Beyond the List: Signs point to recovery for St. Louis hotels – including higher room rates - St. Louis Business Journal (2025)

The hotel industry in St. Louis is recovering.

The occupancy rate for St. Louis metro area hotels reached 68% in June, its highest since October 2019, according to data from global hospitality data and analytics company STR.

While the rate is still short of 2019 levels, current occupancy shows the industry moving towards the pre-pandemic normal. By comparison, the occupancy rate in June 2019, 76%, is only 8% higher than the 2022 rate.

Across the country, the hotel industry's recovery varies. National hotel occupancy was at 70.1% in June, with New York City posting the highest occupancy rate (83.7%) and Houston and Phoenix posting the lowest, 58.4% and 62.6%, respectively.

“As many businesses continue to offer employees the flexibility of working from home, the return of business travel has lagged nationally, and certainly here in St. Louis,” said Brian Hall, chief marketing officer of Explore St. Louis, the region's tourism agency. “That said, several hotels have reported a strengthening of the business travel segment often led by the resumption of corporate event activity such as training programs, sales meetings and new product launches.”

Hall pointed to the second week of July, when the Beachbody Coach’s Summit at America’s Center and the Dome brought 16,000 attendees to St. Louis. Together with the Cardinals games that week, revenue per available room (or a hotel's average daily room rate multiplied by its occupancy rate) rose above $100, 17.9% higher than the same week in 2019.

But more than occupancy itself, increasing room rates are also driving the industry’s recovery. This jump in rates is due to a few different factors, according to Robert O’Loughlin, chair and CEO of St. Louis-based lodging and hospitality management company Lodging Hospitality Management, which operates nearly 20 hotels in the metro area.

“(The cost of) labor has gone up. Supply chain expenses have gone up. All expenses have gone up,” O’Loughlin said. “A large part of charging more is to offset the expenses that you had to deal with during that two-year period and a period going on for the next several years.”

The average hotel room rate was $127.53 in June 2022, 13% higher than the average rate of $113.19 in June 2019.

"The industry generally views increases in average daily rates and RevPAR as an indication of pricing strength as long as demand isn’t forsaken," Hall said. "Our tourism and lodging assets have consistently improved over the past few years and the increase in hotel revenue is a signal that visitors perceive their St. Louis experiences as more valuable."

Both Hall and O'Loughlin noted that, like every industry, employee shortages are still a challenge. O'Loughlin pointed to increasing pay for employees as a way to bring in talent, and Hall mentioned a joint effort with Explore St. Louis and its tourism partners to market hospitality careers.

"(Employees will eventually) come back to the hospitality industry because they're great entry level jobs for people that are going to high school and college," O'Loughlin said. "And when they get out of school, hospitality, waiters, waitresses and bartenders make a lot of money. I would say probably two years, we'll get back to where it's more normal."

With occupancy on the rise, St. Louis is bullish on the industry.

STR reported that the metro area currently has four hotel properties under construction, 12 in final stages of planning and 10 in earlier development stages, for a total of more than 3,000 new hotel rooms either planned or under construction. Examples include the 21c Museum Hotel St. Louis on Locust St. downtown and the set of hotels at the corner of Market Street. and Jefferson Avenue planned by Midas Enterprises and Green Street Real Estate Ventures.

But even with the industry recovering, O’Loughlin said he'd be hesitant to build any new hotels, at least in the short term.

“Prices are at an all-time high as far as construction goes. And then you have an impending maybe two years of recession,” he said. “I'm very optimistic that our region will come back. I think there's a lot of good things going on in our region — what we did at Union Station is doing extremely well. I think the soccer stadium will do well. The Cardinals and Ballpark Village does really well. But I think I would wait a couple of years before I would build or open another hotel.”

Hall noted that Explore St. Louis was "closely watching for the potential impact of inflation and high gas prices, but we’re not experiencing any slowing that we can point to with certainty."