Revenue generated by Houston hotels increased by 8% in July, as demand increased by 2% and ADR (average daily rate) showed a 6% lift to $122. RevPAR ended the month at $72, up 7%, while occupancy reached 59%, up 1.2%.
Year to date, occupancy is up marginally at 61%, while ADR has increased by 6% to $131. RevPAR is up 6.5% at $80, while demand and revenue have gained 1% and 7%, respectively.
July Submarket Comparison:
- Occupancy in the Downtown/CBD submarket increased by 6.5% to 53%, while ADR showed a 10% lift to $205. RevPAR showed an impressive 17% gain to $108, while revenue increased by 21% over last year.
- In Uptown demand dipped by half a percentage point, bringing occupancy down 0.6% to 56%. A 12% increase in ADR, however, brought RevPAR up 11% to $93 and revenue up 11% YOY.
- The Medical Center/NRG showed a 4% increase in occupancy to 58% and a 10% lift in rate to $145. RevPAR showed a 15% increase to $84, while demand and revenue gained 5% and 15%, respectively.
- In the Houston East/Baytown submarket, revenue showed a 4% uptick, due to a 1.4% increase in demand and a 2% lift in ADR to $86. Despite demand increases, supply in the submarket showed a 2% YOY gain, bringing occupancy to 53%, down 0.5%.
- Revenue in the Houston Hobby Airport/NASA submarket increased by 6%, despite a 1.5% decline in ADR. Demand increased by 7%, bringing occupancy up 6% to 65% and RevPAR up 5% to 69%.
Behind the Numbers
High end hotel inventory saw the strongest RevPAR gains in July, with luxury scale hotels showing a 14% gain and upper upscale and upscale hotels showing respective 8% and 7.5% lifts. However, growth was felt across chain scales, with economy scale showing a 3-point increase in RevPAR and independent hotels lifting 10.5% in total revenue for the month.
Though average daily rate continues to be the primary driver of growth in the market, most chain scales experienced demand growth , indicating an uptick in summer travel.
What’s Driving the Market
July started strong, hosting Houston’s final World Cup match over Fourth of July weekend, a period that historically shows low occupancy.
Group demand for the month also saw an uptick, increasing by 11% and bringing revenue up by 23% compared to the same period last year. Group demand was supported by several events held at the George R. Brown Convention Center. DreamCon, a premier entertainment convention, supported strong occupancy in both hotels and short-term rentals throughout the major submarkets. Additionally, Texas High School Coaches Association Convention, held mid-month prompted strong compression and brought RevPAR up for Houston overall by 5%.
