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Hotel construction boom drives Detroit’s push to attract major events

Posted By: The Detroit News on March 26, 2025.  For more information, please click here to read the source article.

When the AC Hotel Detroit opened in January along Woodward Avenue, its first guests included fans in town for a Lions playoff game.

The 10-story hotel, built from the ground up, sits next door to the Bonstelle Theatre, currently under renovation. The 154-room lodging features a contemporary glass-enclosed lobby bar called the Conservatory, which is adjoined to the theater. The hotel also sports a rooftop venue, which will offer guests views of the city when it opens in the spring.

“I think the AC is doing what we expected it to do at this stage,” said David Di Rita, principal of the Roxbury Group, a partner in the development. “It’s definitely finding its place in the marketplace.”

The AC Hotel Detroit, under Marriott’s global brand, is another piece of Detroit’s steadily growing pipeline of hotels in and surrounding downtown. It’s a welcome addition in the local tourism industry’s push to attract more large-scale events and burnish the city’s story of revival and resilience.

The tourism industry is hopeful that the influx of new hotel rooms will position the city to attract more major events, such as the upcoming 2027 NCAA Men’s Basketball Final Four.

In addition to the AC Hotel Detroit in Brush Park just north of Little Caesars Area, construction is well underway for a 600-room JW Marriott next to Huntington Place. An EDITION Hotel is also on the way for Hudson’s Detroit, and Olympia Development and Related Companies are in pre-development for two hotels, one next to Little Caesars Arena and the other above the Fox Theatre.

And Ford Motor Co. Executive Chairman Bill Ford has mentioned plans to bring a hotel to the top floors of the renovated Michigan Central Station, which was rezoned last year amid a series of grand opening events.

“We’ve already seen a slight turning point in that we’ve got the JW Marriott under construction, and I think that’s going to be significant,” said Claude Molinari, CEO of Visit Detroit. “I think when the other hotels that are under construction come online, when Olympia Development and Related Companies build the hotel attached to Little Caesars Arena, that will make a huge difference.”

As one of the city’s newest hotels, officials at AC Hotel Detroit are aiming to boost both business and recreational travel, extending beyond large-scale events. About a month after opening, the hotel was tracking between 30-50% occupancy, which was expected, said Kirk Harrison, general manager.

Molinari said that while having the 1,000 hotel rooms currently under construction helps, the city still needs at least 2,000 more rooms to be competitive. He says the city’s saturation point is likely between 10,000 and 12,000 rooms. There are about 6,000 hotel rooms in the city’s downtown and surrounding neighborhoods.

“As soon as the statement becomes ‘We can bus your people to the hotel,’ that is an immediate turnoff,” Molinari said. “People want to be able to walk or take the People Mover to the venues, either the convention center, the stadiums or the arenas. And if they can’t, it’s like a strike against our ability to book these pieces of business.”

In recent years, following the COVID-19 pandemic, Detroit has seen growth in its hotel offerings. New lodgings include the 158-room Cambria Hotel Detroit Downtown, which opened in 2023, and the ROOST Apartment Hotel in the restored Book Tower, offering 117 studio, one-, and two-bedroom units. The 227-room Godfrey Hotel also opened in Corktown in 2023.

Upward trends

Detroit’s hotel industry has seen steady growth in recent years, with its occupancy rates and average daily room rates rising.

Occupancy rates for hotels in Detroit’s central business district rose from 52.5% in 2023 to 57.2% in 2024, according to CoStar. The average room rate climbed from $222.68 to $225.40.

“That is probably a function of more group and corporate transient travelers coming back to Detroit,” said Jan Freitag, senior vice president of lodging insights for STR and national director of hospitality analytics for CoStar Group.

Freitag said that while adding hotel rooms could initially decrease the occupancy rate, hotel developers likely have their sights on an overall increase in demand down the road.

“Out of the gate, if demand stays the same and you increase the number of rooms, that has to mean that the occupancy comes down,” he said. “But the point of the development is, of course, that no, no, no, demand is not going to stay the same, right? We’re going to have more groups and more transient demand. So everybody should win.”

Freitag said he couldn’t assess whether additional hotel development is a good or bad idea, but he said that developers make such decisions after conducting extensive financial analyses.

“If a developer decides to build a hotel, they have done a lot of math … to come up with the feasibility of any project,” he said.

