Market Overview
Alabama's lodging market enters mid-2026 on an upswing — a notable contrast to markets normalizing off one-off event peaks. Trailing-12-month blended occupancy sits in the low-60s (≈60.4%, est.) with ADR (≈$120, est.) and RevPAR (≈$73, est.) both rising faster than the U.S. average. The engine is demand, not just rate: the Gulf Coast posted a record year, with visitor spending on lodging across Alabama's Beaches (Gulf Shores, Orange Beach, Fort Morgan) reaching $923 million in 2025, up from $871 million in 2024 — and increasingly a year-round rather than summer-only story.
The state's metros each run a distinct playbook. Huntsville is the growth standout, powered by the Redstone Arsenal / aerospace-and-defense corridor and one of the fastest-growing populations in the Southeast — supporting the state's strongest occupancy (≈65%, est.). Birmingham anchors on corporate, UAB medical, and sports demand and carries the largest room base (~17,240, est.) — and, at roughly 5.8% of inventory under construction, the highest pipeline of any Alabama market. Mobile leans on its port, industrial base, and convention center (~5.6% of inventory under construction), while Montgomery runs a steadier government-and-capital profile with Hyundai-driven industrial demand. Gulf Shores–Orange Beach is the ADR premium market (≈$205, est., blended), with sharp summer compression.
Nationally, Alabama sits below U.S. averages on ADR (~$160) and roughly in line on occupancy (~62%), but its trajectory and its supply growth are both above the Southeast norm. With Birmingham and Mobile posting the region's heaviest construction pipelines relative to inventory, supply — not demand — is the variable most likely to cap RevPAR upside over the next several quarters.
Headline Metrics
Blended statewide indicators across the four covered submarkets, with year-over-year change. Occupancy change is shown in percentage points; rate, supply, and pricing in percent.
Trailing-12mo blended statewide; lifted by Gulf Coast + Huntsville demand.
Per occupied room/night, blended; below the ~$160 national average.
Revenue per available room; rate-led growth outpacing the U.S.
Existing room inventory across the five covered submarkets.
Birmingham (~5.8%) & Mobile (~5.6%) carry the state's highest pipelines.
Trailing-12mo transactions; skewed up by Gulf Coast resort trades.
Performance Trends
Twelve quarters of statewide blended performance, highlighting the leisure-driven summer (Q2/Q3) demand peaks — anchored by Gulf Coast tourism — that define the market's seasonality.
Occupancy Rate
est.Statewide blended, % of available rooms sold
ADR & RevPAR
est.Average daily rate vs. revenue per available room ($)
Net Demand vs. New Supply
est.Quarterly net rooms-sold change vs. new rooms delivered (rooms)
Room Inventory Growth
est.Cumulative existing room supply across covered submarkets
Submarket Breakdown
Click any column to sort. All submarket figures are estimates (est.) calibrated to reported occupancy and rate levels. Totals are room-weighted.
| Submarket↕ | Rooms▼ | Occupancy↕ | ADR↕ | RevPAR↕ | Under Constr.↕ |
|---|---|---|---|---|---|
Birmingham Corporate, UAB medical, sports | 17,240 | 62.0% | $118 | $73 | 1,000 |
Mobile Port, convention, industrial | 14,300 | 58.0% | $105 | $61 | 800 |
Huntsville Aerospace/defense (Redstone), tech | 13,500 | 65.0% | $115 | $75 | 900 |
Montgomery Government, capital, Hyundai | 9,000 | 57.0% | $98 | $56 | 250 |
Gulf Shores–Orange Beach Beach leisure, seasonal resort | 8,500 | 55.0% | $205 | $113 | 600 |
| Statewide (covered) | 62,540 | 60.1% | $123 | $74 | 3,550 |
Covered Submarkets
stylizedMarker size scaled to room inventory.
