Hotel performance continues to strengthen in 2026 as February showed growth across major key performance indicators. Occupancy in the market overall ended the month at 64%, up 3% from last year, while ADR rose 4% to $132. RevPAR showed solid improvement, gaining 7-points YOY to $85, while demand and revenue increased 3.5% and 8%, respectively.
Year to date, the market sits at 59% in occupancy, thanks to a 2% lift in demand. ADR has gained 2.3% to $124, supporting RevPAR gains of 4% and revenue increases of 5%.
February Submarket Comparison:
- Downtown/CBD ended the month at almost 70% in occupancy, up 4% and $266 in ADR, up 5%. RevPAR landed at $185, up almost 10%, while demand and revenue grew by 7% and 12%, respectively.
- The Uptown/Greenway Plaza submarket also showed strong growth with ADR gaining 6 points to $200. Occupancy landed at 69%, up 1.5%, while RevPAR increased 8% to $138. Demand increased 1.5% while revenue gained 8% YOY.
- The Medical Center/NRG submarket showed a 1% increase in demand, but a 2.6% increase in occupancy due to a slight dip in supply. ADR gained an impressive 7% to $169, with RevPAR increasing almost 10% to $112.
- Occupancy in the Houston Southwest Freeway submarket grew by 2.5% to 61%, while RevPAR increased by 7-points YOY. ADR showed a 4% lift to $87 as revenue gained 5.3%.
- The Houston East/Baytown submarket gained 8% in revenue compared to the same period last year, due to a 5% increase in ADR at $89. Demand increased by 3%, however, supply in the market increased by over 1%, creating a 2% overall gain in occupancy to 59%.
Behind the Numbers
In 2025, the market was showing fragmentation, with luxury and upper upscale properties showing the most consistent gains, while economy scale properties showed declines. This year, Houston is seeing more balance with February KPIs across hotel scales indicated flat to marginal growth. By revenue, upper upscale and luxury sector hotels continue to drive gains, especially as average daily rates (ADRs) continue to climb. However, the strongest increase in YOY demand is in economy-scale hotels, gaining 6% in overall demand over last year.
Weekend occupancy for the market was especially strong, averaging 71% in Houston overall, a 10% YOY gain. Weekend demand also drove stronger rates, reaching $132, up 10% over last year and supporting a 21% YOY increase in weekend RevPAR.
What’s Driving the Market
February was supported by strong group demand that compressed throughout the major submarkets. NAPE, an energy conference held at the George R. Brown (GRB) Convention Center in mid-February, prompted strong demand and gains throughout the CBD, Uptown and the Medical Center. Additionally, the GRB hosted the National Cheer Association All Star National Championships at the end of the month, which drove impressive demand throughout the city, with occupancy reaching over 75% across major submarkets during the competition.
Written by Megan Henson