“Hotels want a base rate, like business travel,” he said. “Once you have that base, everything else becomes all your transient people coming to go to (Little Caesars Arena) or whatever it is. So right now we’re doing fine on our general recreational travelers, but we need to build up that base. That takes time. So we’re just starting to feel that going into the late summer, fall.”

One afternoon, Harrison showed off some of the hotel rooms with views of downtown and Midtown, mostly featuring king beds and a streamlined design suited for business travel.

“It’s really clean,” he said. “As you can see, the desk turns into a sitting space, turns out where you put your bag, too. So it’s embracing the idea that one thing can be used for multiple purposes.”

‘A viable destination’

In 2024, sporting events brought in $195.6 million related to direct visitor spending and raised more than $1.5 million to support community programs in southeast Michigan, according to the Detroit Sports Commission, a division of Visit Detroit.

Most notably, the 2024 NFL Draft last April attracted a record-setting 775,000 people to downtown Detroit. Officials reported the event contributed $161.3 million to the local economy. About 45,000 hotel rooms were available for visitors within a 50-mile radius.

Beyond its hotel offerings, Detroit has a lot of things going for it, said Marty Dobek, CEO of the Detroit Sports Commission. Detroit has advantages that sports organizers look for, including walkability, convenient transportation options like the QLine and People Mover, and easy access to the airport. He said venues including Ford Field, Huntington Place and Little Caesars Arena are viewed as top-tier facilities.

“The NFL Draft has really elevated our stature and has really made a ton of momentum for the destination that we’re looking to capitalize off of on the Sports Commission side of things,” he said. “The hotel piece of it all and then the future development — it just feeds into it overall and is going to continue to make Detroit a viable destination that organizers want to host their events in.”

A public-private partnership between the Detroit Regional Convention Facility Authority, which operates Huntington Place, and the Detroit-based Sterling Group has led to the development of the 600-room JW Marriott hotel next to the convention center. Molinari also chairs the Detroit Regional Convention Facility Authority.

Molinari said progress continues on the JW Marriott Hotel, with construction at about the fifth floor. He said there’s a model room inside Huntington Place that the organization can use to promote the hotel to potential clients.

The upcoming arrival of JW Marriott not only helped secure the 2027 NCAA Men’s Basketball Final Four, but also the 2028 U.S. Travel Association’s IPW (International Pow Wow), a premier international inbound travel trade show.

“All indications are is that the hotel will be ready in time for the Final Four in ‘27, which we committed to,” he said. “It’s critical that it’s ready.”

Other developers want to open hotels in Detroit, Molinari said, declining to name those entities: “We’ve had substantive talks with people. So the demand is there. Certainly, the developers are taking notice.”

Other planned projects

At Michigan Central, Bill Ford recently spoke of plans to open a hotel on the top floors of the Station. Last summer, the city rezoned the area from M4 (intensive industrial) to B5 (major business), which would allow for a hotel.

At the time of the rezoning request last spring, a city planning commission report said the plan was to repurpose the train station into a “multi-use hotel, office, and retail space with supportive parking.”

When asked about the hotel and the rezoning, Alyssa Strickland-Knight, spokesperson for Michigan Central, said she had no updates to share, but that they expect to make an announcement this spring.

An EDITION hotel and luxury condos are expected to take up 45 floors of the Hudson’s Detroit skyscraper. Officials with Bedrock have said The Detroit EDITION, a luxury hotel brand that is a part of Marriott International, will be ready in 2027.

Olympia Development and Related Companies are in pre-development for hotels next to Little Caesars Arena and above the Fox Theatre. The Little Caesars Arena hotel will be built from the ground up and feature 290 rooms at 2455 Woodward. The hotel above the Fox Theatre would be an adaptive reuse of office space and offer 177 rooms at 2211 Woodward.

Development of Little Caesars Arena has changed the geography for hospitality in Detroit, Di Rita said. At the beginning of the 21st century, the original hospitality district for Detroit was surrounding Grand Circus Park. That’s where Roxbury Group last year rebranded and expanded the number of guest rooms at its David Whitney Hotel.

With AC Detroit opening and other hotels planned farther up around Woodward, “This was never a hotel district, but it is one in formation,” Di Rita said. He added that Roxbury Group is redeveloping The Plaza apartment building on Woodward into an extended-stay hotel, Apartments by Marriott Bonvoy, over the next six to nine months.

“And all of that was made possible by the growth of the entertainment district,” he said. “And of course, the medical center and Wayne State University. It was a natural next place, and so I expect to see more hotels in this neighborhood.”