May was a good month for the Houston hotel market, showing steady growth across all major KPIs. Occupancy for the Houston market showed an 11.9% year-over-year gain at 67.3%, while ADR saw a 3.2-point lift at $119. Market demand increased 12.3%, while RevPAR grew 15.4% ending at $80.
Year to date, the market continues to gain incrementally, with occupancy at 63.3%, a 2.3% gain, and ADR at $119, an almost 3% increase. Demand is up 2.8% for the year, while RevPAR showed gains of 5.3% at $76.
Market Trends
The May market showed a continued appetite for travel in Houston, as all hotel class categories showed gains in performance. Upper Upscale and Midscale class hotel types showed the largest year-over-year growth in occupancy, up 13.5% and 13% respectively. Demand increased most significantly in Luxury, Upper Upscale and Upscale class hotels, indicating that travel demand leading into the summer is most apparent in groups with higher levels of disposable income. However, Economy and Midscale class demands are not trailing far behind, with gains of over 10% and up in these categories.
May Submarket Comparison:
Houston submarkets thrived in May, growing across most KPIs.
- The Galleria/Greenway Plaza submarket saw significant YOY growth in occupancy in May, with a 19.5% increase, landing at 68.1%. ADR ended the month at $179, while RevPAR and Revenue showed gains of 18.9%. The market also saw a 20% increase in overall demand.
- The CBD/Downtown Houston market saw the highest overall RevPAR at $133, an 11% gain, and occupancy at 63.3%, up 11.8% from a year earlier. ADR for the month sat at $211, while demand showed an uptick of 16.5%.
- The Houston Southwest Freeway submarket continues to see gains, with an 11.2% increase in occupancy at 70.3%. ADR showed a 3-point uptick at $85, while RevPAR increased 14.3%. Demand in this submarket gained 11.2%, while Revenue increased 14.3%.
- The Katy Freeway West market saw an occupancy rate of 71.8%, a 11% gain and ADR at $108, a 6.6% increase. Demand was up 9.4%, while RevPAR saw an 18% lift, ending at $77.
Driving performance:
The OTC conference, held in early May, was a major driver of success in the market, with major impact of the conference showing up in the Galleria/Greenway Plaza, CBD and Katy Freeway West/Energy Corridor submarkets. The midmonth derecho storm that swept across Southeast Texas and caused multi-day power outages in the Houston region also contributed to increased activity in the market.
Written by Megan Henson
