Research Market report
Fargo, ND hotel market report, Q2 2026
- Fargo
- West Fargo
- Moorhead
- Cass County
Rate at a decade high, fewer rooms filled: 57.6% occupancy (-4.8%), $118.70 ADR (+0.7%), $68.34 RevPAR (-4.1%), nothing under construction.
Fargo's hotels are charging more than at any point in the last ten years, but filling fewer rooms. Over the twelve months to June 2026 the market ran 57.6% occupancy, a $118.70 ADR and $68.34 RevPAR. Rate held at +0.7%, occupancy gave back -4.8% and RevPAR fell -4.1%. With nothing under construction, the pressure is on volume, not price.
Boundaries, roads and water: U.S. Census Bureau (TIGER/Line).
Executive summary
Occupancy, 12 months
57.6%
-4.8% YoY
ADR, 12 months
$118.70
+0.7% YoY
RevPAR, 12 months
$68.34
-4.1% YoY
Sale price per room
$97,100
+13.0% YoY
Fargo anchors the largest metro area in North Dakota and the wider Red River Valley, with an economy spread across healthcare, agriculture-linked manufacturing, higher education, technology and regional retail. CoStar tracks 50 hotels with 4,720 rooms in the market. Its performance figures are calculated on an analytic pool of 4,956 reporting rooms.
ADR has held near its ten-year high and now sits above CoStar's typical ten-year range, while occupancy slipped. The softening reflects a return to more normal demand after several strong years, modest new supply (135 rooms delivered over the trailing year) and the strong seasonality of a northern-tier market, where the winter months weigh on annual averages. Pricing power is intact; the pressure is on volume.
Investment fundamentals are firming. The market sale price per room rose +13.0% to $97,100, on eight sales totaling $16.4 million over the past year, and the market cap rate compressed modestly to 11.7%. With no rooms under construction and a contained pipeline, Fargo enters the second half of 2026 with supply in check and demand catalysts in healthcare, a planned downtown convention center and steady university and event activity.
| Existing hotels | 50 |
|---|---|
| Inventory rooms | 4,720 |
| Analytic (reporting) rooms | 4,956 |
| Rooms under construction | 0 |
| Rooms delivered, last 12 months | 135 |
| Market cap rate | 11.7% |
| Market sale price per room | $97,100 (+13.0% YoY) |
| Sales volume, last 12 months | $16.4M across 8 sales |
The market
Fargo is the county seat of Cass County and the principal city of the Fargo-Moorhead-West Fargo metro, which spans Cass County, North Dakota and Clay County, Minnesota. The metro is home to about 250,000 people; the contiguous urban area of Fargo, West Fargo and Moorhead holds about 216,000. It is North Dakota's largest population and commercial center and the regional hub for retail, healthcare and professional services across eastern North Dakota and northwestern Minnesota. It sits where Interstate 94 meets Interstate 29, about 240 miles northwest of Minneapolis-St. Paul.
The economy is unusually diversified for a market this size, which protects it from the single-industry swings some western North Dakota markets live with. Healthcare is the largest pillar: Sanford Health and Essentia Health both run major hospital and clinic campuses that generate steady medical travel and traveling-clinician demand, and many of the market's select-service hotels carry a Medical Center location name. Agriculture-linked manufacturing (Doosan Bobcat, Marvin and CNH/Case IH operations in the region), technology (Microsoft runs one of its largest U.S. campuses here), financial services (Blue Cross Blue Shield of North Dakota) and higher education round out the base.
Median household incomes run near or slightly above the national average, with a low cost of living and persistently low unemployment that keeps the labor market tight. The metro has grown steadily over the past decade, fed by in-migration tied to NDSU, the health systems and a broad employer base. Large civic projects are underway, including the multi-billion-dollar FM Area Diversion flood-control project and the $700M-plus Red River Valley Water Supply Project, both of which reduce the risk on long-term development.
| Metric | Value | Notes |
|---|---|---|
| Metro population | ~250,000 | Fargo-Moorhead-West Fargo metro (ND and MN) |
| Core urban area | ~216,000 | Fargo, West Fargo and Moorhead, contiguous |
| City of Fargo population | ~133,000 | Largest city |
| Primary industries | Healthcare, manufacturing, technology, education | A diversified base |
| Major interstates | I-94 and I-29 | East-west and north-south corridors |
| Distance to Minneapolis | ~240 miles | Nearest major metro |
| NDSU enrollment | 11,952 | Fall 2025 |
New supply
Fargo's pipeline is contained, and most of it is still in planning rather than under construction. That discipline is a real positive for existing owners and for underwriting, especially with occupancy softening. Several older or functionally obsolete hotels have also left the market through demolition, partly offsetting new deliveries.
