As the largest city with a 600-mile radius, Denver draws attention for its sports scene, its cultural offerings and destination for year-round outdoor activities. But the leisure slowdown seen nationally is affecting Denver right now—and could be throughout 2025.
The Denver hotel market is currently following national trends, with some softening in performance compared to the strong recovery seen over the past couple of years, post-pandemic. Denver is still at peak average daily rate and growing but there is definitely some softening, said Emmy Hise, senior director of hospitality analytics for CoStar.
“We're starting to see a lot more pricing sensitivity,” she said. “But in 2024, top line performance is actually down. And I think that there's a couple contributing factors to that.”
The leisure slowdown seen domestically everywhere in the U.S. is impacting the Denver market as well because weekend performance is down, Hise said. Many visitors fly into Denver heading to the ski resorts but typically stay a night or two in Denver beforehand and/or afterward. That inbound international travel isn’t fully back yet. “We saw that domestic surge but the international travel isn’t there yet,” she continued.
Robert Butler, chief operating officer for Denver-based Sage Hospitality, said the region is still climbing to get back to the occupancy levels of 2018 and 2019 but there is optimism looking ahead. “The market demand is looking way more robust and big chunk of that is just based on the convention business,” he said. “That business really coming back to the convention center, which had undergone a pretty significant renovation the past few years and had kicked out some of the business, will be complete next year. The market is attracting the larger conventions, which had been slow to recover coming out of the pandemic.”
Convention business in Denver has been relatively flat, whereas in other major city markets, the return of group business has helped offset leisure declines. “Because occupancy is flat, I think that's why we're showing a little bit of a decline," Hise continued. "But the group average daily rate is why the rates are growing in Denver, because the rest of the segments are down. So even though it's flat, they are getting higher-rated kinds of conventions and businesses."
Recent developments that have significantly impacted the Denver market stem from accomplishments over the past 10 years, with notable additions like Meow Wolf, McGregor Square and the National Western Center redevelopment, said Richard Scharf, president and CEO of Visit Denver. The growth of the downtown River North district, known as RiNo, has further bolstered Denver's creative landscape, becoming home to a flourishing community of artists and businesses, including architects, galleries, sculptors, designers, furniture makers, illustrators, and photographers.
Additionally, some of the city’s top cultural attractions are showcasing unique exhibits, such as the Wild Things exhibit at the Denver Art Museum; the Spirit Guide Traveling Exhibition at the Denver Botanic Gardens; and Orcas, Power of Poison, Wild Color, and Animals of the Rainforest at the Denver Museum of Nature & Science. Special events, like the Outdoor Festival and the Mile High Holiday Tree, have also helped increase visitor demand, Scharf continued. “Furthermore, the addition of the Michelin Guide to Denver and Colorado two years ago has enhanced the city's culinary reputation, highlighting its innovative food scene,” he said.
Yet another unique factor affecting Denver is the slowdown in hiring at the major airlines with hubs at the Denver airport. This has reduced some of the core business travel demand that hotels in the market have historically relied upon. Denver International Airport is a hub to three major airlines—United, Southwest and Frontier. The recent Boeing strikes have limited airline hiring, which has impacted the United training hub facility based at DIA.
Unique Denver Properties
The 265-room Populus, developed by Urban Villages and managed by Aparium Hotel Group, is what its creators call America's first carbon positive hotel. Designed by Studio Gang, the building's distinctive façade mimics aspen tree patterns, with "lids" over each window providing natural shade. The structure incorporates low-carbon concrete and an insulated façade system, while avoiding on-site parking to reduce its carbon footprint.
Progressive sustainability features include a biodigester that converts all food waste into compost for local farms, and the use of reclaimed materials throughout—from Wyoming snow fencing in the lobby ceiling to carpeting made from recyclable materials that biodegrade in landfills.
The Crawford Hotel in downtown Denver just underwent a major design update to each of its 112 guestrooms and lobby. Originally opened in 1881, the iconic Denver Union Station reopened to great fanfare in July 2014 after a $54 million renovation that included the creation of The Crawford Hotel, named for urban preservationist and Union Station Alliance member Dana Crawford.
The independent hotel is part of the mixed-use Denver Union Station, so its recent renovation was not only for the guestrooms but also to create more of a lobby experience, away from the bustle of the station.
“We took a hotel that was really thriving and upgraded to more of a luxury experience, and then added the services and experiences that guests really look for in a luxury property,” Sage Hospitality's Butler said. “The hotel is now on par with the Four Seasons and the Ritz Carlton's kind of traditional luxury, but with more of a lifestyle and approachable type of luxury experience.”
Denver's Long-Term Growth Prospects
Developers and investors in Denver seem to be enthusiastic about the city's future, with CoStar forecasting topline growth for the city for the next five years. In 2024 (as of press time), Denver had 11 new hotels and more than 1,300 rooms open, although supply change will still be negative due to demolitions or conversions, Hise said. In 2025, nine new hotels with approximately 1,100 rooms are expected to open. “Developers have an interest in Denver,” she continued. “There are nearly 50 hotels and over 7,300 hotel rooms in the final planning phase.”
Looking ahead, the hotel pipeline for the next five years is expected to be modest, with a focus on smaller, limited and select-service properties, said Scharf. Recent hotel openings include the Kimpton Claret Hotel in the Denver Tech Center and the Cambria Hotel Denver Downtown RiNo.
The city is making significant investments in infrastructure, including the ongoing renovation and expansion of the Denver International Airport. There are plans to add more terminals at the airport through 2045, which should continue driving increased visitation. Beyond the airport, Denver is investing in other areas to enhance the visitor experience, such as the renovation of the 16th Street Mall and the expansion of the convention center.
Overall, while Denver is experiencing some short-term softness, Hise believes the market is well-positioned for strong growth in the coming years, driven by the city's continued investments in infrastructure, tourism assets and an engaged development community.
This article was originally published in the January edition of Hotel Management magazine. Subscribe here.