Houston hotels started 2026 with modest gains. Occupancy for the overall Houston market reached 54%, an almost 1% gain over last year. Though ADR is showing a negative to flat trajectory at $115, RevPAR is up by 0.6% to $62. Demand for the overall market showed a 1.2% gain, while revenue was up 1.1%.
January Submarket Comparison:
- In the CBD, occupancy dipped 1.1% to 57.4%. Occupancy declines are due to a 2.4% overall gain in supply in the last year, as demand showed a 1.4% gain. Rate is down to flat at $217, with RevPAR down 1.2% to $124. However, revenue has gained 1.2% YOY.
- The Uptown/Greenway Plaza submarket showed occupancy at 55.1%, down less than 1% and ADR at $176, up 0.6%. RevPAR is down to flat at $97, with revenue flat as well.
- The Medical Center/NRG submarket started the year strong, gaining 3.5% in occupancy to 54% and almost 1% in rate to $138. RevPAR gained 4.2%, reaching $74, while demand and revenue gained 2.5% and 3.2%, respectively.
- Occupancy in the Katy Freeway West submarket sat at 55%, up 1.5% YOY. Rates dropped 2.3% to $103, bringing RevPAR down less than 1% to $56. Demand showed a 2-point lift, however declining ADR brought revenue down 0.3% or essentially flat.
- The George Bush Airport submarket showed the most apparent YOY declines, with revenue decreasing by almost 4%. Declines are largely due to declining ADR, which dropped by 3%, as demand and occupancy were down less than 1%.
Behind the Numbers
Midsize hotels showed strong growth in January, especially hotels with 75-149 total rooms. In this grouping, occupancy lifted about 2%, while demand and revenue gained 3.8% and 4.7%, respectively. This contrasts with hotels with 300 rooms or more, where demand and revenue both declined compared to last January.
Consistent with 2025 trends, luxury class hotels continue to show growth, gaining about 3.5% in YOY revenue due to a 3.2% lift in ADR. Demand for these rooms, however, is consistent with last year. Economy-scale hotels, in contrast to last year, showed gains in January, with occupancy gaining almost 4% due to a healthy 5% lift in demand.
What’s Driving the Market
January showed strong transient demand gains throughout major submarkets, with the CBD/Downtown market showing a 17% lift in transient bookings. Uptown, Hobby Airport and the Houston/North Woodlands submarkets also saw strong transient demand, with YOY gains averaging over 5% across the three submarkets for the month.
On the group demand side, the GRB hosted several city-wide conferences in January, including O’Reilly Auto Parts mid-month, as well as the American Meteorological Society at the end of the month, which helped support overall demand and compression throughout the Houston market.
Written by Megan Henson
