Hospitality industry fuels Nashville’s growth

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When you spot a tourist downtown or in your neighborhood, remember to smile. Making sure that tourists keep visiting Nashville is key to our city’s continued growth and success.

This year, Travel+Leisure gave Nashville the top ranking as the friendliest city in America, as well asthe best music scene in the country. This type of national recognition follows an influx of tourism that our city has welcomed in recent years. According to the Nashville Convention & Visitors Corp (NCVC), the number of visitors Music City welcomes each year grew to more than 13 million in 2014 with visitor spending projected to exceed $5 billion.

From the standpoint of commercial real estate, Nashville’s popularity as a tourist destination is important because it generates jobs, and employment growth is the No. 1 driver of commercial real estate. According to “The Economic Impact of Travel of Tennessee Counties,” tourism generated 54,790 jobs in 2013 and accounted for $1.15 billion of the paychecks received in Davidson County.

The NCVC also reports that 2014 was the best year on record for the number of hotel rooms sold in Nashville, with an 8.9 percent increase over 2013. In fact, as of May 2015, Nashville has had 54 months of consecutive year-over-year growth in the number of hotel rooms sold — which indicates that our city’s visitor rates are going nowhere but up.

With this positive trend of growing tourism, it’s not a shock that new hotel developments are an important component of the city’s commercial real estate scene. New hotels coming downtown that are either in construction or in final planning stages include a Westin, Tribute Portfolio by Starwood, Utopia, JW Marriott, 21c Museum Hotel and Barkley Lake Inn, which will bring 1,530 rooms to the area. There are a number of additional hotels in surrounding neighborhoods that will also house our visitors, including Thompson Hotel in the Gulch, Kimpton in Midtown, Residence Inn at Opryland and several others — bringing a potential extra 925 rooms to the table.

“This is an exciting time for developers and businesses that can capitalize on the strength of Nashville’s hospitality industry. The growth of our hotel industry here in town is a testament to the allure of the city and the strength of our music brand worldwide,” said Butch Spyridon, president and CEO of the NCVC.

With Nashville garnering international attention as a new “It City,” its popularity drawing more conventions and meetings. Take, for example, the Entrepreneurs’ Organization’s (EO) annual NERVE conference that will be held this year in Nashville. Our local EO Nashville chapter is hosting more than 700 entrepreneurs for a three-day event this September, which will be another large gathering of entrepreneurs in Music City following the 36|86 and Pandoland conferences earlier this month. According to Cvent, Nashville is ranked 10th in the country as a meeting destination for conventions, and three of the top 17 meeting hotels are in Nashville: Renaissance Hotel, Omni Hotel and Gaylord Opryland.

Annual summer events like CMA Music Festival continue to bring visitors and music fans to Nashville. According to the CMA, the four-day music festival had “a record-setting daily attendance of 87,680 fans — best 2014 numbers by 9.6 percent.”

With so many planned summer activities like concerts, festivals, museums and Nashville’s great outdoors, Nashville hotel occupancy is steadily higher in the summer, but we’re also becoming more of a year-round destination. According to the NCVC, the all-time record for hotel rooms sold in one month was broken last October.

As developers and as locals, it’s our responsibility to be mindful of the city’s character, to treat our visitors with charm and show them what Music City is all about. As Nashville continues to grow, it is important to remember that tourism helps fuel this economic growth, providing more opportunities to strengthen local businesses and develop healthy commercial real estate.

Wood S. Caldwell is managing principal of Southeast Venture, a diversified commercial real estate company. He writes about Middle Tennessee real estate deals once a month for The Tennessean. Reach him at wcaldwell@southeastventure.com

By The Tennessean

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