March was an exceptional month for hotel performance in Houston with occupancy reaching 70% for the overall market, up 3% over last year. ADR grew by 8% to reach $144, while RevPAR showed an impressive 12-point lift to $101. Demand was up by 4%, while revenue grew 12.5% over last year.
Year to date, the market was up 2% in occupancy to 62% and 5% in ADR, reaching $132. RevPAR was up by 7% to $82, while revenue grew 8% over last year.
March Submarket Comparison:
- The Downtown/CBD ended an impressive month at 81% in occupancy, up 6.5% YOY. ADR showed an almost 15% lift to $298, while RevPAR gained 21.9% to $240. Demand was up 6.5% while revenue grew by 22%.
- The Uptown/Greenway Plaza submarket also showed robust growth with occupancy reaching 82%, up 8% YOY. ADR showed an 11% gain to $212, while RevPAR increased by 19% to $174. Demand gained 8%, while revenue grew by 19% YOY.
- Occupancy in the Medical Center/NRG submarket reached 76%, up almost 5% compared to the same time last year. RevPAR grew by 15% to $154, thanks to a 10% increase in ADR to $202. Demand rose 4%, while revenue gained 14%.
- Occupancy reached 71% in the George Bush Airport submarket, up 8%, with rate showing a 9% gain to $99. RevPAR grew by a 18% while demand and revenue grew by 10% and 21%, respectively.
- The Katy Freeway West submarket saw an almost 5% gain in occupancy to 73.8% and a 4% spike in ADR. RevPAR reached $86, up 9%, while demand and revenue increased by 5% and 9%, respectively.
Behind the Numbers
Weekend occupancy was a major driver in March, reaching 78% for the market overall, compared to weekday occupancy of about 67%.
Economy scale hotels saw a marginal dip in ADR, down about a half a point, while Midscale properties saw a slight decrease in demand, down less than 1%. The market saw strong year-over-year growth across KPIs, with luxury and upper upscale hotels reaching almost 78% in occupancy for the month. Rates across all scales, except economy, showed gains, with upper-upscale properties showing an 11% increase in ADR.
What’s Driving the Market
Houston benefited from a healthy convergence of business and transient, or leisure, travel in March.
On the leisure end, the World Baseball Classic, a 6-day long tournament that hosted major international teams, generated strong demand in the market, both domestically and internationally. Additionally, March brought the Houston Livestock Show and Rodeo as well as Spring Break travel, all of which supported strong year over year transient booking growth.
On the business front, the market hosted several major events at the George R. Brown Convention Center. March benefited from the final day of NCA’s All Star National Championship, with occupancy reaching 94% in the CBD, setting the tone for an impressive month. CERAWeek, a major energy conference held annually in Houston, brought a 15% YOY increase in demand at the end of March, as well as occupancy reaching 88%. Other major conferences in March included the American College of Healthcare Executives, the Texas Library Association, as well as a volleyball tournament that brought weekend occupancy up to 89% over the course of the tournament.
Written by Megan Henson
