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Research: Nashville lodging demand flat in 2024; short-term rentals gain ground
Summary
Commission research staff presented 2024 lodging metrics showing essentially flat hotel demand, falling RevPAR, an increase in supply and growth in short-term rental revenue; staff forecast modest growth for 2025 driven by conventions and major concerts.
Bruce McGregor, research staff, presented 2024 lodging results for Davidson County and said hotel demand was “essentially flat” last year, with a countywide decrease in demand of 0.3 percent and an average daily rate (ADR) decline of about 2 percent to roughly $201.
McGregor told the commission RevPAR fell about 5 percent because of the rate drop and a 2.7 percent increase in room supply; he said eight new hotels added roughly 1,300 rooms last year. He added that despite those changes, room revenues still exceeded $2 billion in 2024.
A major theme of McGregor’s presentation was the rising role of short-term rentals. He said 12‑month revenue for short-term rentals was up 18.7 percent year over year and accounted for about 23 percent of total lodging revenue in the county. McGregor said data for short-term rentals came from AirDNA and that there are roughly 9,500 active countywide listings, about 1,300 of which are downtown.
On downtown performance, McGregor cited a strong downtown showing: demand up 3.4 percent, supply up about 3.2 percent, occupancy around 75.5 percent and a downtown ADR near $283; downtown hotels produced just over $1 billion in room revenue and represented roughly 52 percent of countywide room revenue while comprising about 33 percent of county supply.
McGregor described a bifurcated market: luxury and upper-upscale hotels performed well (luxury demand up about 2.2 percent), while economy-class hotels showed larger declines. He said higher-income travelers continue to drive the luxury segment while lower-income travel demand has softened amid inflationary pressures.
Looking ahead, McGregor said projections for 2025 show measured growth: domestic visitation roughly in line with U.S. trends at about 2 percent, hotel demand projected to increase about 2 percent to approximately 10.2 million rooms sold countywide, and hotel revenues expected to grow about 2.7 percent. McGregor attributed some upside to conventions at Music City Center, new nonstop international flights and major concerts scheduled for the spring and summer.
Commission members asked about permitting and taxation for short-term rentals; McGregor said the short-term rental listing data come from third-party tracking (AirDNA) and that permitting and enforcement are handled by Metro codes (staff), and that major booking platforms typically require a local permit number for listings.