Under construction
No hotels are under construction. CoStar reports 0 rooms under construction as of June 2026, down from 135 rooms a year earlier, after one hotel delivered over the trailing twelve months.
Proposed and in planning
Three branded select-service projects are in CoStar's planning pipeline, alongside a larger downtown convention-center hotel that has advanced through municipal planning.
| Project | Brand / parent | Rooms | Stage | Notes |
|---|---|---|---|---|
| Holiday Inn Fargo | Holiday Inn (IHG) | 125 | Final planning | Upper midscale full-service replacement or addition |
| TownePlace Suites Fargo | TownePlace Suites (Marriott) | 102 | Final planning | Extended-stay upper midscale |
| Atwell Suites Fargo | Atwell Suites (IHG) | 104 | Proposed | Upper midscale all-suite concept |
| Fargo Convention Center Hotel | To be decided / City of Fargo | ~160 | Proposed | Paired with a new downtown convention center; construction targeted for summer 2026, opening about 2028 |
Beyond these, EPIC Companies has proposed a hotel in The Lights on Sheyenne entertainment district in West Fargo, paired with a parking ramp and a hockey and event arena. A previously announced waterpark hotel at the EOLA development is classified as abandoned by CoStar and is not counted in the active pipeline.
| Under construction | 0 rooms |
|---|---|
| Final planning | 227 rooms (2 projects) |
| Proposed | 264 rooms (2 projects) |
| CoStar-tracked pipeline (3 select-service projects) | 331 rooms, about 7.0% of existing inventory |
| Including the proposed convention-center hotel | About 491 rooms, about 10.4% of inventory, on multi-year and uncertain timelines |
Demand drivers
Fargo's hotel demand is unusually well balanced for a tertiary market. It draws from healthcare, corporate travel, events and college sports, leisure, higher education and government, and no one segment is large enough to be a concentration risk. That balance has historically supported steady midweek and weekend demand alike.
Healthcare and medical
Healthcare is the single largest demand generator. Sanford Health, the largest employer in the Dakotas, runs a major medical campus in Fargo, and Essentia Health has a large hospital and clinic presence. Together they draw patients, families, traveling nurses and visiting physicians from across the region. The cluster of Medical Center select-service hotels is direct evidence of this demand, much of it steady, year-round and rate-tolerant.
Corporate and business
The metro hosts one of Microsoft's largest U.S. campuses, Doosan Bobcat's manufacturing and engineering operations, Marvin, Blue Cross Blue Shield of North Dakota and a deep bench of regional firms in agriculture technology, finance and logistics. That base supports steady individual business travel and project-based extended-stay demand, which shows in the market's several extended-stay flags.
Events and college sports
The FARGODOME, the largest event venue between Minneapolis and Seattle, seats up to 21,500 and has more than 115,000 square feet of exhibit space. It is home to NDSU Bison football, an FCS national powerhouse whose deep playoff runs reliably fill hotels on fall and winter weekends, and it hosts concerts, trade shows and tournaments year-round. Scheels Arena and other venues add to the calendar.
Leisure and tourism
Fargo-Moorhead markets itself on more than 300 restaurants, a revitalized downtown, the Red River Zoo, the Plains Art Museum and a busy festival calendar. New attractions, including a large indoor action park, keep widening the weekend draw. Pass-through traffic on I-94 and I-29 adds to it.
Higher education
NDSU enrolled 11,952 students in fall 2025, its first overall increase in several years, and Concordia College and Minnesota State University Moorhead sit across the river. Move-in, graduation, parents' weekends and recruiting visits create predictable seasonal peaks.
