Houston’s ranking on an annual list of America’s best performing cities rose significantly this year thanks to substantial job growth led by the leisure and hospitality industry.

Houston’s ranking on the Milken Institute’s 2024 report on Best Performing Cities rose 82 spots to 62nd place. Houston saw the third biggest increase among large metros on this year’s list.

Inside the numbers: The top performing large metros in this year’s report benefited mostly from robust job growth between 2021 and 2023. In the case of Houston-The Woodlands-Sugar Land, as well as Richmond, Va. (ranked 65 on this year’s list) and Elgin, Il. (ranked 90), these gains were led by the hospitality sector. That continues a trend noted in last year’s Best Performing Cities report where cities with the biggest gains were characterized by a post-pandemic travel and tourism recovery.

According to the report, “with employment in the leisure and hospitality sector [nationwide] still below its pre-pandemic level (based on a comparison of December 2022 to December 2019), recovery in this sector may continue to drive growth in years to come.”

Digging deeper: The report examines 403 U.S. metro areas using a series of 13 different metrics to determine overall rankings, including long- and short-term job growth, wage growth, the concentration of high-tech companies and broadband access among others. Houston ranked 23 overall for job growth between 2021 and 2022 and 20th for wage growth over the same period. The metro also ranked 8th overall when it comes to high-tech concentration.

More growth ahead: There are currently more than 344,000 people employed by the leisure and hospitality sector in metro Houston, which has consistently added jobs since the easing of the pandemic. The figure represents a 3% increase over pre-pandemic sector employment in 2019 and a forecast from the Greater Houston Partnership suggests the sector could gain another 10,000 jobs in 2024.

Written by A.J. Mistretta