Bloomington, MN hotel market report, Q2 2026

Bloomington is one of the most concentrated airport-and-leisure hotel markets in the United States. Its 47 hotels and 9,201 rooms sit between Minneapolis-St. Paul International Airport (MSP) and the Mall of America (MOA), making it the state's largest hotel district by number of hotels and second only to the Minneapolis CBD in rooms. Every key measure is at the top of its 10-year typical range, and nothing is under construction.

Executive summary

Performance kept improving over the trailing twelve months: occupancy 66.3% (+1.7 pts), ADR $130.69 (+0.5%) and RevPAR $86.70 (+2.2%), every key measure at the top of the market's 10-year typical range.

Demand rests on a rare stack of drivers. Mall of America, the second-largest U.S. mall by leasable area, draws about 40 million visitors a year. MSP handled 36.1 million passengers in 2025, with a record 3.61 million international travelers. Corporate demand comes from headquarters and regional offices including Wells Fargo, Express Scripts, Toro, Donaldson and Ceridian/Dayforce, and big events at U.S. Bank Stadium, the Minneapolis Convention Center and Target Center push overflow south. CoStar shows zero rooms under construction and nothing in the announced pipeline, so the existing hotels absorb growing demand without dilution.

The investment numbers look attractive by comparison. Bloomington trades at a 10.4% cap rate (current and forecast) and $130K a room, with $62.3M of sales across seven transactions in the past year, a much deeper trading pool than the Minneapolis CBD ($41.1M, no closed transactions) or Rochester ($18.3M, three transactions). For investors who want flagged, large-hotel exposure to a top-25 U.S. tourism market without the complexity of a downtown big box, the Mall of America corridor remains one of the most defensible markets in the Upper Midwest.

The market

Bloomington is Minnesota's fourth-largest city, just south of Minneapolis on the Minnesota River. It has about 87,589 residents (2026) and a median household income of $93,211, both well above state and national medians. For its size it sits at the center of one of the Upper Midwest's most productive corridors: it has more jobs per resident than Minneapolis or St. Paul, thanks to dense corporate headquarters and the Mall of America, which alone employs about 13,000 people.

The hotel market is tight. About two-thirds of the rooms sit within 1.5 miles of the MOA and MSP node along East 78th Street, Killebrew Drive, American Boulevard and Lindau Lane. A second cluster of larger upper upscale and conference hotels lines West 78th Street and American Boulevard West, anchored by the Renaissance, Hilton Bloomington, Embassy Suites West and the city's two Hilton Garden Inns. Next to MSP, the 16th-busiest U.S. airport, and linked to MOA by skyway and light rail, Bloomington has a demand profile few suburban markets can match.

New supply

There is no pipeline. CoStar shows no hotels under construction, in final planning or proposed in Bloomington, and no rooms delivered in the past 12 months. The market last absorbed new hotels in 2023-2024: the Hyatt House Mall of America (150 rooms, 2023) and the MainStay Suites MSP Airport (80 rooms, 2024).

The largest project near the hotel cluster is the proposed Mystery Cove Water Park, a $422M, 320,000+ sq ft indoor waterpark from Triple Five Group next to MOA. It has been delayed and redesigned smaller, and its timing is uncertain, but if built it would be the largest indoor waterpark in the United States and would reshape leisure demand in the South Loop. Mall of America is also moving ahead with a phased expansion (a new atrium, food court and 50 to 75 retail spaces) led by Mortenson, finishing in stages through 2028. Neither adds hotel rooms, but both directly feed demand for Bloomington's 47 hotels.

Demand drivers

Bloomington's demand is among the most diversified in the Upper Midwest. Unlike a typical airport market, it captures full-spectrum leisure through MOA, airline crews and travelers through MSP, corporate demand from headquarters in the city itself (not just downtown spillover), and convention and sports compression from downtown Minneapolis. That balance shields it from the single-segment shocks that hit pure airport or resort markets.

Mall of America

MOA is the second-largest enclosed shopping center in North America by leasable area, the largest by visitors (~40 million a year), and the single biggest driver of Bloomington hotel demand. About 30% of its visitors travel more than 150 miles, and many stay in nearby hotels linked by skyway, light rail or shuttle. 2026 highlights include Panda Fest (July 31 to August 2, 80+ Asian food vendors), the Oddities & Curiosities Expo (May 23), the Totally Rad Vintage Fest (April 18) and the Royal Canadian Circus (April 10). The Mortenson-led expansion will deepen its pull through 2028.

MSP airport

MSP handled 36.1 million passengers in 2025. International traffic set records: 35 international destinations and 3.61 million international passengers (10% of the total). Delta's 2025 nonstops to Copenhagen and Rome bring MSP to eight European destinations, a shift that supports higher-rate upscale and upper upscale demand at airport hotels. The Metropolitan Airports Commission is investing $263M in the Terminal 2 North expansion (gates, seating, concessions) through 2026-2027, part of a $2B+ capital program.

