Research Market report
Clear Lake, IA hotel market report, Q2 2026
- Clear Lake
- Cerro Gordo County
ADR at a 10-year high of $97.00 (+1.8%), RevPAR $50.36 (+2.5%) and 51.9% occupancy across 510 rooms; the 45-key Oaks Hotel and Surf District ahead.
Clear Lake is a small but distinctive Iowa hotel market: lake-driven leisure, healthcare overflow from neighboring Mason City and steady traffic on the I-35 corridor. ADR has reached the highest level in CoStar's 10-year record while occupancy holds near its average, and the $35.2M Surf District revitalization is the catalyst to watch.
Boundaries, roads and water: U.S. Census Bureau (TIGER/Line).
Executive summary
Occupancy, 12 months
51.9%
+0.7% YoY
ADR, 12 months
$97.00
+1.8% YoY
RevPAR, 12 months
$50.36
+2.5% YoY
Hotels
11
510 rooms
CoStar tracks 11 hotels with 510 rooms in Clear Lake, with performance measured on a 535-room analytic pool. The market is stable but very small, with big seasonal swings and a concentrated supply base.
Trailing twelve-month occupancy of 51.9% is close to the 10-year average of 53.1% and well inside the typical range. ADR of $97.00 is at the very top of the 10-year extreme high band: owners have pulled the rate lever while occupancy has leveled off. RevPAR of $50.36 is +2.5% year over year and sits at the upper end of its typical range. No rooms were delivered in the past 12 months, and only one hotel is in advanced planning: the boutique Oaks Hotel, 45 rooms, due in late 2027.
The growth story is the $35.2M Surf District revitalization, anchored by the new Surf Ballroom Music Experience Center and the Not Fade Away immersive museum. With the Oaks Hotel planned and a Home2 Suites under construction in Mason City, the corridor is set for measurable leisure demand growth with little new supply in Clear Lake itself.
| Existing hotels | 11 |
|---|---|
| Inventory rooms | 510 |
| Analytic (reporting) rooms | 535 |
| Rooms under construction | 0 |
| Rooms delivered, last 12 months | 0 |
| Market cap rate | 9.9% |
| Market sale price per room | $61K (prior $60.4K, +1.0%) |
| Sales volume, last 12 months | $3.7M (3 transactions) |
The market
Clear Lake is a lake-resort city in Cerro Gordo County, north-central Iowa, about 5 miles west of Mason City on Interstate 35 and U.S. Highway 18. Its 2026 population is about 7,600, with a median age of 49.2 and a median household income of $70,278. Small as it is, it is the leisure anchor for a North Iowa Corridor economy of about 47,000 people centered on Mason City.
The local economy mixes leisure tourism (the lake, the historic Surf Ballroom, summer recreation), light manufacturing, professional services (Kingland, a Clear Lake-based fintech and data services firm) and One Vision, a non-profit disability services provider with nearly 650 employees. Mason City adds healthcare (MercyOne North Iowa, 2,600+ staff), manufacturing (Curries, Sukup, Kraft Heinz, Cargill Kitchen Solutions, and Stellar Industries in nearby Garner) and education (NIACC).
Clear Lake hotels draw leisure guests all year, but summer dominates: June through August bring peak occupancy and rate compression from lake recreation, the Color the Wind Kite Festival, summer concerts at the Surf Ballroom and Iowa's wider drive-to tourism. May and September increasingly fill with event weekends, and winter is anchored by the Winter Dance Party at the Surf Ballroom. Minneapolis-St. Paul (130 miles north on I-35) and Des Moines (120 miles south) put Clear Lake squarely in the Upper Midwest drive market.
| Indicator | Value | Notes |
|---|---|---|
| Population (2026) | ~7,600 | Slightly below 7,666 at the 2020 census |
| Median household income | $70,278 | Above the Iowa median |
| Median age | 49.2 years | About 10% above the county median; a retiree and lake-resident base |
| North Iowa Corridor population | ~47,000 | Cerro Gordo County, including Mason City |
| Distance to Minneapolis | ~130 miles north on I-35 | Main drive market for leisure |
| Distance to Des Moines | ~120 miles south on I-35 | Second drive market |
| Distance to Mason City | ~5 miles east | The two are often treated as one region |
| Annual event economic impact | ~$20M | Clear Lake Chamber of Commerce |
New supply
Clear Lake's pipeline is light but matters, given how few rooms the market has. (The existing hotels are listed under Brands in the market below.)