Development & Pipeline Activity
The hospitality analogue of leasing activity: notable new builds, conversions, renovations, and planned additions shaping near-term supply.
| Property | Rooms | Submarket | Type | Status | Timing |
|---|---|---|---|---|---|
| Brown Marx Tower (adaptive reuse) | 338 | Birmingham | Conversion | 190 short-term + 148 longer-stay keys; historic tower | 2026 |
| Residence Inn / Courtyard — Grandview | 180 | Birmingham | New build | Dual-brand; 96 suites + 84 rooms; under construction | 2026 |
| The Painted Lady | 22 | Birmingham | New build | Luxury boutique hotel | 2026 |
| Cummings Research Park select-serviceest. | 250 | Huntsville | New build | Aerospace-corridor demand; under construction | Q4 '26 |
| Downtown convention-adjacent hotelest. | 200 | Mobile | New build | Under construction near Arthur R. Outlaw Convention Center | 2027 |
| Beachfront resort towerest. | 300 | Gulf Shores–Orange Beach | New build | Phased delivery; leisure-driven | 2026–27 |
Transaction Activity
Representative recent hotel trades by submarket and segment. This table is illustrative/modeled (est.) — replace with verified comps before publication.
| Property | Keys | Price | $ / Key | Submarket | Segment | Date |
|---|---|---|---|---|---|---|
| Beachfront resort (repositioned)est. | 200 | $60.0M | $300,000 | Gulf Shores–Orange Beach | Resort / lifestyle | Q2 2025 |
| Orange Beach condo-hotelest. | 90 | $22.5M | $250,000 | Gulf Shores–Orange Beach | Resort / condo-hotel | Q4 2025 |
| UAB / medical district full-serviceest. | 250 | $37.5M | $150,000 | Birmingham | Upper-upscale | Q1 2026 |
| Research Park select-serviceest. | 130 | $18.2M | $140,000 | Huntsville | Upper-midscale | Q4 2025 |
| Downtown historic full-serviceest. | 150 | $16.5M | $110,000 | Mobile | Upper-upscale | Q3 2025 |
| I-85 limited-serviceest. | 110 | $9.9M | $90,000 | Montgomery | Midscale | Q1 2026 |
Forward Outlook
Through the next 12 months we expect continued rate-led RevPAR growth in the low-to-mid single digits, outpacing the essentially flat U.S. forecast. Leisure demand on the Gulf Coast should stay strong and increasingly shoulder-season resilient, while Huntsville's aerospace-and-defense expansion keeps its occupancy the highest in the state. Birmingham and Montgomery hold steady on corporate, medical, government, and industrial (Hyundai) demand. The clearest upside is in ADR discipline at compression events and beach peaks; the clearest risk is midweek corporate softness bleeding in from the national picture.
Supply is the variable to watch. Alabama carries some of the Southeast's most aggressive pipelines — Birmingham near 5.8% and Mobile near 5.6% of existing inventory under construction — and a wave of select-service and adaptive-reuse deliveries (e.g., Birmingham's Brown Marx Tower and Grandview dual-brand) will test whether demand growth can keep pace. We expect occupancy to hold in the low-60s rather than climb materially, as new rooms absorb the incremental demand. On investment, Gulf Coast resort assets should continue to clear at premium per-key pricing, while metro select-service and extended-stay trades price on in-place cash flow.
Sources & Assumptions
Every grounded source and every estimated figure, surfaced for audit. Figures marked “est.” throughout the report are researched or modeled estimates, not official prints.
