Music City’s tourism scene has exploded in recent years, driving the highest demand for hotels and hospitality seen in our 90+ years in Nashville. This surge will to continue, with industry forecasts projecting steady growth in the coming years. In 2025, Nashville is expected to have 17.5 million visitors, and by 2033, it could have over 20 million. As the demand for accommodations grows, hotel developers are faced with a critical decision—should they renovate an existing property or build a new one from the ground up?
Renovation has become one of the hottest trends in urban hospitality construction, offering developers a unique opportunity to repurpose existing structures into modern, high-end accommodations. But new construction comes with its own set of advantages, particularly when it comes to customization and long-term efficiency.
At Crain Construction, we’ve been at the forefront of Nashville’s hospitality boom, working on dozens of hotel projects across the city. From transforming an old bank into the elegant Fairlane Hotel to converting a parking garage into modern hotel rooms and even building the award-winning BNA Hilton, we’ve encountered nearly every challenge and addressed every question in hospitality construction.
In this article, we’ll share insights and perspectives to help developers navigate the complexities of renovating versus building new in Nashville’s hotel market.
Pros and Cons of Renovating an Existing Building for Your Next Hotel
Pros of Renovation:
- Faster Project Timelines – Renovations often have shorter timelines than new builds, especially if the structural elements remain intact. In Nashville’s competitive hospitality market, a faster turnaround translates to quicker revenue generation.
- Established Location and Brand Equity – Many existing hotels are already located in prime areas such as Downtown, The Gulch, Music Row, or Midtown. These locations offer built-in brand recognition and foot traffic, reducing marketing and acquisition costs.
- Potential Cost Savings – Depending on the scope, renovations can be more cost-effective than new construction, particularly for cosmetic upgrades or partial renovations. Repurposing an existing structure can save significantly on foundation and infrastructure costs.
Cons of Renovation:
- Unforeseen Structural Issues – Older buildings often hide problems such as outdated electrical and plumbing systems, foundation concerns, or structural weaknesses. These unexpected issues can delay timelines and drive up costs.
- Integration Challenges – Blending new systems and designs with existing infrastructure can be complex. Finding compatible materials and ensuring seamless integration requires expertise and careful planning.
- Design and Layout Constraints – Modernizing an older hotel to meet contemporary guest expectations (larger rooms, open lobbies, improved energy efficiency) can be challenging if the existing structure limits flexibility.
Pros and Cons of Building a New Hotel in Nashville
Pros of New Construction:
- Customization and Modern Design – New builds allow for state-of-the-art amenities, energy-efficient systems, and optimal layouts that meet the latest guest expectations. This is especially valuable in Nashville’s competitive tourism and convention market.
- Predictable Costs – While new construction projects can also experience cost fluctuations, they generally offer more predictable budgeting compared to renovations, where surprises are more common.
- Long-Term Cost Efficiency – New hotels generally require less maintenance and have better energy efficiency, leading to significant savings over time. Investing in new construction often results in lower operational costs and improved sustainability.
Cons of New Construction:
- Higher Upfront Costs – Rising construction costs and land prices in Middle Tennessee make new builds a substantial investment. It has become increasingly important for developers to assess the return on investment and adjust their expectations to consider the long-term value.
- Site Preparation and Infrastructure Challenges – Unlike renovations, which work within an existing structure, new construction in Nashville often requires ground stabilization, including grading, foundational support, and environmental mitigation. For urban construction in areas like downtown Nashville, site constraints and underground utilities can add complexity and costs.
- Disruption to Surrounding Businesses – If the new hotel is being built in a high-traffic area, construction noise, and road closures can impact surrounding businesses, potentially leading to permitting challenges or community pushback. Community engagement is key to successful construction in Nashville.
Best Practices for Nashville Hospitality Construction
Navigating the complexities of hotel development in Nashville requires expertise and thoughtful pre-construction questions to maximize success. The good news is that challenges can be overcome with the right approach. Here are some valuable resources and best practices:
- Best Practices for Hospitality Construction – This post provides practical advice for developers in the hospitality construction industry.
- Transforming Historic Spaces: A Guide to Adaptive-Reuse – This post highlights lessons learned from decades of renovation projects in Nashville.
- Crain’s Top Hospitality Projects – This post showcases some of our most prominent hotel projects in recent years.
Unlock the Potential of Nashville’s Hospitality Market
The decision to renovate or build new hinges on a variety of factors, including the budget, location, timeline, and long-term goals. At Crain Construction, we’ve worked alongside some of Nashville’s top developers to navigate these challenges and bring high-quality hospitality projects to life.
If you’re considering a new hospitality project, we’d love to help. Connect with our team to discuss your vision, explore our process, and get expert insights tailored to your specific goals.
