For years, resort funding selections have been guided by a easy rule of thumb: larger markets are typically safer markets. Gateway cities comparable to New York, Los Angeles, and Chicago have lengthy been seen because the surest bets for improvement because of their various buyer combine and vacation spot sights. Smaller cities, alternatively, had been typically dismissed as too unstable or too restricted in demand to draw severe capital.
Lately, nonetheless, secondary and tertiary cities have attracted the eye of builders, making these markets ripe for alternative. Lodging Econometrics stories 6,280 U.S. resort tasks within the pipeline on the finish of Q2 2025, with early-planning counts rising 12 months over 12 months and a significant share of exercise coming from conversions and renovations. That blend is vital in smaller markets the place right-sizing product can transfer quicker than ground-up builds.
The most recent knowledge from Kalibri helps that exercise: with efficiency information from greater than 35,000 resorts nationwide, Kalibri’s July 2025 knowledge exhibits properties in midsized cities and smaller markets are delivering income and profitability development that always outpaces their bigger counterparts. In some circumstances, they’re offering more healthy returns as a result of they steadiness regular demand with decrease buyer acquisition prices.
Abilene: Shocking Energy in West Texas
Few would have predicted that Abilene would rank among the many nation’s fastest-growing resort markets. In July 2025, Abilene’s Visitor-Paid RevPAR leaped from $59.73 to $101.41, a 70 % enhance in comparison with the identical month in 2024. That type of development rivals headline efficiency in a lot bigger cities.
Abilene’s demand profile illustrates why smaller markets can thrive. Regional company journey, government-related enterprise, and project-based stays offered a base that absorbed new capability whereas permitting charge development. On the similar time, markets like Abilene typically rely extra closely on direct bookings and repeat friends, which implies extra income is retained. The outcome isn’t just larger income, however stronger revenue conversion.
Madison: The Energy of Steadiness
The place Abilene demonstrates sharp development, Madison, Wisconsin, highlights the worth of steadiness. A state capital and college hub, Madison advantages from authorities, schooling, healthcare, and industrial demand. In July 2025, town’s Visitor-Paid RevPAR rose from $90.03 to $102.10, a 13 % enhance 12 months over 12 months.
Madison’s efficiency underscores the steadiness that comes from diversified demand. Whereas top-tier cities typically wrestle with unstable worldwide journey or heavy new provide, Madison exhibits how midsized markets can ship constant, sustainable outcomes. For traders, that type of resilience is as beneficial as fast development.
Past the Case Research: A Broader Pattern
Abilene and Madison are usually not remoted. Throughout the Midwest, Plains, and smaller Western markets, Kalibri knowledge exhibits comparable patterns. Cities like Fort Wayne, Indiana, or San Angelo, Texas, are seeing RevPAR development that outpaces a lot bigger metro areas.
Lodging Econometrics knowledge confirms the worth of smaller market improvement. The pipeline features a significant share of early-planning tasks, suggesting builders acknowledge the chance in midsized cities.
The bigger story is that many Tier 2 and Tier 3 markets now present a more healthy steadiness between demand and provide, between occupancy and charge, and between income and profitability. For homeowners and traders, that steadiness is crucial. It alerts not solely near-term efficiency but in addition the flexibility to face up to financial shifts with much less volatility.
Why Profitability Might Matter Extra Than Income Progress
Trying solely at RevPAR can masks the total image. Kalibri’s profitability-focused metric, COPE RevPAR (Contribution to Working Revenue and Bills per Out there Room) reveals how a lot income truly drops to the underside line after acquisition prices. Smaller markets, with stronger direct reserving penetration and fewer reliance on costly on-line channels, typically retain extra income per greenback earned.
For traders, this distinction is essential. Two resorts would possibly put up the identical RevPAR, however the one with decrease acquisition prices delivers larger internet working revenue and improved long-term asset worth. That benefit continuously lies in locations traditionally missed by the trade.
Redefining ‘Secure’
The information requires a reframing of what security means in resort improvement. It’s not nearly market dimension or quantity of demand. It’s about profitability, stability, and resilience. By these measures, many midsized cities are proving themselves not solely viable however, in circumstances like Abilene and Madison, maybe superior to bigger metropolitan areas.
For homeowners, manufacturers, and traders, the lesson is obvious. Secondary and tertiary markets deserve a spot on the middle of development methods. They present that the following cycle of resort funding success will not be outlined by the most important cities, however by the neatest decisions in locations that mix development with effectivity.