Data Sources
- Bham Now — Birmingham leads Alabama in new hotel construction (Jul 2026)Rooms under construction & pipeline % by market (Birmingham ~1,000/5.8%; Huntsville/Alabama North ~1,000/3.7%; Mobile >800/5.6%; Alabama South ~600/2.6%); named projects: Brown Marx Tower (338), Grandview Residence Inn/Courtyard (180), The Painted Lady (22).https://bhamnow.com/2026/07/02/birmingham-hotel-market-leads-alabama-in-new-construction/
- Gulf Shores & Orange Beach Tourism — 2025 tourism impactRecord 2025 lodging revenue of $923M across Alabama's Beaches (vs $871M in 2024); shift toward year-round (spring/fall) visitation.https://www.gulfshores.com/media/leisure-press-releases/gulf-shores-orange-beach-tourism-delivers-tourism-impact-update-for-alabama-beaches/
- AirROI — Alabama short-term-rental benchmarks (2026)STR/Airbnb reference points used to calibrate demand: Birmingham 38.2% occ / $211 ADR; Huntsville 38.5% / $146; Gulf Shores 39.2% / $417; Orange Beach ~60% / ~$419.https://www.airroi.com/airbnb-data/united-states/alabama/birmingham
- CBRE Hotels / CoStar–Tourism Economics — U.S. figures & 2026 forecastNational benchmarks and 2026 outlook: ADR +1% YoY, occupancy ~62.1%, RevPAR +0.6%; downgraded forecast context.https://www.cbre.com/insights/figures/q1-2026-us-hotel-figures
- Mobile CVB — downtown convention hotel contextArthur R. Outlaw Convention Center (317,000 sf; 100,000 sf exhibit) anchors downtown Mobile lodging demand.https://www.mobile.org/meetings-conventions/
Estimates & Methodology
- All headline KPIs (occupancy, ADR, RevPAR, total supply, rooms under construction, $/key) are est. — trailing-12-month blends across the five covered submarkets in a CoStar/STR-style aggregation; not an official market print.
- 12-quarter time series (occupancy, ADR, RevPAR, new supply, net demand, inventory) is est./modeled, calibrated to reported facts: record 2025 Gulf Coast lodging revenue, the state's construction pipeline, and a leisure-driven summer demand peak.
- Birmingham (~17,240 rooms) and Mobile (~14,300 rooms) inventory are DERIVED from reported 'rooms under construction ÷ pipeline %' ratios; treat as reported-adjacent estimates.
- Huntsville inventory (~13,500) is est. — the STR 'Alabama North' region (~27,000 rooms implied) is broader than the Huntsville metro; the metro subset is estimated.
- Gulf Shores–Orange Beach figures are HOTEL-ONLY estimates; the market is heavily vacation-rental, and the reported $923M is total lodging revenue (hotels + rentals).
- Submarket occupancy, ADR, and RevPAR are est., calibrated to reported pipeline %, beach revenue, and STR reference points.
- Q2 2026 values are estimates for a quarter still in progress; latest hard data points are Q1 2026 / full-year 2025.
- Statewide totals cover only Birmingham, Huntsville, Mobile, Montgomery, and Gulf Shores–Orange Beach — not every Alabama submarket (e.g., Tuscaloosa, Auburn, Dothan excluded).
- The Transactions (Sales) table is illustrative/modeled — representative of recent Alabama trades, not confirmed individual deals. Verify comps before publication.
- The state map is a stylized, approximate SVG for orientation only — not to geographic scale.
Your Hospitality Team
Local expertise for buyers, sellers, and investors across the Gulf South hotel market. Reach out to discuss valuations, dispositions, or acquisition opportunities.
With over 25 years of experience in real estate, Manish is one of the select agents simultaneously holding the industry's highest hotel and real estate certifications — a CHA and a CCIM. Born and raised in Baton Rouge, he earned his MBA from Louisiana State University and has been active in hotel development since the early 2000s, building strong relationships with operators, vendors, and franchisers across the Gulf region.
Currently director of 40+ family-owned commercial properties across Southern Louisiana, Manish draws on his owner/operator experience to maximize value for clients. He was named 2017 Regional Newcomer of the Year at his prior national brokerage, and in 2023 ranked Top 10 in regional sales volume — consistently surpassing regional hotel price-per-room sales records.
Asha is a Baton Rouge–based commercial real estate agent specializing in hospitality and investment properties. As part of the hotel brokerage team at Stirling Properties, she works with owners and investors across the Gulf South on acquisitions and dispositions.
With a background in residential and commercial real estate plus property management, Asha understands both the transactional and operational sides of the business — evaluating hotels as operating companies, with a focus on performance, efficiency, and long-term value.
Known for her patience, strong work ethic, and straightforward approach, Asha builds lasting relationships rooted in trust and clear communication. Her goal is simple: help owners maximize value and help investors move forward with confidence.