Houston Hotel RevPAR Growth Jumps in July

Houston Hotel RevPAR Growth Jumps in July

July saw major improvement across key performance indicators in the Houston hotel market, with exceptional gains in RevPAR. A 19.7% increase in demand produced market wide occupancy of 73.3%, a 19.3-point lift and ADR at $129, a 15.2% increase. RevPAR increased 37.5% to $95, while Revenue posted a 38% gain.

Year to date, Houston continues to see healthy growth, with a 6.6% gain in demand, resulting in a 5-point lift in ADR at $121 and a 6.1% increase in occupancy at 65.8%. RevPAR has gained 11.4% so far this year at $80.

Market Trends

The Houston Downtown submarket gained 22.1-points in RevPAR in July at $136, leading in year-over-year RevPAR growth compared to national competitive markets, while other large Texas cities saw a decline.

The Houston market overall saw increases in demand, producing occupancy rates above 70% across all hotel classes, except for Luxury class properties. Though the Luxury class still saw a 16.1% gain YOY, occupancy sat at just 57% while other hotel classes ranged between 71%-76%.

July Submarket Comparison:

Houston hotel submarkets gained across key performance indictors (KPIs), with exceptional growth in markets outside the Loop due in part to increased demand from the effects of Hurricane Beryl.

The Houston East/Baytown submarket saw tremendous growth in RevPAR, spiking 74.2% YOY. Occupancy for the submarket sat at 75.2%, an almost 30% gain, while ADR spiked 34.3% to $106. Growth supported a major boost in Revenue as well, producing a 73.9% gain.
Houston Hobby Airport/NASA ended the month at 76.4% occupancy, a 22-point gain. ADR increased 21.3% to $105, while RevPAR gained 48% year-over-year.
The Houston North/Woodlands submarket showed the highest overall occupancy within the Houston hotel market at 76.9%, a 26-point lift. ADR gained 13.4% to land at $130, while RevPAR increased almost 43% to $100.
RevPAR growth in the Houston Southwest Freeway submarket hit 47.6% to $77, while Revenue gained 50.4% YOY. Occupancy in the submarket ended the month at 74.6%, a 15.9% gain, while ADR showed a 27.3-point lift at $104.

Driving performance:

KPI growth in the Houston hotel market was supported by a variety of factors in July. Some major events in July supported improved performance, particularly in the Medical Center/NRG submarket. The quarter-final match of COPA, held on the Fourth of July, caused occupancy increases in the submarket. This was especially impactful as the Houston market typically sees low occupancy levels around this holiday. The Houston World Series of Dog Shows held at NRG showed occupancy in the Medical Center submarket at 77.6%, a 31.4% lift, with occupancy rates over 80% for the first three days of the event.

Hurricane Beryl had an unforeseen impact on the hotel market in Houston, as locals sought out accommodations, due to city-wide extended power outages. Major growth within outer Loop submarkets is likely due, in part, to this demand. However, the market overall saw lift, as local demand converged with existing group and transient demand from the market. For example, the CBD saw tremendous spikes in KPIs, as power was restored to the area quickly. That demand, in addition to the presence of the Texas FFA Association conference, which accounted for over 3,500 rooms booked on peak, created occupancy rates topping out at 92% on the Wednesday after the storm. The CBD ended that week with a 24-point lift in occupancy at 78.6% and a 22.7% increase in ADR at $225.

Written by Megan Henson