Market Snapshot: Tulsa steps into the spotlight

When it comes to thriving hotel markets, major coastal cities usually steal the spotlight. However, the heartland has its own burgeoning star: Tulsa, Oklahoma. In recent years, Tulsa has defied expectations, emerging as a pivotal hub for both business and leisure travel, driving up key metrics like occupancy, average daily rate, and revenue per available room.

“This is definitely a growing market right now,” remarked Robert Burg, president and CEO of Avion Hospitality. The third-party management company’s Hyatt Regency in Tulsa stands as testament to the city’s potential. “When I think about pre-COVID to where the market is right now, it’s grown leaps and bounds,” Burg said.

Data supports Burg’s assertion. As of June, the most recent data available at press time, Tulsa had seen a 10.4-percent increase in occupancy, according to CoStar. Meanwhile, RevPAR was up 23.7 percent, and ADR grew 12 percent.

As it stands, Tulsa hotel market performance has recovered from COVID quicker than markets on the coast, according to Brent Mertz, director of the Midwest Division at CBRE. “2021 was a very good year for Tulsa as a market. A lot of hotel work I did down there, even at the end of 2020, it was seeing significant recovery trailing 90 days compared to pre-COVID.”

Burg attributes growing demand to new drivers to the market, including Amazon’s new 2.6-million-square-foot facility in the city. The new development has brought upward of 500 jobs to the city, for one. The oil and gas industry is another big demand driver for Tulsa, according to Mertz.

“Tulsa is a medium-sized market with a lot of demand driven by natural resources. When oil prices are up, we see a lot of activity,” he said. “It drives pretty good hotel demand.”

But Tulsa has been put on the map for leisure travel, too. For instance, Burg pointed to several high-profile entertainers—such as Madonna and Luke Bryan—including Tulsa’s BOK Center on their tours. “Tulsa was always secondary to Dallas. Now it’s become an incredible alternative,” Burg said, adding that production companies for movies are also taking note of Tulsa’s cost-effective opportunities to shoot movies.

Not only that, Burg said that since the pandemic people have simply learned how to get in the car to travel again. For Tulsa that means millions of people within a 25-mile radius. “Also you have people investing in the city now,” he added. “The city has become very activated, and it’s generating a lot of demand. It’s a gathering place.” All of those reasons, Burg said, have attributed to the Hyatt Regency enjoying a 22-percent increase in RevPAR.

‘A Market to Watch’

From a development perspective, Mertz said he’s seeing growth happen in the southern suburbs such as Bixby and Jenks. There’s also some new supply going in near the Tulsa International Airport. But there’s isn’t a ton of new supply being added this year.

According to CoStar, one hotel with 82 rooms has opened this year in Tulsa, and two more hotels with 134 rooms are planned for 2023. Meanwhile, 16 hotels with 1,564 rooms are in the pipeline for the market. “Tulsa is a pro-development area. You’re not going to face a lot of hurdles or roadblocks to get development accomplished, assuming there’s an identified need that can be met,” Mertz said.

Burg said that one need look at residential housing price increases as an indicator of the market’s health. “When I look at housing prices, the market is up over 15 percent in sales price for residential real estate. That signifies strong demand for Tulsa,” he said. “Tulsa is definitely a market to watch. We’re enjoying great success.”

Mertz agreed. “Tulsa’s a good hotel market with a lot of good operators,” he said. “It’s a good solid hotel market.” And the city’s thriving hotel market, powered by new drivers of demand and an opportunistic development pipeline, certainly seems to be proving him right.