Strong comeback for Florida hotels

The U.S. hotel sector has weathered two major crises during the past 20 years: the Global Financial Crisis (GFC) of 2008 and the COVID-19 pandemic. Each event challenged the industry’s resilience but also offered insights into its adaptability and long-term value. A quick analysis of the sector reveals dramatic reactions to economic events, an ability to recover over time, a weak link to inflation, and a distinction among markets.

Florida hotel investors might see the market a bit differently than those focused on the national level. The state is home to a disproportionately large number of hotel properties with approximately 10% of the national rooms transacting in any given quarter. Furthermore, hotel pricing in the state performed differently than national pricing over the past 20 years.

A volatile two-decade cycle

Following the GFC, national hotel sales volumes plummeted as financing dried up, and occupancy rates declined as shown in Figure 1. The market recovered throughout the 2010s but never returned to the peak sales volume levels seen before 2008 when REIT privatizations spiked transactions. In early 2020, COVID-19 brought domestic and global travel to a near halt, putting an even greater strain on occupancy. This event triggered another collapse in hotel sales. Note the two plunging sales periods in Figure 2 aligning with these events. Figure 3A shows the dip, and subsequent performance, in international travel associated with the pandemic.

Note: 12-month rolling occupancy. Source: CoStar

Source: MSCI Real Capital Analytics

Source: Department of Commerce – National Travel & Tourism Office (NTTO)

Remarkably, the sector rebounded more quickly than many anticipated. By 2022, national hotel sales volumes returned to pre-pandemic levels and fell into the pattern seen between crises. Thus far in 2025, volume has been relatively small without falling to the lows of 2009 or 2020. The quarterly travel data (Figure 3B) show a slight reversal of the recent growth trend which may be damping year-to-date activity.

Source: Department of Commerce – National Travel & Tourism Office (NTTO)

Despite the swings in sales, inflation-adjusted price per unit (Figure 4) shows a consistent pattern: steep declines during crises followed by full recovery. The price per unit plunged during the GFC and the pandemic and eventually returned to levels comparable before the crisis. This trend underscores the sector’s sensitivity to market shocks and its ability to rebound. Economic shocks may temporarily erode hotel asset values, but long-term investor confidence tends to return. Nationally, the hotel sector continues to recover from major shocks, with inflation-adjusted prices suggesting that real asset values have largely held steady. The adjusted sales prices do not demonstrate much in terms of real value growth but suggest value recovery from significant events.

Note: Prices inflated to 2025 using Consumer Price Index for All Urban Consumers (CPI-U). Source: MSCI Real Capital Analytics

Florida vs. national performance

Florida stands out as a resilient and thriving sub-market within the broader U.S. hotel sector. It is most interesting to view the state’s hospitality performance in comparison to that of the U.S., keeping in mind that the state represents a disproportionately large segment of the national market. The state’s performance is more volatile than the nation’s, which is consistent with it being a smaller portfolio. This elevated volatility is accompanied by generally stronger performance over our time period.

Hotel sales in Florida and nationally have moved in tandem, with peaks and troughs aligning across both crises, indicating that both impacted all investors. The difference lies in pricing. Inflation-adjusted sales prices in Florida have been more volatile than national prices, particularly around the economic shocks (Figure 5). Before both events, Florida prices spiked and then fall sharply — but recovered faster and more dramatically than the national average. Notably, hotel sales in Florida have occurred at higher prices than the national level since the pandemic.

Note: Prices inflated to 2025 using Consumer Price Index for All Urban Consumers (CPI-U)
Source: MSCI Real Capital Analytics

Fundamentals also differ between the markets. Compare occupancy patterns in response to the two critical events, shown in Figure 6. During the best of times, Florida occupancy peaks higher than the U.S. average, but after the GFC it suffered much more deeply and for a longer period. However, Florida’s decline was milder and its rebound has been materially stronger following the pandemic. There are many factors that might lead to these different responses to market shocks such as excessive supply levels when the GFC hit, magnifying the losses. On the other hand, Florida may have been an operating haven during the pandemic, dampening its negative effects. In any event, it is clear that the Florida hospitality market is only loosely tied to that of the nation.

Note: 12-month rolling occupancy. CoStar area defined as “Florida Central South” used as proxy for the state. Source: CoStar

The occupancy gap is not the only factor that changed from the GFC to the pandemic. Relative room rates also shifted dramatically. Prior to 2020, Florida’s average daily rate (ADR) was persistently 15% lower than the U.S. rate. When the pandemic hit, national ADR fell significantly whereas Florida’s ADR held steady. Recovery from this shock was in lockstep, shown in Figure 7, as Florida rates rose alongside the national rates.

Note: ADR=average daily rate. CoStar area defined as “Florida Central South”used as proxy for the state. Source: CoStar

From a room rate perspective, it seems that the pandemic closed the gap between the state and the nation. Florida’s ADR shows much more growth than the U.S. from pre-pandemic to post-pandemic. After both U.S. and Florida ADR hit bottom in February 2021 at roughly $95, the U.S. rate rebounded to 22% and Florida bounced to 36% beyond its June 2019 rate. This brings Florida’s ADR close to the U.S. rate from a much lower pre-pandemic basis. Florida hotel investors who weathered the pandemic dip were more greatly rewarded than investors in other locations.

Supporting Florida’s price growth

Following the COVID-19 pandemic, Florida’s hotel occupancy rebounded more sharply than the nation’s, and its ADR finally closed a longstanding gap. Together, these trends elevated Florida’s hotel revenue to a new high. Figure 8 illustrates the 15-year period when Florida’s hotel revenues lagged behind those of the U.S. due to persistently lower ADRs and a slower recovery after the subprime crisis. It also shows that COVID’s negative impacts were roughly half as severe in Florida and its recovery was faster. Fundamental strengths in Florida’s hospitality market have driven revenue from a sub-U.S. level to parity over the past five years.

RevPar=revenue per available room. CoStar area defined as “Florida Central South”used as proxy for the state. Source: CoStar

When asked whether this performance gap reflected national underperformance before the crisis or Florida’s outperformance afterward, hotel industry veteran Preston Reid emphasized the latter. “Florida is better post-crisis,” said Reid, who is a managing director of Hodges Ward Elliott, a real estate capital markets advisory firm specializing in hotel transactions. “Capital wants to be there because of how the state responded to COVID. Hotels reopened earlier, which drove investor confidence and increased transaction volume. Initially, we saw a pop from leisure demand in 2021–2022, and now corporate travel is rebounding, fueling more deals—especially for conferences. While hotels are volatile, COVID actually gave Florida a transactional edge, and the rest of the country is only just starting to catch up.”

The past two decades have tested the hotel sector’s adaptability and resilience. Nationally, the sector continues to recover from multiple economic shocks, and inflation-adjusted metrics suggest that real asset values remain intact. However, Florida stands out: its hospitality market has not only bounced back but outperformed national benchmarks across nearly all key performance indicators.

For owners and investors, that state’s outlook appears brighter than most. Florida’s lodging sector endured less severe declines in occupancy and room rates during the pandemic. And its quicker and stronger rebound has driven Florida revenue to match U.S. levels, despite a lower starting point. 

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Maegan Ocampo is a graduate of the University of Florida Nathan S. Collier Master of Science in Real Estate program.

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