Luxury hotels move into Nashville as demand for rooms surges

Nashville is seeing an unprecedented surge in luxury hotels, with renowned brands such as the Four Seasons Hotel, the W Hotel and the Grand Hyatt opening their doors in Music City.

More than 90 new hotels have been constructed in Nashville since 2013, contributing more than 14,000 rooms to the city’s accommodation offerings, according to the Nashville Chamber of Commerce. In the past year alone, hotel expansion has generated more than $2 billion in revenue.

“This is a great city and, for the most part, very pro-growth and pro-development,” real estate developer Dean Stratouly told CNBC.

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“That’s something that you don’t find everywhere. You then layer in all the things that are really cool about Nashville: Broadway, music, [the NFL’s Tennessee] Titans. And all of that put together makes Nashville just a great place to come,” he said.

Stratouly is one of the key figures behind a new Four Seasons Luxury Hotel in Nashville. The hotel boasts 235 rooms across a 40-story glass tower, including a 2,200 square foot penthouse suite with a hefty price tag of $10,000 or more per night.

And he’s not alone in moving in.

In 2020, Hyatt opened the Grand Hyatt Nashville, a 591-room hotel situated in a 25-floor tower, with amenities such as a rooftop bar, outdoor pool deck and more than 7,000 square meters of meeting and events space.

In 2021, W Nashville opened in the Gulch neighborhood, with 286 rooms and 60 suites in a 14-story mirrored tower, providing a 360-degree view.

A $585 million Ritz-Carlton project was originally set to break ground in Nashville’s SoBro district in late 2022 but has reportedly faced construction delays due to a developer dispute and a $10 million lawsuit.

While luxury hotels break ground, Nashville is struggling to keep up, according to Stratouly.

As construction of the Four Seasons project progressed and designs were finalized, it became apparent that no local laundry service could accommodate the hotel’s daily load of 3,000 pounds of linens. The solution was to outsource the hotel’s linens to Alabama, requiring a daily round-trip journey of over four hours by truck, Stratouly said.

What’s more, during construction of the hotel, Stratouly said the team faced a serious shortage of skilled labor and building inspectors in Nashville.

“The problem they are having is a product of their success,” he said. “They can’t move concepts through as fast as the market is asking them to push it through.”

City officials acknowledged the ongoing challenge of maintaining sufficient staffing and funding for permit reviews and inspections. Will Dodd, public information officer for the Nashville department of codes and building safety, told CNBC the office is working to secure staff and decrease inspection times.

At the heart of the hotel demand surge is the Music City Center, a 2 million square foot convention center that CEO Charles Starks says has ignited a need for new accommodations.

On the center’s opening day in 2013, there were already 125 large events pre-booked, with attendees reserving more than one million hotel rooms through 2024, Starks said.

“We’re seeing somewhere around about half a billion dollars a year of direct economic impact,” said Starks.

TUNE IN: The “Cities of Success” special featuring Nashville will air on CNBC on Dec. 6 at 10 p.m. ET/PT.