Hotel Occupancy Finished 2025 at 59%

December showed Houston hotel occupancy down about 3% over December 2024 to 50%. ADR slipped slightly to $108, while RevPAR ended the month at $54, down 5%. Demand for the month dropped 3%, while revenue lost almost 5% compared to the same time a year earlier.

Hotel occupancy for the full year ended at 59%, down almost 9% compared to 2024. Rate stayed relatively flat compared with 2024, down less than 1% at $120, though the 9-point dip in demand caused RevPAR to decline 9% to $71. Revenue for the full year ended about 9% down, YOY.

December Submarket Comparison:

Occupancy in the CBD ended the month at 45%, down less than 1-point over December 2024. ADR dropped almost 2% to $188, while RevPAR declined 2.4% to $85. Declining occupancy is due to an increase in overall supply, as demand showed a 1.7% gain, allowing revenue to stay flat YOY.
The Uptown/Greenway Plaza submarket showed a 4.5% gain in occupancy, despite a 1% loss in demand, as supply for the month was down 6% YOY. ADR was essentially flat at $163, while revenue showed a 2-point loss.
The Medical Center/NRG submarket saw an 11% decline in demand, and an 8.5% loss in occupancy, ending the month at 48%. Rate maintained a 1.5% gain, but did not offset demand, causing an almost 10% loss in YOY revenue.
In the George Bush Airport submarket, occupancy dropped 6% to 53%. ADR dipped by less than 2% to $83, while demand and revenue declined 6% and 7%, respectively.
The Southwest Freeway submarket lost approximately 6% in revenue and RevPAR and 3% in overall demand. Rate dropped 3% to $79, while occupancy declined 3 points to 53%.

Year-End Highlights

Though 2025 showed year-over-year declines compared to 2024’s record breaking KPIs, data trended more closely to 2023 numbers, indicating a more normalized trajectory in the market.

Business travel remained strong in 2025, driving ADR growth, especially within inner loop markets. A few major conferences that supported gains include:

American College of Healthcare Executives: Held in March, the conference brought occupancy in Downtown to 95% on peak, creating compression throughout the inner loop submarkets.
OTC: Held in early May, OTC caused compression throughout Downtown, Uptown and the Medical Center, with occupancy averaging above 75% throughout the market at the height of the event. The conference also brought strong rates over $250 for the week.
Afrotech: First introduced to the Houston market in 2024, Afrotech creates significant demand around Houston, with the conference centralized in Downtown, but conference activations held throughout the city. RevPAR in the Downtown market lifted 35% YOY for this event, with demand in Uptown gaining over 10%.

2025 also saw gains in weekend demand supported by a strong transient, or leisure, market, on top of its well-established business travel base. March was a good example of this convergence, with the market seeing a strong uptick due to the presence of the Rodeo and CERAWeek, on top of strong Spring Break performance. Moving into 2026, we can expect this trend to continue, as Houston hosts major international events, including the World Baseball Classic and FIFA World Cup.