism sector appears promising as stakeholders adapt to evolving market conditions.

South Carolina – The hospitality industry in South Carolina has shown remarkable growth in the first quarter of 2023, even as the number of available hotel rooms has decreased. A report from Colliers South Carolina indicates that the sector has outperformed its performance in the same timeframe last year, highlighting a positive trend amidst various market challenges.

The overall occupancy rate for the state during the first quarter of 2023 was recorded at 66.5%, with significant increases noted in key urban areas like Columbia and Charleston. Additionally, revenue generated per available room, known as RevPAR, has also increased, reflecting a recovery in sectors of travel that had been impacted during earlier periods. Specifically, RevPAR statewide reached $85.54, while the average daily rate (ADR) per room stood at $128.57.

South Carolina’s hospitality property owners and investors are currently navigating a challenging market influenced by a tightened lending environment. This has resulted in adjustments in underwriting practices from buyers and a decrease in transaction volumes among sellers. Despite these challenges, hotel performance is benefitting from a resurgence in corporate travel, team-building meetings, and an increase in group travel, which are contributing to optimistic projections for the industry.

In substantial urban areas, occupancy and revenue metrics demonstrate significant upward trends. For instance, the city of Columbia has seen its occupancy rate rise to 70.1%, up from 66.1% in the first quarter of 2022. Columbia’s RevPAR was $79.54, with an ADR of $113.53. A notable factor in Columbia’s economic growth is the ongoing “Carolina Crossroads” project, which has created a demand for temporary housing, positively impacting midscale hotels in the city.

In the Greenville-Spartanburg area, there has also been a rebound in business travel, resulting in a stable occupancy rate of 71.5%. The RevPAR for this region has increased to $81.83, while the average daily rate is $114.53. This growth signals a recovery trend spurred by business activities picking up in the area.

Charleston has emerged as a standout performer, with metrics that not only exceed those from Q1 2022 but also show improvement from Q4 2022. The area recorded a RevPAR of $139.24, an ADR of $176.50, and an occupancy rate of 78.9%. This robust performance underscores Charleston’s position as a key player in the state’s hospitality market.

Recent sales within South Carolina’s hospitality sector reflect ongoing investor interest. Notable transactions include the sale of a 123-room Courtyard in Charleston for $8.3 million, a 110-room Hampton by Hilton in Columbia for $7.5 million, and a Red Roof Inn in Greenville for $4.1 million. While analysts expect Charleston’s market to maintain strength in the near term, there are indications that it may plateau during the spring and summer months.

As South Carolina’s hospitality industry continues to evolve, stakeholders remain focused on navigating challenges while leveraging opportunities. With a mixture of robust travel activity and strategic developments underway, the outlook for the state’s tourism sector appears promising for the remainder of 2023.

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