September showed occupancy in the Houston market down 10%, ending the month at 55.6%. ADR dropped almost 5 points to $118, while RevPAR, or revenue per available room, showed an almost 15% decline to $65. Demand and revenue dropped 11% and 15% in September, respectively.
Year to date, occupancy in the region is almost 60%, down 9.5% compared to the same time last year. ADR is flat at $121, while RevPAR showed a 10% dip at $73. Revenue year to date is down 10% compared to the same time period last year.
September Submarket Comparison:
- In the CBD/Downtown submarket, demand showed a 2.4% gain, however a comparable lift in overall supply Downtown produced occupancy flat over last year to 61.5%. ADR dipped 3% to $222, while RevPAR and revenue dropped 3.2% and 0.8%, respectively.
- Occupancy in the Uptown/Greenway Plaza submarket ended the month at 61.2%, up 2.9%. ADR dipped 6 points to $164, while RevPAR showed a 3-point decline at $100.
- The Medical Center/NRG submarket showed occupancy at 56%, down 6.2% and ADR at $139, down 2.2%. RevPAR showed an 8% drop to $78, while demand and revenue declined 8% and 10%, respectively.
- Houston Northwest ended the month at $80 in rate, down 9%. Occupancy dipped almost 8% to 55.8%, while RevPAR dropped 16% to $45. Demand is down about 8%, while revenue has shown a 16-point decline for the month.
- In the George Bush Airport submarket, occupancy is down about 11% to 56%, while ADR has shown an 8% decline to $86. Demand is down in the submarket by 11%, while RevPAR and revenue have both decreased 19%.
Behind the Numbers
Hotels that range from about 300-500 total rooms saw a slight lift in demand, gaining 1.2% compared to last year, supporting comparable gains in occupancy. However, declining rates offset demand gains, causing drops in RevPAR and revenue.
Though luxury and upper upscale chain scale hotels were trending upward last month, both chain scales showed declining KPIs in September. Drops in these segments, however, were not as significant as other chain scales, with economy class hotels showing stark declines in demand and revenue.
What’s Driving the Market
Overall demand for September was down compared to last year, however, the market showed less year-over-year declines in demand than in previous months, indicating a normalization towards typical trend lines. In Downtown, conferences like the National Black MBA Association, which supported over 70% occupancy on peak, paired with major events like the Savanah Bananas baseball game at Daikin Park helped to drive compression into other major submarkets like Uptown/Greenway Plaza.
Written by Megan Henson
