MURFREESBORO, Tenn. — As the hospitality industry rebounds from the travel slump caused by the COVID-19 pandemic, Tennessee has emerged as one of the fastest-growing states for new hotel development, according to a new analysis by Luxury Link. The state saw an 11.6% increase in hotel properties from 2019 to 2023—ranking ninth in the nation for hotel growth.
A recent report also highlights a nationwide resurgence in travel and lodging, with total U.S. hotel properties increasing by over 33% between 2001 and 2024. While the pandemic dealt a sharp blow to the industry—cutting hotel employment by more than half in 2020—consumer spending on accommodations reached record highs in 2023 and continues to surge in 2024.
Locally, The Fountains at Gateway in Murfreesboro is among the most recent developments to announce plans for a new hotel. Developers unveiled the project in March 2023, stating that a high-end boutique hotel will be constructed as part of phase two of the expanding development.
After opening in 2017, the Fountains at Gateway complex is a mixed-use facility offering dining, retail, office, and residential spaces. Located on Medical Center Parkway, the next phase will include a five-story office building with three floors of luxury condominiums surrounding a three-story atrium courtyard, one-and-a-half floors of corporate office space, and additional ground-floor retail—in addition to the planned boutique hotel.
Statewide, the number of hotels rose from 1,628 to 1,817 over four years, adding 189 new locations. However, despite this growth, employment in the hotel sector has yet to fully recover. Staffing levels remain 5.9% below pre-pandemic numbers, equating to a loss of roughly 2,300 jobs.
Nationwide, the hospitality workforce has also struggled to bounce back. Employment in the hotel sector peaked at over 2 million workers in 2019 but declined sharply in 2020. As of the third quarter of 2024, the workforce sits at around 1.87 million—still about 8% below its previous high.
Larger, full-service accommodations are leading the industry’s recovery. Casino hotels have seen the most growth nationwide since 2019, with a 13.2% increase, followed by traditional hotels and motels at 6.9%. Conversely, bed-and-breakfast inns declined by more than 11%, indicating a shift in traveler preferences toward more standardized lodging experiences.
In Rutherford County, the hotel/motel occupancy tax totals 17.25%. This tax, collected per room per night, is divided among the state, county, and municipalities such as Murfreesboro, Smyrna, and La Vergne.
The continued expansion of hotel infrastructure is a positive sign for Tennessee’s robust tourism and travel industry, which contributes billions annually to the state economy. According to the Tennessee Department of Tourist Development, visitors spent over $27 billion in the state in 2022—a number expected to rise alongside increased travel activity.
The full Luxury Link report, including data on 371 U.S. metro areas and all 50 states, is available at https://www.luxurylink.com/blog/cities-that-have-added-the-most-new-hotels. High-resolution graphics and detailed breakdowns of hotel growth and employment are also available for public use.
