Nashville is adding hotel rooms faster than it is filling them
The Metro Tourism and Convention Commission met on November 14 and got a market briefing from CoStar. Three numbers from it are worth writing on the wall above your desk.
Downtown Nashville had the strongest hotel demand growth of any US market coming out of 2023 — up about 36% against 2019. Over the same stretch, downtown hotel supply grew about 45%. And in September of this year, rooms sold in the market were down 2.4% year over year, with average daily rate essentially flat at $215 (Metro Tourism and Convention Commission minutes, November 14, 2024).
There is one more, and it points the other way: January is pacing up about 14%.
What that combination means
Demand up 36%. Supply up 45%. Rooms sold in September slightly negative. Rate flat. January strong.
Put plainly: Nashville is still one of the best demand stories in American travel, and it has been building rooms faster than the demand is arriving. That does not make it a bad market. It makes it a market where rate discipline stops being optional.
When supply grows faster than demand, the marginal room gets discounted first. Hotels discount by quietly opening lower rate classes. Short-term rental owners discount by panic-dropping their nightly rate the week of — the same mistake that hands back a good summer every fall. Same behavior, different button. And every discount you make is a data point that teaches the market what your home is worth.
The owners who get hurt in a market like this are not the ones with the highest rates. They are the ones with no floor.
Why hotel numbers matter to a house in East Nashville
Owners sometimes tell me they do not compete with hotels. On a bachelorette weekend in a five-bedroom, that is true. Most of the rest of the year it is not.
A couple coming in for a Thursday-to-Sunday trip is genuinely choosing between a downtown hotel room and a two-bedroom four miles out. When downtown hotel rates soften, that couple's math changes, and the pressure arrives at your calendar about three weeks later. Hotels are the visible half of the lodging market and they move first because they have revenue managers doing this hourly.
You do not need to match hotel rates. You need to know what they are doing, because it tells you which direction the ceiling is moving.
The Boost part: every home gets a floor
Here is the operating detail for this one. In the weekly pricing loop we run on every home, every home has a rate floor — a per-season, per-home number below which we do not take the booking.
The floor is not a feeling. It is built from what a stay actually costs to deliver: the cleaning that goes to the cleaner, the supplies, the wear on the home, the share of your fixed costs those nights need to carry, and the guest quality that comes with a bargain rate. Below the floor, a booking makes the calendar look better and makes the owner poorer.
Then we hold it. In a soft November week that means we will let two nights go empty rather than sell them at a number that loses money — and we spend that week's effort instead on the January dates that are pacing up 14%, which is an unusual thing to be able to say about a month that is normally Nashville's structural trough. The same twenty minutes of work is worth five times as much there.
The floor moves with the season, not with panic. It goes up for New Year's, CMA Fest, and big football weekends. It comes down for late January and the dead middle of February. It gets reviewed on the same weekly cadence as everything else we do.
An owner without a floor discounts on the third quiet day. That is how a good year becomes an average one.
What to do with the January number
The most actionable thing in the whole briefing is the January pacing figure. Strong January pace means demand is arriving for dates that are still mostly unsold — which means the rates you set for January in the next two weeks matter more than anything you do to December.
If you are self-managing, spend your December energy there. Check your January rates against your comp set. Make sure your minimum stays are not blocking the two-night mid-January trips that make up a lot of that pace. And decide your floor now, in a calm moment, rather than on January 8 when the calendar looks thin and you are tempted.
If you want a second set of eyes on your rates before the new year, get a revenue estimate from Boost Rentals. I will show you your comp set, where your rates sit inside it, and what I would set your floor at. That part costs nothing and it is useful whether or not you ever hire me.
— Chris Hetzner, Boost Rentals