The Houston hotel market ended Q3 strong, as September KPIs showed solid year-over-year growth. ADR for the market showed an 8.5% gain to hit $124, while occupancy increased 4.5 points to 62.2%. RevPAR continues to see incredible gains, lifting 13.3% over last year to $77, while revenue increased 14%.
Year to date, the market is growing, as occupancy gained 8.2% to 66.2% and ADR grew 6.2% to $122. Demand for the market overall has shown an 8.8% gain, while RevPAR and revenue have increased 14.9% and 15.5%, respectively.
Market Trends
Overall, the Houston market is normalizing after strong summer demand produced major spikes in key performance indicators, however, Houston continues to see strong year-over-year growth.
Growth across hotel types has remained consistent, with some minor dips in occupancy for the luxury and upper-upscale classes. Midscale class properties showed the strongest gains for September, with a 10.7% YOY gain in occupancy and an 18.5% increase in ADR. RevPAR and revenue for the midscale class segment gained 31.2% and 29.9%, respectively.
Weekday growth continues to hit new heights in the Houston market, with an 18.9% gain in weekday RevPAR and a 10% increase in weekday ADR. For September, weekday ADR outpaced weekend ADR at $125 vs. weekend rates of $120. Though weekend occupancy is still tracking ahead of weekday occupancy (66% vs. 61%), weekday occupancy is closing the margin, showing 8.1% YOY growth, while weekend growth only gained nominally at 0.3%.
September Submarket Comparison:
- The CBD/Downtown market showed a slight 2% YOY dip in occupancy to 61.5%, however other key performance indicators showed growth. RevPAR increased 3% to $141, while the submarket showed a 5.1% gain in rate to $230. Demand gained 2.1% while revenue increased 7.3% YOY.
- The Houston East/Baytown continues to show exceptional growth, ending September at 62% in occupancy, a 12.6% gain over last year and $94 in rate, a 23.2% increase. RevPAR gained 38.7% YOY, while revenue increased 37.2%.
- The Houston North/Woodlands submarket showed the highest occupancy rates of all submarkets in September, at 67%, a 13.8% increase. ADR gained 10.8% to hit $126, while RevPAR and revenue gained 26.1% and 27.7% respectively.
- The Houston Hobby Airport/NASA submarket displayed incredible growth, gaining 44.4% in revenue and 16.9% in demand. Occupancy lifted 9.7% to 60.9%, while ADR and RevPAR gained 23.5% and 35.5%, respectively.
Written by Megan Henson
Pictured: Hilton
