A new mega-resort is planned for Galveston Island.

RREAF Holdings LLC announced this week a partnership with Innisfree Hotels to develop a new Margaritaville resort on the east end of Galveston.

The $250 million project will include a 334-room hotel, 2.5-acre waterpark, four restaurants, a ballroom and meeting space and additional features. The companies said a groundbreaking is slated for later this year with completion in 2026.

At 300,000 square feet, the new Margaritaville property will be one of the largest developments on the eastern side of the island.

"The Galveston market has exponential growth opportunities stimulated by its economy and the evolution of people moving to Texas in the past two years," said Kip Sowden, CEO of RREAF Holdings. "We are honored to work with such distinguished companies as Innisfree Hotels and Margaritaville. With best-in-class management and highly amenitized options for our customers, we are offering a premier experience in a well-positioned hospitality asset for a fruitful future."

The Margaritaville resort will feature an array of amenities including pickleball courts, a family entertainment center, a lazy river along with an adult pool, and signature Margaritaville food and beverage offerings.

Though final 2023 figures are not yet available, Galveston saw more than 8 million visitors in 2022, up 25% from 2021. More than a dozen hotels representing roughly 1,400 rooms are under construction or planned in the Galveston-Texas City submarket, according to data from CoStar.

The greater Houston region hotel market finished 2023 with strong performance growth. Occupancy averaged 59.8% for the year, up 5.6% from 2022, while ADR and RevPAR rose 6.3% and 12.3% respectively. Revenue market wide was up nearly 12% to $2.6 billion for the year.

Written by A.J. Mistretta