Occupancy at Houston hotels ended August at 56%, down 23% compared to the same time last year. ADR was down 8.2% to $113, while RevPAR showed an almost 30% decline at $63. Declines were due to a 23.4% dip in demand, which prompted a 30% loss in revenue for the month.
Year to date, occupancy is down 9.3% to 60.4%, while ADR is maintaining a marginal 0.4% gain at $122. Rate gains, however, have not offset the 10% dip in demand, producing RevPAR at $74, down 9% and revenue down 9.4%. August marks the last month significantly impacted by weather-related demand, which affected outer Loop submarkets, most significantly. Though forecasts anticipate year-over-year declines for the hotel market in 2025, a strong conference schedule in Q4 should help to narrow the gap by the end of the year.
August Submarket Comparison:
- In the CBD/Downtown submarket, occupancy dropped almost 15% to 51.8% and RevPAR dipped 13% to $100. Though ADR gained 2.1% to $192, a 13% decrease in demand produced an 11% decrease in revenue.
- Occupancy in the Uptown/Greenway Plaza submarket lost 2.3% over 2024 to 58%, while rate dipped 2.5% to $153. RevPAR ended the month at $89, down 5%, while demand and revenue declined 8% and 11%, respectively.
- The Medical Center/NRG submarket showed occupancy at 56%, down 15% YOY. RevPAR ended the month at $76, down 17%, while rate lost 2.5% YOY at $135. Losses are due to a 16% dip in demand, causing revenue declines of 18% compared with last year.
- Houston East/Baytown, which benefited greatly last year from weather demand, is showing sharp declines in 2025. Occupancy ended the month at 51.4%, down 35% YOY. RevPAR dipped 50%, while ADR showed a 24% decline to $83. Demand and revenue dropped 36% and 51%, respectively.
- In the Houston North/Woodlands submarket, occupancy ended the month at 55%, down 2%, while ADR dipped to $115, down 11%. RevPAR showed a 35% decrease to $63, while demand and revenue lost 27% and 34%, respectively.
Behind the Numbers
In contrast to the other class scales, luxury class hotels showed marginal gains across all key performance indicators in August. Though upper-scale hotels showed gains in rate, a trend we have seen throughout 2025, a decline in demand offset the potential for revenue growth. Economy and midscale class hotels were hit the hardest in August, showing YOY losses between 30-60% across KPIs.
What’s Driving the Market
August comparisons are still largely affected by last year’s Hurricane Beryl demand; however, the market should see some stabilization to typical trend lines as Houston moves into Q4. The impact is especially stark in the outer Loop submarkets, like Baytown, the George Bush Airport and the Woodlands, where a larger majority of out-of-market contractors stayed. Additionally, the current economic climate has prompted belt tightening for budget friendly travelers and caused more significant declines in economy scale properties. Luxury travelers seem to be less affected by these conditions and have maintained gains in 2025, though this growth is marginal to flat.
While 2025 shows a significant year-over-year loss across KPIs when compared to 2024, it’s helpful to note that 2024 was a record year due to atypical circumstances, including weather and major events. It was unlikely that these conditions would be replicable in 2025, and market watchers expected to see YOY declines. However, this year’s KPIs are more closely aligned to historical trends for the Houston market, displaying a stabilized trend line.
Written by Megan Henson
Pictured: Post Oak Hotel, Uptown