Known developments
| Project | Category | Status | Hotel demand impact |
|---|---|---|---|
| Fargo Convention Center and Hotel | Convention and hospitality | Final planning | Very high |
| The Lights on Sheyenne expansion | Mixed-use and hospitality | Proposed | High |
| Moorhead Center Mall and downtown redevelopment | Mixed-use redevelopment | Under construction | Medium |
| FM Area Diversion Project | Flood-control infrastructure | Under construction | Medium |
| Red River Valley Water Supply Project | Water infrastructure | Under construction | Low |
| Moorhead 11th Street Underpass | Infrastructure | Under construction | Medium |
Performance
Every performance figure here is CoStar's, as of June 2026. The market has 4,720 inventory rooms; CoStar calculates occupancy, ADR and RevPAR on its analytic pool of 4,956 reporting rooms, so market-size figures and performance figures rest on slightly different room counts by design.
| Measure | 3 months | Year to date | 12 months | Prior 12 months |
|---|---|---|---|---|
| Occupancy | 54.6% | 53.5% | 57.6% | 60.5% |
| ADR | $115.31 | $116.09 | $118.70 | $117.95 |
| RevPAR | $62.96 | $62.09 | $68.34 | $71.26 |
Against the last ten years, occupancy is back at its long-run average, while rate, RevPAR and sale prices sit above their usual ranges.
| Measure | Now | Typical 10-year range | 10-year average | Where it sits |
|---|---|---|---|---|
| Occupancy | 57.6% | 51.2% to 63.1% | 57.1% | Within the range, at the long-run average after giving back recent gains |
| ADR | $118.70 | $80.31 to $108.13 | $94.21 | Above the range and at the high end of the extreme range: a ten-year high |
| RevPAR | $68.34 | $42.29 to $66.38 | $54.36 | Above the range, on high rate despite softer occupancy |
| Sale price per room | $97,100 (prior $85,900) | $63.4K to $84.5K | Above the range: investor pricing at a cyclical high |
Each point is a trailing 12-month figure. 2025 and 2026 are CoStar's exact prior and current 12-month figures; earlier years are values read from the chart (pre-2021 values were estimated from CoStar's 10-year ranges).
Source: CoStar, June 2026
| Occupancy | ADR | RevPAR | |
|---|---|---|---|
| 2016 | 58.0% | $80.00 | $46.00 |
| 2017 | 57.0% | $84.00 | $48.00 |
| 2018 | 58.5% | $88.00 | $52.00 |
| 2019 | 59.5% | $92.00 | $55.00 |
| 2020 | 38.1% | $73.00 | $28.00 |
| 2021 | 52.0% | $90.00 | $47.00 |
| 2022 | 60.0% | $104.00 | $62.00 |
| 2023 | 61.5% | $112.00 | $69.00 |
| 2024 | 60.8% | $116.00 | $71.00 |
| 2025 | 60.5% | $117.95 | $71.26 |
| 2026 | 57.6% | $118.70 | $68.34 |
Seasonality defines Fargo's demand curve. As a northern-tier market, occupancy bottoms out in January and February and peaks from June through August on leisure, events and construction-season business travel. That is why the 57.6% trailing twelve-month occupancy is the right measure of the market's real run rate. The 53.5% year-to-date figure covers only the slowest months of the year and should not be read as a structural decline.
Peer markets
On a trailing twelve-month basis Fargo trails both Grand Forks and Sioux Falls on occupancy, and so on RevPAR. Grand Forks runs the highest occupancy (62.0%) at a lower rate, while Sioux Falls leads on both ADR and RevPAR.
| Market | Occupancy, 12 months | ADR, 12 months | RevPAR, 12 months | Hotels |
|---|---|---|---|---|
| Fargo, ND | 57.6% | $118.70 | $68.34 | 50 |
| Grand Forks, ND | 62.0% | $114.04 | $70.72 | 25 |
| Sioux Falls, SD | 59.7% | $124.14 | $74.15 | 65 |
Own a hotel in Fargo or the Red River Valley? Request a hotel valuation, or ask for a market report on your own market.
Brands and franchise parents
This section covers all 50 existing hotels in CoStar's inventory, whether or not each reports to STR. The market is broad and well flagged, from full-service convention hotels to economy and extended-stay product, with a sizable independent segment downtown and among older roadside hotels.
