The King took a backseat to tourism at Graceland on Friday.

Officials gathered at The Guest House Hotel at Graceland for the 26th annual Metropolitan Memphis Hotel and Lodging Association conference.

"I'm an advocate for tourism... it is an important part of our economic future," Memphis Mayor Paul Young said. "We cannot afford our tourism industry in our city and state to decline."

The event featured different speakers providing an outlook and update on what’s happening within the local, statewide and national hotel and hospitality sectors.

Here are some major takeaways from the event.

The hotel pipeline in Shelby and DeSoto counties

The Memphis lodging market's current pipeline has a total of 8,429 rooms coming from 72 properties in Shelby and DeSoto counties. Chuck Pinkowski, owner of Pinkowski & Company, noted that not all the properties will be built.

Downtown Memphis has the most in the pipeline with 2,435 rooms from 15 properties, while DeSoto County (Southaven, Olive Branch, Horn Lake and Hernando) have a combined 24 properties totaling 2,440 rooms.

“If you take Downtown and DeSoto County, that’s almost 4,900 rooms and it represents 53% of the rooms on this pipeline chart,” Pinkowski said. “I’m not saying that’s where all the growth is going to be, but that’s where a lot of developers are looking to plan when they do development.”

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Downtown Memphis hotel occupancy lagging

While the Downtown Memphis hotel industry has come back strong in several statistical areas, occupancy has remained a challenge compared to pre-pandemic levels. Downtown Memphis’ occupancy registered 60.2% in 2023, a decrease from 69.4% in 2019. The citywide occupancy was 64.7% in 2023. In addition, figures show that Downtown weekday occupancy in 2023 at 57.2% was a big decrease from 66.9% in 2019, while weekend occupancy in 2023 at 67.5% also was a drop from 75.8% in weekend occupancy in 2019.

“Downtown is down nine occupancy points compared to 2019, but remember we had significant increase in supply from 2020 to 2021,” Pinkowski said. “We also were in the midst of the pandemic at that time and the meeting demand Downtown was off as well, so we had a trifecta there of negative factors impacting it."

Record-setting hotel room nights sold in Downtown Memphis

Even with the decline in occupancy rate, Downtown Memphis saw 32,000 more room nights sold last year compared to 2019, Pinkowski said.

In fact, Downtown Memphis sold more room nights in 2023 than ever before, according to Pinkowski. He said a record 896,000 room nights were sold in Downtown in 2023, compared to 864,000 in 2019.

Big cities are back

During a presentation on national and regional trends, Tucker Latture of STR shared a series of data sets and slides highlighting a big return for the top 25 metros, nationally.

The consensus was group and corporate travel has returned, proving to be a big factor for larger cities. Since the pandemic, leisure travel has risen, which benefitted smaller markets such as Memphis, Latture said. In 2023, national trends saw group travel outpacing leisure travel.

Average daily rate (ADR), dominated in the top 25 markets, with notable gains in East Coast cities such as New York City and Washington, D.C. Such cities, also saw a significant uptick in weekday travel in 2023 compared to 2022, signaling a return of corporate travel, he said.

Additionally, those larger metros are also seeing a significantly higher rate of construction and total number of projects within respective pipelines, Latture said. Nashville, specifically, was third in terms of number of hotel projects under construction.

According to the Nashville Convention and Visitors Corp., eight hotels for a total of 1,522 rooms are expected to open throughout the Nashville metro in 2024.

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Independent hotels are losing ground

During Latture’s presentation he highlighted that a historical shift is underway as fewer independent hotels are being built, instead designs are shifting toward the big brands.

In 2010, InterContinental Hotels Group (IHG), Choice Hotels International, Hilton Hotels & Resorts, Hyatt, Marriott, Starwood and Wyndham Hotels brands accounted for 59% of all hotels within the active construction pipeline.

In 2023, those brands accounted for 76% of the active construction pipeline nationally.

Additionally, in 2022, construction on luxury and upscale hotel brands saw an increase, Latture said. Within Memphis, upscale and upper midscale select service dominated the construction pipeline without any luxury hotels in the works, according to the STR and CoStar report. (Upscale and upper midscale hotel rooms remain the largest select service under construction nationally.)

Starwood Capital Group recently announced it was putting the Sheraton Memphis Downtown Hotel, located at 250 N. Main St. up for sale. The 600-room hotel is considered a key property within the Downtown landscape and adjacent to the Renasant Convention Center.

In November 2022, the Hyatt Hotel Group acquired the Dream Hotel brand in a $300 million merger. A 171-room Dream Hotel is currently in the works from developer Tom Intrator in the former Royal Furniture Co. building at 122 S. Main St.

Additionally, Hyatt has staked a claim in Downtown Memphis recently at the One Beale development site. The hotel brand opened its Hyatt Centric in 2021 and in June 2022 opened the world’s first Caption by Hyatt brand next. Carlisle Corp. was planning to build a 359-room Grand Hyatt at the campus before plans for the full-service hotel were nixed in November 2022. In August 2023, Chance Carlisle of Carlisle Corp. said there are still ongoing plans to bring the Grand Hyatt brand to Memphis.

Corey Davis is the Collierville and Germantown reporter with The Commercial Appeal. He can be reached at Corey.Davis@commercialappeal.com or 901-293-1610.

Neil Strebig is a journalist with The Commercial Appeal. He can be reached at neil.strebig@commercialappeal.com, 901-426-0679 or via X: @neilStrebig.

This article originally appeared on Memphis Commercial Appeal: Hotels in Memphis: The latest on occupancy rates, new projects & more