Under construction
Nothing is under construction inside Clear Lake. The biggest project in the corridor is the 88-room Home2 Suites by Hilton in downtown Mason City (Riverwalk District, 214 S. Delaware Ave.), developed by Kinseth Hospitality for an estimated $15M. It broke ground in October 2025 and is set to open by the end of 2026. It sits outside Clear Lake, but it will compete for some of the weekday corporate and healthcare business Clear Lake's select-service hotels now capture.
Proposed and in planning
The Oaks Hotel: 45 boutique rooms in the Surf District, just northwest of the Surf Ballroom, on the site of the former Hilltop Motel. The developer is MarketPointe of White Bear Lake, MN, through Clear Lake Hotel Development LLC. It re-imagines the original Oaks Hotel, a four-story 1893 summer resort that burned in 1922. The North Iowa Cultural Center & Museum, which operates the Surf Ballroom, will own the building and a third party will manage it. Groundbreaking is targeted for spring 2026 and completion for November 2027.
No other hotels are proposed or planned. The pipeline is a single project, but its boutique, lifestyle positioning is new to Clear Lake and would fill a real gap above the midscale and economy hotels that dominate today.
| Under construction | 0 rooms (0% of existing inventory) |
|---|---|
| Proposed or final planning | 45 rooms (~8.8% of the 510-room inventory) |
| Net impact | A modest addition with little saturation risk; the Oaks would shift the mix toward upper-tier leisure product |
Demand drivers
Clear Lake's demand is unusually leisure-heavy for a small Upper Midwest town. The lake, the Surf Ballroom and event weekends make up the largest share; healthcare overflow from Mason City and I-35 pass-through traffic fill most of the rest. Corporate demand is modest given the small employer base.
Leisure and lake tourism
The 3,684-acre lake is the namesake draw, with boating, fishing, sailing and beaches from about Memorial Day to Labor Day. The waterfront, public beaches, McIntosh Woods State Park and the City Park lighthouse anchor the summer season. Events such as the Color the Wind Kite Festival, the July 4th celebration and the summer concert series add an estimated $20M to the local economy, according to the Clear Lake Chamber of Commerce.
Events and the Surf District
The Surf Ballroom, built in 1948 and a National Historic Landmark, holds 2,100 people across 30,000 sq ft of entertainment space. Known as the last stage of Buddy Holly, Ritchie Valens and J.P. "The Big Bopper" Richardson on February 2, 1959, it draws music tourists all year and hosts the annual Winter Dance Party each January and February. The $35.2M Surf District revitalization, anchored by the Surf Ballroom Music Experience Center and the Not Fade Away immersive museum, is set to expand event-driven demand from 2026-2027. Funding includes a $4.37M Destination Iowa grant and a $400K Community Attraction and Tourism (CAT) grant.
Healthcare overflow from Mason City
MercyOne North Iowa Medical Center in Mason City (2,600+ staff, ~400 providers, and a network of 8 critical access hospitals plus clinics) brings patients' families, traveling clinicians and contract medical workers. Mercy Clinic and Mason City Clinic add more clinical volume. Mason City hotels take most of this business, but Clear Lake's select-service hotels, notably the Fairfield Inn & Suites, routinely take the overflow.
Corporate and manufacturing
Clear Lake's own corporate demand comes from Kingland (enterprise software for financial services and accounting clients), One Vision (650 staff), International Messengers and Stellar Industries (work trucks and trailers, headquartered in Garner). In Mason City, Curries, Sukup Manufacturing, Kraft Heinz, Cargill Kitchen Solutions, Principal Financial Group, McKesson, Smithfield and Woodharbor Custom Cabinetry add weekday travelers and contractors. Manufacturing project travel is a steady but unspectacular base.
Pass-through I-35 traffic
I-35 carries heavy north-south traffic between Minneapolis-St. Paul and Des Moines and Kansas City. Clear Lake's I-35/US-18 interchange is the main southbound stop between the Twin Cities and Des Moines, supporting economy and midscale demand from leisure travelers and truckers.
Developments to watch
| Project | Category | Status | Hotel demand impact |
|---|---|---|---|
| The Oaks Hotel (Clear Lake) | Hotel | Final planning | Very high: adds 45 boutique rooms and reshapes the leisure mix |
| Surf Ballroom Music Experience Center / Surf District ($35.2M) | Tourism | Under construction | Very high: broad lift to event and leisure demand |
| Home2 Suites by Hilton (Mason City) | Hotel | Under construction | High: 88 keys of potential corridor competition |
| MercyOne North Iowa Cancer Center remodel | Healthcare | Under construction | Medium: clinical demand from families and clinicians |
| Clear Lake Chamber & Welcome Center | Tourism | Under construction | Low: supports gateway visitor flow |
Performance
Figures are from CoStar's May 2026 release: 11 hotels and 510 inventory rooms, measured on a 535-room analytic pool. With so few reporting hotels, monthly figures swing more than in larger markets, so the trailing 12 months are the most reliable read.
