March was a great month for Houston hotels, which showed growth across key performance indicators. A 1.2% lift in demand produced occupancy of 67.7%, up 1.9%, while ADR gained 8.8% compared to the same time last year, reaching $133. RevPAR increased 10.9% to $90, while revenue showed a 10.1% lift.
Year to date, the market is still showing a marginal dip in demand, however, the market is closing the gap to under 1% decline. Compared with Q1 2024, occupancy is down less than 1 percentage point to 61%. ADR, however, gained 5 points to reach $126, while RevPAR increased 4.7% to $77, and revenue gained 4.2%.
March Submarket Comparison:
- The CBD/Downtown submarket showed impressive growth, ending the month at 75.6% occupancy, up 10.6% and $261 in rate, a 9.5% lift. RevPAR increased 21% YOY to reach $197, while demand and revenue gained 14.1% and 24.9%, respectively.
- The Uptown/Greenway Plaza submarket showed the highest occupancy in Houston in March, reaching 76%, up 7.9% YOY. ADR gained 5.9% to $191, while RevPAR reached $145, a 14.4% lift.
- Occupancy in the Medical Center/NRG submarket reached 72.8%, up 5.7%. RevPAR gained 16.8% to $134, while rate showed a 10.5% lift to $184. Demand and revenue increased 4.1% and 15%, respectively.
- Though the Houston Hobby Airport/NASA submarket showed a slight 3-point decline in occupancy to 66.7%, the submarket showed strong gains across other KPIs. ADR gained 22.8% YOY to $107, while RevPAR increased 19.1%. Demand and revenue also gained 5% and 28.9%, respectively.
- The Houston North/Woodlands submarket showed gains in March, increasing 2.3% in occupancy to 65.4% and 5.1% in rate to $123. RevPAR increased 7.5% year over year, while demand and revenue showed a respective 3.6% and 8.9% lift.
In the Numbers
Luxury and upper upscale class hotels showed the strongest growth rates in March, with luxury class hotels reaching 71% occupancy and upper upscale class hotels sitting at 75.2% occupancy, up 8 points over last year. RevPAR for luxury hotels hit $239, up 12.3%, while demand and revenue gained 11.6% and 14.3% respectively. Conversely, economy class hotels showed declines across key performance indicators, dipping 5.2% in demand and 4.1% in RevPAR.
What’s Driving the Market
March brought a convergence of business and leisure travelers to the market. The Houston Livestock Show and Rodeo broke attendance records this year, supporting solid occupancy to the Medical Center/NRG submarket through the first three weeks in March. Houston also proved to be a Spring Break destination, with leisure bookings mid-March up over last year. Destination travelers compounded on a strong business travel month with the presence of CERAWeek, held at the George R. Brown Convention Center. CERAWeek, a premier energy conference held in Houston annually, supported occupancy Downtown at over 90% at the peak of the conference, and created major compression throughout the city.
Written by Megan Henson
Pictured: The Moran, City Centre
