Sean Pavone via istockphoto
Nashville has long been known for its twangy guitars, neon lights, and honky-tonk hospitality. But beneath the country charm, a quieter transformation is reshaping the city’s skyline; it is one marked by marble lobbies, rooftop lounges, and Michelin-worthy menus. Once dominated by midscale chains and budget-friendly options for music tourists, Nashville’s hospitality industry is undergoing a luxury evolution, fueled by record-breaking visitor numbers and surging investor confidence.
For this article, I interviewed Jeff Cabriel, Chief Hospitality Officer of Castlerock Asset Management (who manages properties discussed further in this article) to gain a firsthand look at how the city’s hotel landscape has transformed, and the opportunities and growing pains that have come with it.
Tourism Boom and Market Expansion
According to HotelDive, in 2025, the city welcomed around 17.3 million visitors in total, a roughly 2.5% increase from 2024. Tourists from at least 50 miles were forecasted to spend about $11.5 billion in Nashville in 2025, a 3.2% rise from the previous year. These figures illustrate Nashville’s steady transformation into a locally and globally recognized destination.
When I asked Cabriel how he had seen Nashville’s hotel landscape change during his time in the industry, he didn’t hesitate.
“Vastly” he said. “When I arrived in Nashville in 2013, there were only a handful of hotels in the downtown area. Now, it seems there are hotels opening every few months. This has had both positive and negative impacts on the city. While the business and tax revenue has been one for the record books in terms of speed and volume, there have been challenges with staffing, costs, etc. This city historically was not a hospitality market and became one overnight essentially.”
According to Newmark’s Hotel Nsights Report, Nashville was still in an “expansion phase” in early 2025. In this stage, “hotels perform adequately, contributing to a resilient economy that has fully exited from the pandemic environment. Displacement demand is high, new hotel supply is feasible, and the overall economy is expanding.” Although occupancy levels decreased between 2024 and 2025, Nashville’s hotel market is still growing steadily and performing well after recovering from the pandemic.
Defining “Luxury” in the Nashville Context
When asked what triggered the recent surge in luxury and boutique hotels opening, Cabriel pointed to “demand and lack of availability. I believe Nashville has become a destination for many people; however, the hotels didn’t cater to luxury travel. I think Nashville, as a city, is still trying to figure out how to appeal to luxury customers, and we are not quite there yet. The luxury hotels that have opened have struggled to deliver expectations of other tier 1 cities. There have been many improvements over the last few years, but it’s still something they are working on.”
Boutique and luxury properties are now striving to meet these expectations by bridging southern hospitality with international standards, a shift that’s transforming the way Nashville defines “luxury.” Projects such as Pendry Nashville and the upcoming St. Regis reflect how far the city has leaned into high-end development. These hotels combine personalized service with local art, live music partnerships and designs that showcase Tennessee’s craftsmanship. Even legacy institutions such as the Hermitage Hotel have modernized through careful restoration, preserving Nashville’s history while courting a new class of travelers.
When asked what “luxury” means in the Nashville context, Cabriel admitted that the definition is still evolving. “I don’t believe we have defined luxury here yet. The city isn’t really set up as a traditional luxury market, so we have work to do. Most true luxury hotels throughout the world know how to cater to international travelers and we are still working that piece out.”
He also pointed out that certain neighborhoods will help shape that identity. “I think … neighborhoods like 12 South and Wedgewood Houston leaning more into luxury retailers and restaurants will help.”
Oversupply and Market Sustainability
According to CoStar News, Nashville’s hotel inventory has ballooned by nearly 50% in the past decade – with another 2,800 rooms that opened in 2025 – prompting concerns about oversupply. When I asked if this rapid expansion is sustainable, Cabriel replied candidly: “We are already in an oversupply. I think the decline in development moving forward recently will give the city a much-needed break. Hotel openings have outpaced capabilities in many cases. The convention center is running out of space, and the city’s sales pace does not seem to align with the growth of rooms in the market. [However] yes, it is sustainable.” In other words, Nashville already has more hotels than the city can support, so slowing down new development will help balance things out. While the market can still sustain this growth long term, another challenge that arises is the growing competition as too many hotels are fighting for the same pool of guests.
Rising labor and operational costs have emerged as perhaps the greatest challenge for hotel managers. When asked how labor shortages have affected day-to-day operations, Cabriel said: “This is an ongoing challenge in every hotel, every day. 10 years ago, there were no 3rd party labor providers, and now there are very few, if any, hotels that do not use these resources to find labor. Costs have increased significantly as well.”
The hardest positions to fill, he said, are in housekeeping and culinary roles. “The hard work it takes to complete these jobs with the also (at times) lack of appreciation. It takes a special person to work in the operations of a hotel.”
When asked if rising wages and turnover has impacted profitability, Cabriel responded: “Substantially”, he noted. “Profitability of course because of the wages but also the turnover challenge is difficult to manage. There is a ton of effort put into training associates and, if they leave shortly after, that time was essentially wasted.”
His solution, however, wasn’t rooted in technology or outsourcing but in culture. “It’s all about culture here. It sounds easy but treating people the way you would like to be treated. This is a lost art at times, surprisingly. We have always set an Employee’s First culture and mentality at the hotels I have been a part of, and it seems to resonate.”
Still, balancing labor costs, retention, and rising guest expectations remains an uphill battle. As Cabriel observed, luxury is labor-intensive.
Economic and Cultural Effects
Despite these headwinds, Nashville’s hotel boom continues to generate tangible economic and cultural benefits. Each new development fuels local job creation not only in hotel operations but across construction, design and tourism services.
When asked what he sees as the biggest risks and opportunities for the next five years, Cabriel said. “Oversupply, the city’s outlook on taxes for businesses such as hotels, the service industry in general is tough…with so many restaurants and bars it becomes hard for the hotels to keep top talent as they can go find another job easily. Additionally, we will need to figure out the luxury and international traveler vs the typical Broadway country music guest.”
As for whether Nashville’s luxury growth threatens its authentic identity, he was optimistic. “I don’t think it threatens anything. It is needed. I just believe the first few to have come or to come will struggle until all the kinks are worked out. Eventually, I predict that any type of traveler will want to visit Nashville [so] we have to have more than just drinking and Broadway to keep their interest.” Nashville’s luxury and boutique hotel boom is more than an economic trend; it’s the story of a city learning to harmonize ambition with authenticity. Nashville is still writing its story, and hospitality will play one of the biggest roles in how that story is told.