| Measure | 3 months | Year to date | 12 months | Prior 12 months |
|---|---|---|---|---|
| Occupancy | 38.5% | 38.5% | 51.9% | 51.6% |
| ADR | $92.62 | $92.62 | $97.00 | $95.35 |
| RevPAR | $35.63 | $35.63 | $50.36 | $49.13 |
| Measure | 10-year typical range | 10-year average | 10-year extreme range | Today |
|---|---|---|---|---|
| Occupancy | 49.4% to 56.8% | 53.1% | 41.5% to 59.0% | 51.9%, within the typical range, slightly below the average |
| ADR | $76.98 to $92.90 | $84.94 | $73.49 to $97.00 | $97.00, the 10-year extreme high and the strongest ADR on record |
| RevPAR | $39.52 to $50.80 | $45.16 | $30.53 to $54.39 | $50.36, the upper end of the typical range |
| Market sale price per room | $46K to $60.5K | $61K vs. $60.4K prior, at the extreme high |
The 12-month trend
Every point is a 12-month trailing value. 2025 and 2026 are CoStar's figures; earlier years are values read from the chart in the report.
Source: CoStar, May 2026
| Occupancy | ADR | RevPAR | |
|---|---|---|---|
| 2016 | 55.0% | $73.50 | $40.40 |
| 2017 | 56.5% | $75.50 | $42.60 |
| 2018 | 58.0% | $78.50 | $45.50 |
| 2019 | 59.0% | $82.00 | $48.40 |
| 2020 | 41.5% | $78.00 | $32.40 |
| 2021 | 50.0% | $84.00 | $42.00 |
| 2022 | 53.5% | $89.00 | $47.60 |
| 2023 | 54.5% | $92.50 | $50.40 |
| 2024 | 53.0% | $94.00 | $49.80 |
| 2025 | 51.6% | $95.35 | $49.13 |
| 2026 | 51.9% | $97.00 | $50.36 |
Seasonality
Seasonality is the defining feature of this market. First-quarter occupancy runs from the low to high 30s, climbs steeply through May and peaks above 70% from June through August, when rates compress. The 2026 year-to-date figures cover only January and February, the seasonal low, and are not a reset; the 12-month occupancy of 51.9% is still the best current view.
Against peer markets
Clear Lake is compared with Mason City, its corridor partner 5 miles east, and Albert Lea, MN, about 75 miles north on I-35 with a similar mix of lake leisure and interstate traffic. Mason City's ADR is far higher ($117 vs. $97 in Clear Lake and $98 in Albert Lea), reflecting more upper midscale and Hilton and Marriott select-service hotels plus stronger weekday corporate demand from MercyOne and manufacturing. Clear Lake beats Albert Lea on occupancy by about +460 bps at a similar ADR, thanks to its tourism pull. Both peers point to upside if Clear Lake's supply mix moves upmarket, which is what the Oaks Hotel is positioned to do.
| Market | Inventory | Occupancy, 12 months | ADR, 12 months | RevPAR, 12 months |
|---|---|---|---|---|
| Clear Lake, IA | 510 rooms (11 hotels) | 51.9% | $97.00 | $50.36 |
| Mason City, IA | 519 rooms (12 hotels) | 55.3% | $117.13 | $64.73 |
| Albert Lea, MN | 668 rooms (12 hotels) | 47.3% | $98.22 | $46.44 |
Ask for a market report on Mason City, Albert Lea or your own market.
Brands in the market
CoStar tracks 10 operating hotels in Clear Lake (plus 1 demolished), the whole market whether or not they report to STR. The mix leans to midscale and economy, with one upper midscale Marriott select-service flag and a meaningful independent segment of lakefront inns and motor lodges.
