Houston Hospitality Market: Q1 In Review

Here’s a look at how the Houston hospitality market performed in the first quarter of 2025.

Lodging

The Houston hotel market had a slow start in Q1, with declines across all key performance indicators in January for the overall market. However, a stronger February and March helped to support growth in ADR, RevPAR and revenue. The market ended Q1 with a slight 0.3% dip in occupancy, reaching 61% and a 0.8% decline in demand. Rates continue to rise, however, showing a 5% gain at $126, a 4.7% increase in RevPAR to $77 and a 4.2% lift in revenue.

Air

Air travel was down 2% for the first three months of the year, with a little over 14.4 million passengers through both Bush Intercontinental Airport (IAH) and Hobby Airport (HOU). For Q1, Hobby showed the most notable declines, dipping 9.8% YOY, with a 9.6% decrease in domestic travellers and a 13% decline in international passengers. IAH showed marginal gains for Q1, increasing passengers by 0.4%, with a 0.5% lift in domestic travel and a 0.2% gain in international. Domestic travel overall is down 2.3%, with the Houston Airport System accommodating approximately 11.1 million passengers year to date through March, while international travel has seen less than a 1% decline over 2024, to just over 3 million passengers.

Events of Note

Q1 brought a mix of business and leisure travellers to the market, especially in March as Spring Break converged with the Houston Livestock Show and Rodeo and CERAWeek, an international energy conference held at the George R. Brown Convention Center. Major events that supported growth in Q1 include:

PCMA, a convention for professional meeting planners held in January, which prompted a 57% YOY increase in demand Downtown.
O’Reilly Auto Parts convention, held in January supported over 6,200 rooms booked at the peak of the conference.
NAPE, an energy conference held in February, caused an almost 10% gain in RevPAR Downtown and an almost 5% gain in RevPAR in the Uptown/Greenway Plaza submarket.
The American Physical Therapy Association conference, which took place in February, created compression throughout the Houston market, with rate gains Downtown over 20.5% YOY and 16.1% in the Medical Center/NRG submarket.
The Houston Livestock Show and Rodeo, which started at the end of February and ran through the third week of March, had record attendance this year and prompted growth throughout the market, especially in the Medical Center/NRG submarket and Downtown.
CERAWeek, an annual energy conference held in March, supported tremendous growth in the Uptown, Downtown and Med Center submarkets, with occupancy ranging between 75%-85% through these markets at the height of the conference.

Written by Megan Henson