Memphis, Tennessee, is a culturally rich and economically
diverse hospitality market known for its deep musical heritage, world-famous
cuisine, and pivotal role in global logistics. As the birthplace of blues,
soul, and rock 'n' roll, Memphis continues to draw millions of leisure visitors
each year, while its strong business foundation, anchored by transportation,
warehousing, healthcare, and corporate operations, creates a steady flow of
commercial travel. The city's appeal is amplified by its authentic character,
riverfront setting, and iconic attractions such as Beale Street, Graceland, Sun
Studio, and the National Civil Rights Museum. With growing tourism activity and
a resilient industrial base, Memphis remains one of the Southeast's most unique
and enduring destinations.
As a major metropolitan center, Memphis benefits from its
strategic location along the Mississippi River, robust interstate connectivity,
and the presence of Memphis International Airport, home to one of the world's
busiest cargo operations. This global reach fuels a broad, diversified economy
in which logistics, healthcare, education and professional services play
significant roles. The region's steady population base, major institutions such
as St. Jude Children's Research Hospital and the University of Memphis, and a strong
employment pipeline support continued economic expansion.
The market is experiencing significant development in the
manufacturing sector; however, it has also faced some setbacks.
Manufacturing
- Ford +
SK Innovation - Blue Oval City: $5.6 billion investment to build a
3,600-acre EV manufacturing campus at the Memphis Regional Megasite,
creating nearly 6,000 jobs. The assembly plant is scheduled to begin
customer deliveries of next-generation electric trucks in 2026; however, battery
production will not begin until 2027.
- In May
2025, Hyosung HICO announced $51 million investment to expand and enhance
its 360,000-SF transformer manufacturing facility, adding 120+ new jobs.
- AAON announced
a $238 million investment and purchase of a 787,000-SF Southeast Memphis
facility, projected to create 828 skilled jobs over five years; the company
is seeking a 15-year EDGE tax reduction with an expected $29 million in
tax revenue.
- In
July 2025, Silver Hills Bakery made a $48.5 million investment to acquire
the former Kellogg manufacturing plant, adding nearly 400 new jobs to the
region.
- Beale
Street, Graceland, National Civil Rights Museum: Anchor attractions
drawing millions of visitors annually and helping generate $4.3 billion in
tourism spending in 2024.
- The
Memphis Sports & Events Center, FedExForum, and Simmons Bank Liberty
Stadium also host sports events, concerts and tournaments that draw in
demand throughout the year.
- Renasant Convention Center: Recently completed a $200 million modernization, featuring a 118,000-SF column-free exhibit hall and significantly enhancing Memphis' ability to attract conventions and trade shows.
- The
City of Memphis purchased the Sheraton Memphis Downtown Hotel in November
2025 with plans to renovate it to support the convention center.
Technology/Artificial Intelligence
- xAI's Colossus supercomputer expansion includes more than 100,000 Nvidia H100 GPUs installed; plans for 1 million GPUs, marking the region's most significant capital investment ever. Approximately 320 permanent jobs in phase one; thousands more expected as the ecosystem grows. Supports high-intensity computational work for SpaceX, Neuralink, and other advanced projects.
- Other tech arrivals include Nvidia, Dell, and Supermicro, collectively bringing nearly 1,000 new jobs to the region.
- In October 2025, Georgia-Pacific announced the closure of the Memphis Cellulose Mill and Tech & Innovation Center. Approximately 152 jobs lost, highlighting sector volatility.
Logistics
Memphis
remains one of the nation's premier logistics hubs, anchored by FedEx
headquarters and a strong transportation network; however, in October 2025, 611
workers were cut across two distribution centers due to Cummins shifting
aftermarket operations to Indianapolis.
Year-to-Date Trends:
According to CoStar, the Memphis market has experienced a
significant decline in RevPAR; as of October, RevPAR has decreased by 8.7%,
primarily due to a drop in occupancy. The increase in supply, coupled with U.S.
economic uncertainty, has negatively impacted the market. Additionally, some
companies have cut jobs and relocated, causing some uncertainty in the market.
New Supply:
Over the past 12 months, approximately 640 rooms have opened,
and another approximately 890 rooms are currently under construction,
accounting for 3.3% of the market's inventory. With another 32.4% of new supply
in various planning stages, new supply is expected to outpace demand in the
near term. Supply growth in the Memphis Airport/South submarket is elevated,
with 6.8% of existing inventory currently under construction.
Transactions:
In the past 12 months (ending in October), 20 hotels
traded in Memphis, totaling $142 million in transaction volume, up from the
annual three-year sales volume average of $80.9 million. The most significant
transaction noted is the previously mentioned sale of the 600-room Sheraton
Memphis Downtown Hotel for $22 million, or roughly $37,000 per key. This City
reportedly wanted to save this hotel from further deterioration and renovate it
to once again make it a strong convention center hotel for the City.
Despite near-term challenges—including slowing RevPAR,
elevated new supply, and pockets of job loss—Memphis remains a market defined
by long-term opportunity, anchored by its cultural draw, strategic logistics
role, and expanding industrial and technology base. Significant investments
across manufacturing, tourism infrastructure, and emerging AI-driven industries
signal confidence in the city's future and position Memphis for renewed growth
once broader economic headwinds stabilize. While the hospitality sector will
likely continue to face pressure as supply outpaces demand, the city's diverse
economic drivers, continued public and private investment, and strong
institutional presence provide a resilient foundation. As Memphis navigates
this period of transition, it is well-positioned to capitalize on its unique
strengths and reassert itself as a dynamic, competitive destination for
travelers, businesses, and investors alike.
