Corporations, leisure travel drive development for Jacksonville, Fla.

According to data from CoStar, year-to-date occupancy at hotels in Jacksonville, Fla., through February was 67.8 percent, while average daily rate was $135.44 and revenue per available room was $91.81. In comparison, year-to-date occupancy through February 2023 was 71.5 percent, ADR was $134.31 and RevPAR was $96.04. 

But these numbers are not a cause for concern at the city’s tourism board. “The numbers are a little deceiving in Jacksonville because we've had so many new property openings that you anticipate a drop [in] occupancy and even the ADR and the RevPAR,” said Michael Corrigan, president & CEO at Visit Jacksonville. In March alone, the city added 300 hotel rooms into the inventory for 700 new rooms year to date, including two Tru by Hilton hotels, an AC Hotel by Marriott and a Home2 Suites by Hilton. “There's going to be a direct effect of opening up that many rooms at one time.”

Jan Freitag, national director for hospitality market analytics at CoStar, called the city “a customer and a developer darling.” Travelers are attracted to drive-friendly destinations with leisure-friendly activities, he added, while developers are eager to invest in a sunbelt market. 

Demand Drivers

Not all of that travel is leisure-focused, however. Several companies have picked up shop and relocated to Northern Florida.

According to JAXUSA Partnership, the private, nonprofit division of the Jacksonville Chamber of Commerce, Jacksonville saw a net growth of 67 percent in corporate relocations from 2022-2023—the highest of any major U.S. city. “That gets you some corporate transient demand,” Freitag said. “And with that comes midweek demand [and] corporate group demand.” Jacksonville also has one of the largest container ports in the United States, Freitag added, which brings in demand from truckers picking up supplies. 

Medical tourism is another key demand driver for the city, with a branch of the Mayo Clinic and the Baptist MD Anderson Cancer Center bringing in both patients and medical professionals. The Mayo Clinic, Concord Hospitality Enterprises and Whitman Peterson are developing a 252-room Hilton hotel on the Jacksonville campus, slated to open in 2025. 

A Growing Pipeline

According to CoStar’s data, Jacksonville and its wider metro area has 47 hotels with 5,083 guestrooms in its pipeline, 1,296 of which are under construction. A number of these are extended-stay hotels, Freitag noted. “In this specific market—where it's probably not unreasonable to assume that some people come here for the winter, for three or four months at a time—an extended-stay type property caters towards that customer type,” he said. “And so then developers are interested in building those, and that’s what we’re seeing in the pipeline.” 

In July, Four Seasons Hotels and Resorts partnered with Shahid Khan through Iguana Investments Florida to develop the Four Seasons Hotel and Private Residences Jacksonville, slated to open in 2026. “Companies like Four Seasons are always trying to expand their footprint,” Freitag said, emphasizing that the state has been “very attractive” to leisure customers. “The developers decided that this market was ripe for a higher-end hotel.” 

“While it's a smaller Four Seasons, it still is a Four Seasons,” Corrigan said. “Any time you’re building a marquee property like that, that gets the attention of other investors to say, ‘Why are they investing here? What do we need to be looking at?’”

This article was originally published in the May edition of Hotel Management magazine. Subscribe here.