Occupancy in the Houston hotel market stood at 61% in June, down nearly 2% compared to last year. Declines are due to an almost 1% drop in demand, as well as a 1-point gain in overall supply. Though demand declined, revenue for the market showed healthy gains, increasing almost 15% over last year, thanks to a 16% increase in ADR, or average daily rate, to $141. That supported RevPAR (revenue per available room) gains of 14% to $86 and an overall revenue increase of nearly 15% over last June.

What’s Driving the Market

The George R. Brown hosted several conventions throughout the month, including American Clean Power, a clean energy conference which drove occupancy and revenue gains at the beginning of the month. However, the first two weeks of local games for the FIFA World Cup was the most significant driver of revenue gains. As a host city, Houston supported seven matches over an approximate three-week period, welcoming a mix of both domestic and international visitors to the market.

Note: This monthly report covers only the first two weeks of World Cup activity in Houston and not the full period. Additional data covering the full three-weeks of play in Houston will be released in coming days.

Though on aggregate demand dropped compared to last year in June, strong ADR across the market helped to support revenue gains, with all major submarkets showing double digit YOY percent increases in rate. 

Year to date, revenue for the overall Houston market is up approximately 7%, thanks to a 1-point lift in demand and an approximate 6% gain in ADR to $132.  RevPAR is up 6 points to $81, while demand remains flat over last year.

June Submarket Comparison:

• Occupancy in the Downtown/CBD submarket showed a 3% lift to 60% in June. This is due to a 6% increase in overall demand, however a 3% gain in supply offset the gains. ADR showed an impressive 32-point increase to $272, producing RevPAR increases of 36% to $163 and revenue gains of 40% YOY.
• The Medical Center/NRG showed occupancy at 63%, down 3%, though ADR reached $195, up 20%. RevPAR ended the month at $122, up 17%, while revenue gained 17% over last year.  
• In the Uptown/Greenway Plaza submarket, revenue showed a strong 24-point gain in revenue, due to a 34% lift in ADR to $227. RevPAR saw a 24% gain at $133, despite a 7% drop in demand and an 8% decrease in occupancy to 59%.

Short Term Rentals

Occupancy across the Houston market’s short-term rentals stood at 37% in June, down 2% compared with the year-earlier period. However, like in the hotel sector, ADR increased nearly 40% to $280, resulting in a 27% increase in revenue market wide.