Corporate and group

The corporate base is unusually deep for a suburb. Toro, Donaldson Company and Ceridian/Dayforce have their headquarters here; HealthPartners has its regional system headquarters (~22,500 system employees); Express Scripts has a major regional operation; and Wells Fargo has a large regional presence. Together they anchor steady weekday travel and small groups. MOA's event venues and the Bloomington Convention Center handle most mid-size meetings.

Sports and events in Minneapolis

U.S. Bank Stadium's 2026 calendar (SummerSlam, August 1-2; USA Volleyball Junior Nationals, June 19-22, stay-and-play; and stadium concerts by Morgan Wallen, Bruno Mars and Ed Sheeran) fills downtown hotels and pushes overflow south to Bloomington. STR projects a national +0.4% RevPAR lift from 2026 FIFA World Cup spillover; Minneapolis is not a host city, but watch parties and regional travel should register as a small positive.

Healthcare and higher education

HealthPartners, Children's Minnesota and the University of Minnesota system generate steady year-round referral demand. The MIX (Minnesota Innovation Exchange), a Mortenson and UMN Foundation innovation campus breaking ground in 2026, will add long-tail demand as research and corporate tenants move in from 2027-2028.

Developments to watch

Performance

All figures are from CoStar's report dated May 26, 2026. CoStar tracks 9,201 inventory rooms but measures occupancy, ADR and RevPAR on a 9,511-room analytic pool of reporting hotels; market size always refers to the 9,201 inventory rooms.

The 12-month trend

Seasonality

Summer leisure compression drives Bloomington's year. June through September deliver monthly occupancy of 75% to 82% and the year's highest ADR ($138 to $142). November through February dip to 55% to 62% occupancy at $115 to $125. CoStar's monthly bars for January to April 2026 show occupancy running modestly ahead of 2025 in all four months, supporting the +2.2% RevPAR growth over the trailing twelve months.

Against the Minneapolis CBD and Rochester

The three Minnesota markets have very different demand: Bloomington is a suburban airport and leisure cluster, the Minneapolis CBD a full-service urban convention market, and Rochester a medical-tourism market anchored by the Mayo Clinic. Bloomington leads both on occupancy and sits between them on RevPAR. The CBD's ADR is much higher, but persistent occupancy weakness and new supply keep capping its RevPAR upside.

The read-through: Bloomington's mix of the highest occupancy, the most positive 12-month RevPAR change paired with no new supply, and a cap rate near the top of its 10-year range makes it the most defensible buy of the three for investors who put yield and supply visibility ahead of absolute ADR. The CBD's premium ADR and price per room reflect its full-service convention role but also its dependence on weekday and event compression: its 12-month RevPAR is down -1.7% even as inventory has grown. Rochester is the fastest-growing of the three (+8.5% RevPAR) and has no pipeline, but its smaller scale and Mayo-centered demand make it a more concentrated bet.

Ask for a market report on the Minneapolis CBD, Rochester or your own market.

Brands in the market

This is CoStar's full tracked inventory for Bloomington: all 47 operating hotels, whether or not they report to STR. Brands, segments and operators are checked against public property data and CoStar's classification.

Hilton (13 hotels), Marriott (11) and Choice (7) flag 31 of the 47 hotels (66%). IHG (6) and Wyndham (4) add another 21%, and Hyatt has three, led by the 303-room Hyatt Regency. There is one true independent (Bloom Hotel) and one resort operator (Great Wolf Lodge, owned by Blackstone). Choice's presence is magnified by the Radisson Blu, the largest hotel in the market (500 rooms), which it owns through its 2022 acquisition of Radisson Hotel Group Americas.

Brands not in the market

Despite its depth, Bloomington is missing several major brands and one whole parent, real development white space given the market's scale, leisure profile and closeness to MSP.

Risks

Dependence on MOA and MSP

About 60% of Bloomington's hotel demand depends directly or indirectly on MOA and MSP travel. A sustained disruption at MOA (a major retail collapse, a redevelopment delay or a long closure of Nickelodeon Universe) would hit the most exposed hotels hardest: the airport-cluster select-service, upper upscale and lifestyle hotels, the JW, Radisson Blu, Hyatt Regency, AC, element and Cambria in particular. A mix of corporate, group and weekday business at each hotel is the main defense.

Convention center timing

Meet Minneapolis unveiled a 10-year Destination Master Plan in February 2026 that calls for a major modernization of the Minneapolis Convention Center. If it stays on schedule, downtown will win back some of the group and convention overflow Bloomington now gets; delays or cost overruns would push more of that business south.