| Hotel (representative) | Parent | Segment | Rooms |
|---|---|---|---|
| Holiday Inn Fargo | IHG | Full service, upper midscale | 308 |
| Delta Hotels Fargo | Marriott | Full service, upscale | 185 |
| Radisson Blu Hotel Fargo | Choice | Full service, upper upscale | 151 |
| Ramada by Wyndham Fargo | Wyndham | Full service, midscale | 172 |
| La Quinta Inn & Suites Fargo | Wyndham | Select service, upper midscale | 156 |
| SpringHill Suites Fargo | Marriott | Select service, upscale | 128 |
| Jasper Hotel (independent) | Independent | Boutique, upscale | 125 |
| Courtyard, Hilton Garden Inn, Four Points | Marriott, Hilton | Select service, upscale | 90 to 110 each |
| Hampton, Home2, Homewood Suites | Hilton | Select service and extended stay | 73 to 107 each |
| Candlewood, Staybridge, MainStay, WoodSpring | IHG, Choice | Extended stay | 66 to 123 each |
| Comfort, Quality, Sleep, Country Inn, Park Inn | Choice | Upper midscale and midscale | 62 to 99 each |
| Days Inn, Baymont, AmericInn, Travelodge | Wyndham | Midscale and economy | 58 to 112 each |
| Econo Lodge, Red Roof, Americas Best Value Inn | Choice, Red Roof, other | Economy | 56 to 64 each |
| ClubHouse, C'mon Inn, Bison Inn, Grand Inn, Scandia | Independent | Independent, midscale | 39 to 113 each |
The full-service tier is led by the 308-room Holiday Inn, the 185-room Delta Hotels by Marriott and the 151-room Radisson Blu downtown. Upper midscale and upscale select-service hotels from Marriott, Hilton and IHG form the deepest tier, many of them clustered near the Sanford and Essentia medical campuses. Extended stay is well represented, and the independent segment is anchored by distinctive downtown hotels such as the Jasper Hotel and the historic Hotel Donaldson.
By hotel count, independents (12) are the largest single group, followed by Wyndham and Choice (9 each), Marriott and IHG (6 each) and Hilton (4). Best Western, Red Roof, My Place and Americas Best Value Inn hold one or two hotels each. The three big U.S. parents (Marriott, Hilton and IHG) control 16 hotels together, weighted toward the higher-rated select-service tiers, while Wyndham and Choice dominate the midscale and economy end.
The brands missing from Fargo
These gaps show where there is room for new development or conversions.
| Parent | Notable absent brands | Best-fit concept for Fargo | Why |
|---|---|---|---|
| Hyatt | Hyatt Place, Hyatt House | Hyatt Place near the medical campus | No Hyatt presence; an upper midscale gap given strong medical demand |
| Marriott | No AC, Moxy or Aloft (Fairfield is the only midscale flag) | AC Hotels or Moxy downtown | A lifestyle and boutique upper upscale gap downtown |
| Hilton | No Tru, Tapestry or Curio | Tru by Hilton | A modern economy-to-midscale gap; Tru fits value-minded demand |
| Choice | No Cambria | Cambria Hotel downtown | An upscale gap for the convention-center submarket |
| Parent | Brands present | Absent sub-brands | Notes |
|---|---|---|---|
| Marriott | Courtyard, Fairfield, Residence Inn, SpringHill, TownePlace, Four Points, Delta | AC, Moxy, Aloft, Element, Autograph | Lifestyle and soft-brand tiers unrepresented |
| Hilton | Hampton, Home2, Homewood, Hilton Garden Inn | Tru, Tapestry, Curio, DoubleTree, Embassy Suites | No upscale full-service Hilton flag in the market |
| IHG | Holiday Inn, Holiday Inn Express, Candlewood, Staybridge | Atwell (proposed), Avid, Hotel Indigo, Crowne Plaza | No lifestyle Indigo downtown |
| Wyndham | Ramada, Days Inn, Baymont, AmericInn, La Quinta, Travelodge, Wingate | Microtel, Hawthorn, Trademark | Little new-build economy under Wyndham |
Risks and headwinds
Occupancy softening
The clearest near-term headwind is the -4.8% drop in trailing occupancy and the -4.1% RevPAR decline that came with it. With ADR already at a ten-year high and above its typical range, the market has little room to make up lost volume with more rate. If occupancy keeps eroding, RevPAR will slip even if rate holds.
Seasonality and weather
Fargo's extreme seasonality concentrates profit in about five months of the year. Severe winter weather can disrupt travel, events and construction-season demand, and a single harsh stretch can move a quarter's results. That volatility raises the cost of capital buyers apply to the market.
A rate ceiling
With ADR at the top of its ten-year band, the market may be nearing a practical rate ceiling for a value-oriented, drive-to demand base. Corporate and government per-diem limits and price-sensitive leisure travelers could cap further ADR gains, especially if the national economy softens.
Pipeline and the convention-center hotel
The pipeline is contained, but the planned downtown convention-center hotel (about 160 rooms) plus three select-service projects could add roughly 7% to 10% to inventory if all go ahead. Deliveries bunched into a short window would pressure occupancy and rate, especially in the medical and downtown submarkets, where new hotels are most likely.
