Houston Business Journal | Cara Smith

The dramatic recovery that Houston’s hotel market made in the third quarter, largely due to Houstonians and rescue workers booking more hotels in the aftermath of Hurricane Harvey, nearly balanced out the market’s slow performance in 2016.

In the third quarter of 2016, Houston’s hotel market saw the nation’s strongest declines in occupancy, revenue per available room (or RevPAR) and average daily rate (or ADR). The city’s occupancy fell a whopping 10.3 percent to 60.2 percent, according to data from STR, a hotel data firm. But in the third quarter of 2017, the city’s hotel market saw a 19.6 increase in occupancy, according to a report from Source Strategies, a Texas-focused hotel consultancy.

The recovery was due in-part to demand from Harvey, as well as strong oil prices, per the report. Also in the third quarter, Houston’s supply of hotel rooms grew by 7.2 percent, or 6,500 rooms.

Houston hotel rooms brought in roughly $626 million in revenue in the third quarter, compared to $570 million in the second quarter and $609 million in the first quarter, according to the report.

Houston hotels comprise just under a quarter of the state’s hotel inventory. Overall, Texas hotels enjoyed a strong third-quarter performance and saw their collective revenues grow 10.5 percent in the third quarter. This is a steep hike in growth compared to the 0.9 percent revenue growth Texas hotels saw in the second quarter.

But of the state’s top 20 best-performing hotels across all price points, ranked in terms of their RevPARs, Houston only had one hotel make the list. With a RevPAR of $237.77, the Hotel Granduca was the state’s fourth best-performing hotel in the third quarter.

For comparison, Dallas had four hotels in the state’s top 20 best-performing hotels, and its Ritz-Carlton Hotel took the top spot in Texas with a RevPAR of $292.61. Austin had three hotels among the top 20; its W Hotel was ranked No. 11 with $202.71 in RevPAR.


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