| Hotel | Parent | Segment | Rooms | Notes |
|---|---|---|---|---|
| Fairfield Inn & Suites Clear Lake | Marriott | Upper Midscale | 84 | Newest flag (2022); 5,400 sq ft of meeting space |
| Best Western Holiday Lodge | BWH (Best Western) | Midscale | 136 | Largest hotel; full food and beverage; managed by Kinseth |
| AmericInn by Wyndham Clear Lake | Wyndham | Midscale | 48 | At the I-35 interchange |
| Super 8 by Wyndham Clear Lake | Wyndham | Economy | 59 | Built 1977 |
| Microtel Inn & Suites by Wyndham | Wyndham | Economy | 48 | Built 1999; sold August 2025 |
| Americas Best Value Inn Clear Lake | Sonesta | Economy | 60 | Built 1979 |
| Lake Country Inn | Independent | Independent | 25 | On the US-18 corridor |
| Lighthouse Court | Independent | Independent / boutique | 17 | Lakefront on N. Shore Dr.; sold 2025 |
| South Shore Inn | Independent | Independent | 16 | Lakefront on S. Shore Dr.; on-site restaurant |
| Rumorz Neighborhood Hideaway | Independent | Independent | 17 | Lakefront; sold March 2026 |
| Total (existing) | 510 | 10 hotels |
Wyndham has the most hotels, three (Super 8, Microtel and AmericInn). Independents account for four, mostly small owner-operated lakefront inns. Marriott, BWH and Sonesta each have one flag. Hilton, IHG, Choice and Hyatt have nothing in Clear Lake.
Brands not in the market
The small inventory leaves several major parents and many brands absent. The clearest white space is extended stay, upper midscale Hilton product and boutique leisure, the last of which the Oaks Hotel is positioned to fill.
| Parent | Notable brands not present | Best fit for Clear Lake | Rationale |
|---|---|---|---|
| Hilton | Hampton, Home2, Tru, Tapestry | Home2 Suites or Hampton | Hilton has no hotel in Clear Lake. A Home2 lands in Mason City in 2026, but the corridor has room for one in Clear Lake too |
| IHG | Holiday Inn Express, Candlewood, Staybridge, Hotel Indigo | Holiday Inn Express | No IHG product in the market; a Holiday Inn Express would fit the I-35 interchange |
| Choice | Comfort Inn & Suites, Sleep Inn, MainStay | Comfort Inn & Suites | No Choice inventory; there is a midscale gap between the Best Western and the economy tier |
| Hyatt | Hyatt Place, Hyatt House | Hyatt Place | Unlikely at this size, but a Hyatt Place would suit the Surf District repositioning |
| Radisson / Country Inn | Country Inn & Suites, Radisson | Country Inn & Suites | A natural fit; the brand is well positioned for Upper Midwest leisure markets |
| Parent | Brands present | Notable brands absent | Notes |
|---|---|---|---|
| Marriott | Fairfield Inn & Suites | Courtyard, TownePlace, SpringHill, Residence Inn, Tribute, Autograph | No extended stay (TownePlace or Residence Inn), a clear gap for clinician travel |
| Wyndham | Super 8, Microtel, AmericInn | La Quinta, Wingate, Hawthorn, Trademark | Heavily weighted to economy; no upscale Wyndham product |
| BWH | Best Western (Holiday Lodge) | Best Western Plus, Premier, Vib, Aiden, SureStay | No upper-tier BWH product despite the Holiday Lodge's strong local position |
Risks
Seasonality
Clear Lake is one of Iowa's most summer-weighted small markets. The 12-month occupancy of 51.9% hides a sharp June-August peak (likely 70% to 78%) and a winter low that can dip to 30% or below. Hotels without strong group, event or healthcare strategies face swings from quarter to quarter, and any hit to the summer season (weather, lake water quality, fuel prices for drive-in guests) cuts annual revenue meaningfully.
Small-market volatility
With 11 hotels and a 535-room analytic pool, one hotel moves the whole market. A single renovation, rebrand or sale can swing reported occupancy or ADR by 100 to 300 basis points, so buyers underwriting on CoStar data should allow for sample-size noise.
Demographics and wages
Clear Lake's population slipped from 7,666 (2020) to about 7,600 (2026 estimate). A median age of 49.2, about 10% above the county's, reflects retirees and lake residents: good for steady leisure spending, but a limit on workforce supply. The corridor's labor market is tight, and wage pressure is a persistent drag on margins.
Competition from Mason City
The 88-room Home2 Suites opening in downtown Mason City in late 2026 adds a Hilton extended-stay option 5 miles east. It will likely take some of the weekday corporate and healthcare overflow that now goes to Clear Lake's select-service hotels, with the Fairfield Inn & Suites most exposed.
Aging economy hotels
Three economy hotels (Super 8, built 1977; Microtel, 1999; Americas Best Value Inn, 1979) are at or past typical PIP cycles. If owners will not fund renovations, the result could be lost flags or a slide into de facto independent operation.
