Since World War II, Detroit has traveled a path from the Arsenal of Democracy and the most prosperous city in the nation, to a city written off by many, to the “comeback” city. A region known for its manufacturing prowess and muscle (both in its workers and its vehicles) is now a place that is home to the largest concentration of engineers in the nation, a top 10 locale for doctorate degrees, a recognized and growing tech hub, and a global center for next-generation electrified vehicles.

This year’s State of the Region report shows that Greater Detroit is a prime example of the kind of resiliency that has become so necessary following the pandemic. Detroiters know what it takes to adapt and bounce back from difficult times, and even as we face a potential slowdown induced by efforts to tap the brakes on the economy and curb inflation, we are well-positioned to overcome any challenges.

In a recent address to the Detroit Economic Club, Citizens CEO Bruce Van Saun spoke about how the combination of leadership, culture, and innovation tied to an intense focus on customer needs has driven Citizens’ success. Similar strengths have helped Detroit rebound yet again and set us up to face the future with confidence. The data supports this view. Overall, the Detroit Region has shown tremendous resilience over the past few years, with the Region outpacing the state and nation in annual Gross Domestic Product (GDP) growth in 2021. In 2022, the Region’s private sector jobs fully recovered to 2019 levels, as unemployment rates dropped to levels last seen in 2000. Wages and salaries rose over 2022, and while inflation is still a major concern for residents, consumer spending remains robust.

The Detroit Region’s office and industrial vacancy rates remain steady despite ongoing shifts in workplace needs. Since 2021, office vacancy rates experienced a slight decrease of 0.3 percentage points and industrial vacancy rates remained at 3.9%. Organizations are opting for smaller office footprints as leases come up for renewal, and subleasing levels have increased from 900,000 square feet prepandemic to 1.8 million square feet in the third quarter of 2022, according to Newmark’s Metro Detroit Office Q3 2022 report.

We have some exciting news to share about the Detroit hotel market. After a strong year in 2021, the market continued to grow in 2022. One of the main drivers of this growth was increasing average rates, with ADR exceeding pre-pandemic levels. Detroit’s tourism industry has shown the greatest recovery following the severe downturn in 2020 and early 2021, which has resulted in strong ADR levels.

According to Visit Detroit, visitation numbers since the second quarter of 2022 have approached the pre-pandemic levels of 2019. This is great news for the city’s tourism industry, which has been hit hard by the pandemic. However, occupancy growth has lagged behind the average for the U.S. and other top 25 markets in the Midwest, such as Indianapolis, Chicago, and St. Louis. This is primarily due to a slower recovery within the commercial segment, as workers have yet to return to offices in full force and international travel remains low.

Despite this, there are several exciting developments in the works that will positively affect the hotel segment in the future. Ford is redeveloping the early-20th-century-built Michigan Central Station in the Corktown neighborhood into its global mobility district. The new facility is expected to host 5,000 workers, which will undoubtedly lead to increased demand for hotels in the area.

Another development that will positively impact the hotel industry in Detroit is the Gordie Howe International Bridge. This second span over the Detroit River connecting Michigan to Windsor, Ontario, Canada is expected to open in 2024, which will increase border-crossing traffic and lead to more hotel stays in the area.

The mixed-use Hudson’s Site tower, which will be the second-tallest building in Detroit when completed, will include a 300-room hotel. This is great news for the hotel industry, as it will add another major hotel to the city’s portfolio.

We are also thrilled to announce that Detroit made the top 10 of Travel Lemming’s best destinations for 2023, one of 20 U.S. locations in the top 50. This is a positive step in growing Detroit’s tourism industry, and we look forward to welcoming even more visitors to our great city.

Finally, a pair of automotive events will return to downtown Detroit next year. The International Auto Show made its post-pandemic debut in 2022, and the show is expected to evolve even further in 2023. Additionally, the Chevrolet Grand Prix in June will hit the streets of downtown Detroit, leaving its previous home on Belle Isle. This event promises to bring lots of foot traffic and excitement downtown, which will undoubtedly lead to increased demand for hotels in the area.

While commercial demand has lagged behind other markets, the future looks bright for the hotel industry in Detroit. With exciting developments in the works and a growing tourism industry, we are optimistic about the future of the Detroit hotel market.