While Downtown occupancy in the year-to-date 2023 period remains 5–10% below the 2019 level, the robust convention and citywide event calendar has kept rates high and increased the market rate ceiling. This trend is anticipated to continue given the new higher-rated supply. Market ADR surpassed 2019 levels in 2022, aiding the recovery of RevPAR. According to our research, the Downtown Indianapolis market is achieving RevPAR only 5–10% below the pre-pandemic levels, a positive sign given the delayed return of corporate demand.

Convention Center Expansion and New Hotel Supply

The Indiana Convention Center (ICC) started its seventh expansion this summer. The project will add the largest ballroom in the state, spanning 50,000 square feet, and multiple meeting and event rooms that will allow Indianapolis to host two citywide conventions at once. An adjacent 800-room Signia by Hilton is also underway and is expected to be connected to the ICC through a skybridge. These developments are projected to create nearly 2,900 jobs and attract $232 million in new conventions following completion in mid-year 2026.

Furthermore, the greater Indianapolis market is anticipating the addition of approximately 1,300 new guestrooms over the next three years. The InterContinental Hotel and Aloft by Marriott are expected to open in Q1 of 2024, while an avid and an ECHO Suites are planned for Q4 of 2024. These new hotels, the convention center expansion, and the adjacent Signia by Hilton will allow Indianapolis to expand its convention calendar and dip into new business that previously exceeded the market’s capacity limits.

Robust Event Pipeline

Indianapolis, known as the “Amateur Sports Capital of the World,” has the infrastructure and facilities to hold a wide range of world-class sporting events. Indianapolis is planned to have a robust 2024, hosting events such as the NBA All-Star Game, U.S. Olympic Team Trials – Swimming, the men’s first- and second-round NCAA March Madness basketball tournament, the iconic Indianapolis 500 (Indy 500), and the popular Eras Tour by Taylor Swift.

The Indy 500 race is considered the largest one-day sporting event in the world. It draws nearly 300,000 spectators on the Sunday of Memorial Day weekend, creating peak occupancy and ADR levels in Indianapolis. Since the downturn caused by the COVID-19 pandemic, the Indy 500 has made a strong return, with attendance only expected to increase in future years.

Taylor Swift's Eras Tour, which has had a multibillion-dollar economic impact nationwide, will make its way to Indianapolis in November 2024. The three concert days will drive momentous demand for hotel rooms, creating a surge during an otherwise slow month. The three concerts are expected to attract a combined attendance of more than 165,000 to Lucas Oil Stadium. Thus, Indianapolis can expect an increase in RevPAR from the Eras Tour. For more information, check out this recent article about the national economic impact of the Eras Tour by Anthony Davis with HVS Convention, Sports & Entertainment Facilities.

Looking Forward

The city of Indianapolis is expected to enter 2024 with strong momentum given the scheduled events, ongoing developments, and planned new supply. The recovery and growth of convention demand will be a key component of long-term occupancy recovery. Occupancy is expected to take several years to recover given the entrance of new supply and delayed recovery of the corporate sector. Conversely, the anticipated new high-rated supply should continue to bolster rate growth, pushing RevPAR beyond pre-pandemic levels in the near term.

For more information or to inquire about a specific hotel project, contact Amy Schmidt and/or Trey Osadchey with our Chicago team.

Sources: HVS Research, Indiana Convention Center & Lucas Oil Stadium.

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