A Market in Transition: The Future of Downtown Dallas Hotels

In Brief: Downtown Dallas hotels are browsing convention-center interruption, business movings, and sports location shifts, with FIFA improving 2026 rates. While tenancy might stay soft up until the revamped convention center resumes in 2030, aspects such as Uptown advancement, raised hotel/residence tasks, airport financial investments, and significant tasks support a strong longer-term outlook.

By Kathleen D. Donahue – Senior Managing Director, Practice Leader – West South Central Region

The Dallas hotel market has actually been browsing a duration of shift because 2025, driven by shifts in group, leisure, and business need sources. The phased, $3.8-billion redevelopment of the Kay Bailey Hutchison Convention Center Dallas (KBHCCD) started interfering with the citywide conference and convention sector that year. The marketplace is likewise experiencing significant business and sports movings far from Downtown Dallas and continued development in Uptown. In 2026, nevertheless, FIFA-related need assisted balance out a few of these difficulties.

These modifications are producing near-term headwinds, however they likewise frame the marketplace’s longer-term development story. Hotel need will eventually reorient around the broadened convention center, brand-new mixed-use advancement, airport financial investment, and a moving business and home entertainment landscape.

The Path Back from Pandemic-Era Losses

For this post, we examined a CoStar set of 65 hotels (roughly 18,100 spaces) of the high end tier and above, situated throughout Downtown Dallas submarkets such as the CBD, Uptown, Market Center, and Love Field. Tenancy for this set of hotels signed up in the high 60s from 2014 through 2019, settled in the mid-60s after the pandemic, and decreased decently to the low 60s in 2025.

Newest Occupancy Data for Greater Downtown Dallas (Upscale Tier and Above) Show Declines

Source: CoStar

In 2025, the lowered operations of the KBHCCD as the restoration and growth started led to less citywide occasions, hence decreasing the compression usually produced by significant conventions and resulting in softer tenancy outcomes. Compared to the Dallas market as an entire, this set of hotels, that includes 3 1,000-plus-room convention hotels, withstood the impact of the decrease of group space need, as Downtown hotels rely greatly on the convention center for weekday tenancy.

In spite of some month-to-month contractions, ADR stayed favorable total in 2025. DFW was a significant host for the 2026 FIFA World Cupwith 9 matches, consisting of a semi-final, held at AT&T Stadium in Arlington; KBHCCD acted as an International Broadcast Center for the occasion. ADR disintegration took place in the very first 4 months of 2026, followed by stability in May, before substantial boosts were taped in June and July(roughly 25%every month)as an outcome of vibrant rates associated to the World Cup, especially around each match day. The ADR rise throughout June and July will add to a favorable year-end ADR efficiency for 2026 within this set of hotels.

RevPAR Growth Became Positive in 2026, Influenced by FIFA

Source: CoStar

Looking Ahead: Through 2030 and Beyond

With KBHCCD not arranged to totally resume till 2030, the marketplace is experiencing a transitional duration as hotels look for alternative sources of group service to balance out the interruption. Tenancy is anticipated to understand sluggish development in the next numerous years offered the awaited shortage of big citywide occasions through 2030. Following the 2030 launching of the brand-new KBHCCD, we anticipate tenancy for this subset of hotels in Downtown Dallas to reinforce to the mid-to-high 60s in 2031. Moving forward, location hotels need to likewise continue to take advantage of big, one-time occasions, such as the 2026 Republican Midterm Convention kept in September 2026.

Making of the Expanded KBHCCD

Released with Permission from Visit Dallas

In the workplace sector, which fuels the industrial need section, AT&T and Fifth Third Bancorp are anticipated to move their head office operations out of the city’s core by the end of 2028. The recurring job in workplace towers within the CBD has actually triggered conversions of these towers to hotels, apartment or condos, or blended usages. Comerica Bank Tower is prepared to be changed mainly into domestic and hotel area, getting rid of over half of the workplace. Bank of America Plaza has actually been slated to be reconfigured into a contemporary mixed-use center with numerous workplace floorings transformed into a high-end hotel.

Brand-new business advancement is focused within Uptown. Goldman Sachs is constructing a$500-million school in the Victory Park/North End location of Dallas, arranged to open in 2028. Morgan Stanley chosen Dallas for a significant brand-new U.S. functional center, which will consist of an approximated$1.33-billion high-rise advancement at 2401 McKinney Avenue in Uptown. Dallas’quickly growing monetary center, called “Y’ all Street,” is anchored by the launch of the Texas Stock Exchange (TXSE) in July 2026.

Within the leisure segment, American Airlines Center will host the Dallas Wings starting in 2027, and the AA Center has long been a contributor of room nights during sports events, concerts, and other special events. However, the future of the facility is uncertain given the planned departures of the Dallas Mavericks and Stars to new, separate arenas in the city. Both teams plan to leave the 25-year-old AA Center in the coming years following the construction of new arenas elsewhere in the city. Moreover, the historic Neiman Marcus flagship store in Downtown Dallas closed permanently at the end of September 2026. Nonetheless, leisure demand remains strong, particularly in the lifestyle-focused enclaves of the Arts District, Uptown, and Turtle Creek. Supporting future growth is the Klyde Warren Park expansion, which will extend the park nearly two acres to the west, covering the final recessed portion of the Woodall Rodgers Freeway.

Hotel Projects Reshaping the Uptown and Downtown Hotel Landscape

In addition to attracting corporate tenants, Uptown has drawn multiple new luxury hotel/residential projects. Key projects are shown in the interactive map below.

In the Downtown submarket, a noteworthy project is the new $800-million, 30-story convention hotel with about 1,000 rooms near the Kay Bailey Hutchison Convention Center proposed by developer Ray Washburne. Furthermore, Therme Group, an Austria-based wellness company, has proposed an $850-million spa and waterpark wellness resort on 24 acres along the Trinity River near Downtown Dallas; the resort would be the company’s first U.S. location, with a target opening by 2031.

Foundations for Future Growth

The greater Downtown Dallas hotel market is in a transition period, prompted by KBHCC’s $3.8-billion overhaul and modernization, as well as corporate and sports migration from the downtown market. Moreover, new development is largely centered in Uptown, including “Y’all Street” with the national securities exchange based in Dallas. Along with the inherent upside with the renovated and expanded convention center opening in 2030, several factors support an optimistic long-term outlook for the Dallas hotel market as a whole, including DFW Airport’s massive, $9-billion DFW Forward expansion and Dallas Love Field’s $2.5-billion transformation known as the Love Field Expansion Airport Program (LEAP). While the market may face near-term volatility, Downtown Dallas is positioned to emerge from this period of transformation as a more diversified and resilient lodging market.

When you partner with HVS, you gain access to the most current data, unlocking the nuances of local dynamics and empowering you to make confident, strategic decisions. Connect with Kathleen Donahue, your North Texas expert, to evaluate market potential, refine your development strategy, and position your investment for success as Dallas regains its status as a premier destination in the United States. And to stay ahead of the evolving dynamics of any major market on a quarterly basis, consider HVS MarketCast as a valuable forecasting tool. This tailored, five-year forecast provides annual projections for occupancy, ADR, and RevPAR and is designed to equip teams with the market-specific data and forward-looking insights needed to support planning, optimize performance, and maximize profitability in major markets like Dallas.

Source: View the original article at HVS