Reliance on healthcare
Healthcare's large role is a strength and a dependency. Any consolidation, service-line move or capital pullback at Sanford or Essentia would ripple through the medical-oriented select-service cluster that makes up a large share of the inventory.
| Risk | Severity | Likelihood | Time horizon |
|---|---|---|---|
| Occupancy softening | Medium-high | High | Near term |
| Seasonality and weather | Medium | High | Recurring |
| Rate ceiling and affordability | Medium | Medium | Near to medium term |
| Pipeline and convention-center supply | Medium | Medium | Medium term |
| Healthcare concentration | High | Low | Long term |
Outlook
The next 6 to 12 months
Expect ADR to hold near its current ten-year high with low single-digit movement, while occupancy settles around its ten-year average in the high 50s as the market laps its recent step down. RevPAR should find a floor near current levels, with normal seasonal strength returning through the summer. With nothing under construction, no supply shock is likely in this window, which supports rate discipline.
One to three years
The downtown convention center and its hotel are the swing factor. If delivered, they should grow group and event demand and lift the downtown submarket, but the added rooms will need to be absorbed. Continued health-system investment, a stable NDSU and steady in-migration support a constructive demand picture. Investor pricing above $97,000 a room with a compressing cap rate signals confidence, and eight sales over the trailing year point to a liquid, working sales market.
| Scenario | Occupancy, 12 months | ADR, 12 months | RevPAR, 12 months | Key assumption |
|---|---|---|---|---|
| Base | 57% to 58% | $119 to $121 | $68 to $70 | Occupancy settles at its 10-year average; rate holds high |
| Upside | 59% to 61% | $122 to $125 | $72 to $76 | Event and medical demand rebound; no new supply delivers |
| Downside | 54% to 56% | $116 to $118 | $63 to $66 | A weak winter and a national slowdown; per-diem pressure on rate |
Opportunities
First, the disciplined supply and ten-year-high rate make stabilized, well-located select-service hotels attractive to owners who want durable cash flow. Second, the franchise gaps (a Hyatt Place, an upscale Cambria, a Tru and a downtown lifestyle flag such as AC, Moxy or Indigo) are room for conversions and new development, especially near the medical campuses and the coming convention-center district. Third, rising prices per room with a still-high 11.7% cap rate offer a high going-in yield compared with coastal and primary markets, for buyers comfortable with the seasonality.
Thinking about buying or selling in Fargo? Download the underwriting model to run the numbers, or request a hotel valuation.
Key takeaways
- Rate strength, volume softness. Fargo holds a ten-year-high ADR of $118.70, above its typical ten-year range, while trailing occupancy slipped to 57.6% and RevPAR eased -4.1%. Pricing power is intact; the challenge is filling rooms, not pricing them.
- Supply discipline is a tailwind. With no rooms under construction and a pipeline of planning-stage select-service projects, existing owners face little new competition in the near term, a real positive for underwriting through 2027.
- Diversified, healthcare-led demand. Demand spread across healthcare, corporate, events and sports, leisure, education and government protects Fargo from single-industry shocks, with Sanford and Essentia anchoring steady, year-round medical travel.
- Strong and improving investment metrics. Sale price per room rose +13.0% to $97,100 with a compressing 11.7% cap rate and eight sales over the trailing year: investor confidence and a liquid market at a relatively high going-in yield.
- The convention center is the swing factor. The proposed downtown convention center and its roughly 160-room hotel could reshape group demand and the downtown submarket over the next several years, and they are the main medium-term supply risk to watch.
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Sources and method. Occupancy, ADR, RevPAR, inventory, pipeline, cap rate and sale price per room are from CoStar market reports as of June 2026, calculated on CoStar's analytic pool of reporting hotels. The hotel list and franchise breakdown come from CoStar's full property inventory. The peer comparison uses CoStar trailing twelve-month data for Grand Forks and Sioux Falls. Market, employer, demand-driver and development information is compiled from public sources, including GFMEDC, the City of Fargo, NDSU and regional news media. Trend values before 2021 are estimated from CoStar's ten-year ranges, and the segment demand shares are analytical estimates. Prepared by Reed Gizinski, Hotel Data Tracking, Marcus & Millichap.
This report is for information only. It is not an appraisal or a valuation and is not investment advice. Figures come from third-party sources believed reliable but not independently verified.