Concentrated demand
Leisure and the Surf Ballroom account for an outsized share of demand. The $35.2M Surf District investment is positive, but the market is exposed to cuts in state tourism marketing or a shift in regional drive-market habits.
| Risk | Severity | Likelihood | Horizon |
|---|---|---|---|
| Seasonality | High | Certain | Ongoing |
| Small-market metric volatility | Medium | Certain | Ongoing |
| Demographic drift and wage pressure | Medium | High | 3 to 7 years |
| Corridor competition (Home2 Mason City) | Medium | Certain | Late 2026 onward |
| Aging economy inventory | Medium | High | 2 to 5 years |
| Surf District and leisure dependence | Medium | Medium | Ongoing |
Outlook
The next 12 to 18 months
The near-term outlook is constructive. ADR is at a 10-year high and still gaining (+1.8% year over year), and occupancy is steady at the middle of its typical range. The Surf Ballroom Music Experience Center and the Not Fade Away museum open in stages through 2026 and 2027, adding event programming and shoulder-season weekend demand. The Home2 Suites in Mason City adds corridor supply but is unlikely to weigh much on Clear Lake, given its leisure focus.
Two to five years
The Oaks Hotel's 2027 opening will move Clear Lake's supply upmarket, anchor a boutique and lifestyle segment and lift market ADR. The Surf District investment plus steady Iowa drive tourism supports a base case of moderate demand growth, with low single-digit annual RevPAR gains. Long-term ADR upside depends on holding rate discipline as new product opens.
| Scenario | Occupancy | ADR | RevPAR | Key assumption |
|---|---|---|---|---|
| Upside | 55% to 57% | $102 to $106 | $56 to $60 | Surf District programming drives 5% to 7% leisure demand growth; the Oaks ramps up strongly after 2027 |
| Base | 52% to 54% | $99 to $101 | $52 to $55 | Status quo demand growth; modest ADR gains continue |
| Downside | 48% to 50% | $94 to $97 | $46 to $49 | A soft leisure season; corridor demand shifts to new Mason City supply; aging economy hotels underperform |
Opportunities
- Repositioning aging economy hotels. The Super 8 (1977), Americas Best Value Inn (1979) and AmericInn (1995) are candidates for renovation or conversion as the market moves upmarket after the Oaks Hotel and the Surf District.
- Extended-stay white space. Clear Lake has no TownePlace, Residence Inn or Home2. With clinician travel and project-based corporate demand, a 60 to 80 key extended-stay hotel would fill a clear gap.
- Buying lakefront independents. Several small lakefront independents (Lighthouse Court, South Shore Inn, Rumorz, Lake Country Inn) have sold in the past 24 months at relatively modest values. A boutique roll-up tied to the Surf District revival could appeal to a small-format operator.
- Capturing groups and meetings. Only two hotels have meaningful meeting space: the Best Western Holiday Lodge (6,945 sq ft) and the Fairfield (5,400 sq ft). More small-group space could win corporate retreats and wedding blocks that now go to Mason City or Okoboji.
Download the underwriting model to test a conversion, an extended-stay build or a lakefront acquisition.
Key takeaways
- A stable market at a 10-year ADR high. Occupancy 51.9%, ADR $97.00 and RevPAR $50.36 are all up year over year. ADR is at its 10-year extreme high and RevPAR at the upper end of its typical range. Growth is rate-driven; more occupancy needs better product.
- A light but meaningful pipeline. Nothing is under construction, but the 45-key Oaks Hotel, in final planning for late 2027, would move the mix upmarket. At just under 9% of existing rooms, it is well within what the market can absorb.
- The Surf District is the catalyst. $35.2M of investment, including the Music Experience Center and the Not Fade Away museum, should expand event-driven leisure demand from 2026 on, the biggest medium-term tailwind.
- Franchise gaps open room to build and buy. There is no Hilton, IHG, Choice or Hyatt product, no extended stay, no Courtyard or Residence Inn and no upscale Wyndham flag, so both new development and conversions of aging economy hotels have room.
- Mason City matters. The 88-room Home2 Suites opening in late 2026 will compete for weekday corporate and healthcare overflow, most directly with the Fairfield. For capital planning, treat the corridor as one market.
Own a hotel in Clear Lake or North Iowa? Request a hotel valuation to see what it would sell for, or ask for a market report on your own market.
Sources and method. Occupancy, ADR, RevPAR, pipeline and inventory are from CoStar (May 2026 release); the hotel inventory is from a CoStar export. Demand drivers and development details were checked against the North Iowa Corridor EDC, the Clear Lake Area Chamber of Commerce, the Globe Gazette, KIMT and North Iowa Now. Population and demographics are from the U.S. Census Bureau and World Population Review. The demand composition and scenario ranges are internal estimates; review them against your own underwriting assumptions.
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.