Dallas, Texas, is one of the most dynamic and resilient
hospitality markets in the country. Dallas-Fort Worth continues to benefit from
strong population growth, corporate relocations, major sporting events, and one
of the most diversified economies in the United States.
Top Three Takeaways:
·
Dallas remains a top hotel market, driven by
economic growth, corporate investment, and population gains.
·
Hotel performance is temporarily constrained by
convention center redevelopment and new supply.
·
The 2026 FIFA World Cup is expected to
significantly boost hotel demand and market performance.
The market is home to numerous Fortune 500 companies and
major employers, including AT&T, Southwest Airlines, Texas Instruments,
CBRE, and Baylor Scott & White Health, while also serving as a major
transportation and logistics hub anchored by DFW International Airport and
Dallas Love Field.
In addition, Dallas continues to see significant growth in
entertainment, mixed-use development, healthcare, and higher education, helping
drive consistent business, group, and leisure demand throughout the Metroplex.
Some major additions to the market include:
-
Company expansions: Wells Fargo completed
a new $570-million regional hub in 2025; Goldman Sachs is building a new
800,000-square-foot facility, which will house over 5,000 employees and be
completed in 2028; and Scotiabank announced an expansion, which will create
over 1,000 new jobs.
- Company relocations: Koya Medical Inc. is relocating from Oakland; KFC is moving its headquarters from Louisville; and Care.com is relocating from Austin.
-
Mixed-Use Developments: The Central is a
$2.5 billion mixed-use development on 4-million-square foot mixed-use
development on 27 acres; Clark Hill Towers is a $370 million planned
redevelopment of the former KERA headquarters, which is expected to include
office, condos, hotels, and restaurants; and Sloan Corners development includes
500 acres, which will be developed in stages, beginning with multi-family
Year-to-Date Trends: While Dallas maintains strong
long-term fundamentals, hotel performance has faced some short-term pressure
over the past year. Through April, RevPAR declined 1.3% over the trailing 12
months, with occupancy decreasing 0.9% to 64.4%, while ADR increased modestly
by 0.4%.
The downturn in performance has primarily been attributed to
displaced transient and group demand related to the ongoing redevelopment and
operational transition of the Kay Bailey Hutchison Convention Center (KBHCC), as well as the continued absorption of new supply throughout the
market. The KBHCC expansion and redevelopment is expected to be completed in
April 2029.
The displacement of demand has largely been driven by phased
closures at the convention center, which have limited the city's ability to host
larger citywide conventions and trade shows. Through August 2026, the KBHCC is
serving as FIFA's International Broadcast Center and security hub ahead of the
2026 FIFA World Cup.
However, the long-term outlook for Dallas remains
exceptionally strong, with the market expected to be one of the biggest
beneficiaries of the World Cup. Dallas will host nine matches — more than any
other host city — which is expected to create significant compression and
elevated hotel demand throughout the summer of 2026. In addition, FIFA
operations are expected to bring thousands of media personnel and staff members
to the market for an extended stay.
New Supply: Development activity remains robust
throughout the Metroplex, with Dallas ranking among the top U.S. hotel markets
for rooms under construction. More than 4,300 rooms are currently underway,
with thousands more in final planning and proposed stages. The Dallas
CBD/Market Center, Irving, McKinney, Lewisville, and southern Dallas submarkets
continue to see the highest concentration of development activity. Despite the
continued pipeline, investor confidence in the market remains high due to
long-term population growth, corporate expansion, and Dallas's position as a
premier business and entertainment destination.
Transactions: Transaction activity has remained
active in Dallas, particularly among higher-end branded assets. While
investment activity over the past several years has largely been driven by
midscale and upper-midscale hotels, investor appetite has increasingly shifted
toward upscale and upper-upscale assets. Industry participants expect
transaction volume to continue accelerating into late 2026 as capital markets
stabilize and operational performance strengthens following the World Cup.
