CoStar: More hotel options should boost tourism

June 22, 2014

It’s summertime in the nation’s capital, which means you must be prepared to give directions to camera-toting tourists at any time.

D.C. has always been a popular tourist destination because of its rich history, enviable (and free) museums and stately monuments — and 2013 was no different. In fact, the year broke a record for the number of domestic tourists visiting the District at 17.4 million, according to the Destination D.C. tourism bureau.

The recent completion of the 1,175-room Marriott Marquis next to the Walter E. Washington Convention Center should attract even more visitors with its greater capacity to accommodate conventioneers. One of the largest hotels in the region, it features five restaurants, event space and an underground walkway to the convention center.

In another recent headline-grabbing project, the Trump Organization is converting the historical Old Post Office Pavilion into a luxury 271-room hotel, expected to be open in time for the 2017 presidential inaugural parade. Other notable hotel projects include a 200-room hotel in the NoMa neighborhood being built by the JBG Cos., 680 hotel rooms are underway at the massive mixed-use project in Southwest D.C. called the Wharf (delivery in 2017), and 187 rooms at the mixed-use development, City Market at O, opened last month in the East End of the District.

For visitors and local business owners, the boomlet in hotel development will provide more room options across the rate spectrum. Hotel occupancies are hovering slightly below their 25-year average and will likely decrease as new projects come on line, so hotel owners may have to lower room rates to attract patrons.

As hotels continue to pop up, local businesses should find it more affordable to host client conferences or sales team meetings, and tourists should have more options and discounts on their vacations to the nation’s capital. The increased tourist traffic through D.C. and consequent hotel demand could be a boon to the local economy.

Maeve Gallagher is a real estate economist with CoStar Group.

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