September Showed Positive Gains for the Houston Hotel Market

September hotel performance displayed strong year over year growth, with occupancy reaching 58%, up 4 percentage points, while ADR gained 3 points at $121. Demand showed a 5% lift, while RevPAR gained 7% reaching $70 and revenue gained 8%.

Year to date, revenue has grown by 7% over last year. Demand has shown a 1.5% lift, while ADR is up 5 points at $128. Occupancy sits at 60%, up 1% and RevPAR is up 6%, reaching $77.

September Submarket Comparison:

In the Downtown/CBD submarket occupancy ended the month at 60%, down 2% YOY. Occupancy declines were due to a YOY increase in supply, as demand showed a marginal uptick. ADR, however, showed a 1.5% decrease at $219, causing a nearly 4% decline in RevPAR to $132 and a 1% dip in revenue.
Uptown showed occupancy at 62%, up 1% and ADR at $172, up 4% over last year. RevPAR ended the month at $106, up 5% while revenue gained 5%.
Occupancy in the Medical Center/NRG reached 59%, up 5.5% YOY. ADR showed a 4-point increase to $145, while RevPAR is up nearly 10% to $85 and revenue gained 10%.
The George Bush Airport submarket saw a 9% increase in revenue due to a 4.5% lift in demand and a 4-point gain in ADR to $90. Occupancy sits at 58%, up 4%, while RevPAR increases by 8% to $52.
In the Southwest Freeway submarket, occupancy gained 2.5% to 57% and ADR hit $84, up 2 points. RevPAR reached $48, up almost 5%, while revenue increased by 5%.

Behind the Numbers

Overall, the market showed growth across hotel segments, with transient (leisure) demand lifting 5.5% and group, or business, demand up by 2 points.

Unlike trends the market has shown this year so far, effects of the k-shaped economy are lessening. Economy scale properties showed an impressive 7-point lift in overall demand and some marginal increases in rate, bringing revenue up nearly 8% compared to last year. These strong YOY gains were consistent across chain scales, with luxury and upper upscale hotels showing an average 5.5% lift in revenue and midscale chains reporting an impressive 6% gain in demand and 9% increase in revenue.

What’s Helping Drive the Market

Houston hosted a few major conferences at the George R. Brown in September, including Turbo, a premier conference bringing together turbomachinery professionals, as well as Breakbulk, a global conference for the project cargo and breakbulk community.