Airline capacity

MSP passengers fell -3% in 2025, the first decline in four years, blamed on industry pilot and aircraft shortages. Continued capacity discipline by Delta and its competitors could cap domestic travel growth even as international travel sets records, and Bloomington's airport hotels lean heavily on short-stay domestic flyers.

Aging hotels and capital needs

About a third of Bloomington's hotels were built before 2000 (the DoubleTree, Crowne Plaza, Sheraton, Holiday Inn Bloomington West, Comfort Inn, Best Western, Embassy Suites Bloomington and others), and several are in or near PIP cycles. Brands increasingly require large soft-goods and case-goods spending. With today's interest rates and a 10.4% market cap rate, a $5M+ PIP at a mid-tier hotel is hard to make work.

Cap rates vs. performance

Bloomington's cap rate of 10.4% is at the high end of its 10-year range even as RevPAR climbs. That gap suggests buyers are pricing in further discounts or capital and risk premiums; either way, sellers looking for trailing-cash-flow pricing should plan for a longer marketing period.

Outlook

The next 12 months

Bloomington enters the second half of 2026 with momentum. No new supply, a growing MOA event calendar, MSP's record international traffic, a strong U.S. Bank Stadium calendar and a continuing tilt toward leisure travel all support modest RevPAR growth of +2% to +4%. Watch the MOA expansion's construction phasing, the announcement (or delay) of Mystery Cove Water Park, and whether MSP returns to passenger growth.

Two to five years

Three shifts shape the medium term: (1) the MIX innovation campus and Mortenson's Highland Bridge build-out will add steady weekday corporate demand outside the CBD and Bloomington nodes; (2) a modernized Minneapolis Convention Center could compete with Bloomington for mid-size groups, pressuring the larger upper upscale hotels; and (3) PIP cycles will likely drive a wave of recapitalizations and sales of older Hilton, IHG and Marriott hotels, opening doors for value-add operators.

Opportunities

• Buying older upper upscale or upscale hotels nearing a PIP, at going-in cap rates of 10%+, the highest Bloomington has seen in 10 years.
• Building the missing lifestyle and soft brands (Hyatt Centric, Hilton Tempo, Marriott Tribute) across from the JW Marriott on Lindau Lane.
• Economy extended-stay infill (WoodSpring, HomeTowne, Studio 6) near the I-494/Cedar interchange, for project, travel-nurse and contractor demand from the semiconductor expansion.
• Repositioning the Crowne Plaza Suites (430 rooms) or the DoubleTree (472 rooms), both built before 2000, with scale and visible MOA proximity.
• Group and leisure rate arbitrage against the CBD: Bloomington's ADR is $130 against the CBD's $179, with much higher occupancy and no pipeline.

Download the underwriting model to test a PIP-driven acquisition or a new build in the corridor.

Key takeaways

• Minnesota's largest hotel district by number of hotels. 47 hotels and 9,201 rooms make Bloomington the state's deepest concentrated market, with more hotels than the Minneapolis CBD and comparable scale for leisure and group business.
• Performance at the top of the 10-year range. Occupancy 66.3%, ADR $130.69 and RevPAR $86.70 are all in the upper part of CoStar's 10-year typical band, with RevPAR +2.2% and no supply growth.
• No pipeline, no deliveries. Nothing is under construction, in final planning or proposed, so new demand from the MOA expansion, MSP's international growth and U.S. Bank Stadium goes straight to existing hotels.
• High cap rates create buying opportunities. At a 10.4% cap rate (10-year typical 8.62% to 9.95%) and $130K a room, Bloomington offers branded, large-hotel yields that are hard to find elsewhere in the Upper Midwest.
• Franchise gaps point to development. Lifestyle and soft brands (Hyatt Centric, Hilton Tempo, Marriott Tribute, Hotel Indigo), economy extended stay (WoodSpring, HomeTowne, Studio 6) and a true Radisson-family flagship are all underrepresented for the demand this corridor supports.

Own a hotel in Bloomington or near MSP? Request a hotel valuation to see what it would sell for, or ask for a market report on your own market.

Sources and method. Performance, inventory, cap rate, sale price per room, sales volume and 10-year ranges are from CoStar Search Analytics, report dated May 26, 2026, for Bloomington, MN. Peer data is from CoStar reports for the Minneapolis CBD submarket and Rochester, MN, both dated May 2026. The hotel universe is from CoStar's property export, covering 53 tracked properties including demolished and abandoned ones. Demand and pipeline detail is supplemented by research on Mall of America, MSP airport, U.S. Bank Stadium and the Upper Midwest Development Tracker. The demand mix percentages are analytical estimates based on the demand drivers described above.

This report is for information only. It is not an appraisal or a valuation, and it is not investment advice. Figures come from third-party sources believed reliable but not independently verified.