Houston’s hotel market saw an upswing in February, gaining 6.8% YOY in rate to reach $127. Occupancy showed a slight increase, gaining 0.3% to 62.2%, while RevPAR increased 7.1% to $79, and revenue rose 6.9%.
Year to date, the market is still working to fully recover from a slower January, but seeing progress, gaining almost 1 point in RevPAR to $70 and 2.5% in ADR to $121. Occupancy remains down 1.6% at 57.5%, in part due to a decline in demand of 1.7% year over year.
February Submarket Comparison:
- The Uptown/Greenway Plaza submarket saw a 3.8% gain in occupancy to reach 67.4% and a 2.4% increase in rate to $186. RevPAR increased 6.3% to $125, while revenue showed a 1.3% gain.
- The CBD/Downtown submarket gained 5.1% in occupancy to 66.9% and 7.6% in rate to reach $253. RevPAR showed a 13.1% gain at $169, while demand and revenue increased 5.9% and 14%, respectively.
- The Medical Center/NRG submarket gained 1.9% in occupancy at 65.2% and almost 1% in ADR to reach $156. RevPAR showed a 2.7% lift at $102, while demand and revenue gained 1.1% and 1.9%, respectively.
- The Houston North/Woodlands submarket gained 2.9% in occupancy to 62.6% and 7.4% in rate to $127. RevPAR increased 10.6% to $79, while revenue increased 12.9%.
- In the Houston Northwest submarket, occupancy gained 1.7% to reach 61.4% and 6.5% in rate to reach $85. RevPAR increased 8.3%, while revenue gained 2.9%.
In the Numbers
In February, larger hotels outperformed small and boutique hotel types, with the largest growth seen across hotels with 300-500 rooms. Occupancy for this hotel group sat at 63.8%, up 7.2%, while RevPAR for this segment gained 11.2% at $119. Luxury class hotels also displayed impressive growth, gaining 12.1% in occupancy to 67.7%. Rates in the luxury category remained consistent with a 1-point YOY gain at $322, but RevPAR and revenue gained an impressive 13.2% and 15.2%, in part due to the 14.1% lift in demand.
What’s Driving the Market
The end of February kicked off rodeo season, with events like the Houston Livestock Show and Rodeo’s Best Bites and World Championship BBQ Contest driving demand in the Medical Center/NRG submarket. Major conferences held at the George R. Brown Convention Center also drove demand downtown and compressed into outlying markets, including the American Physical Therapy Association conference, which produced a 20.5% YOY gain in ADR and a 27.6% lift in RevPAR in early February. Other major events, like Monster Jam, held at NRG at the beginning of February supported an anticipated attendance of over 50,000.
Written by Megan Henson
Pictured: The Post Oak Hotel, Uptown
