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Marriott SpringHill Suites I-10 West Energy Corridor


Location: Houston, TX
Price: Call for Offers
Rooms: 112
Lot Size: 2.5 acres
Year Built: 2015

Current
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    Location. The Property is near the intersection of Interstate 10 and Highway 6, near several office parks and restaurants, making it an ideal choice for guests. Additionally, the Property is within a five-minute drive of Typoon Texas waterpark, Katy Mills Mall and several oil/gas office complexes that make up the area known as the Houston Energy Corridor.

    Below Replacement Cost. Based on pricing guidance, the Hotel can be acquired below replacement cost. This offering presents an excellent opportunity to purchase a Marriott branded hotel for less than the cost of construction, giving an investor an attractive basis which will help re-position the SpringHill as the market recovers.

    Underperforming Asset. Since opening in January 2015, the SpringHill has struggled to capture market share, finishing 2016 with the following statistics: 29.7% occupancy, $96.52 ADR and $28.67 RevPAR. Whereas, the competitive set finished 2016 with the following statistics: 46.8% occupancy, $106.97 ADR and $50.38 RevPAR, leading to a 57.8% penetration index and 6 of 8 rank. Looking at June 2017 STR report, the Hotel has increased the RevPAR to $39.25 compared to the competitive set at $53.42, which is showing signs of improvement at a 73.5% penetration index.

    Houston Energy Corridor. Historically, the Houston Energy Corridor has been the premier market in Houston for RevPAR growth, driven primarily by corporate demand in the oil/gas industry. Looking at the “Katy Freeway West” submarket, which encompasses the Houston Energy Corridor, the upper-priced hotels had the following statistics in 2014: 73.0% occupancy, $151.78 ADR and $110.79 RevPAR. In 2016, this same tract finished with the following statistics: 61.0% occupancy, $131.53 ADR and $80.27 RevPAR, which represents a 27.5% decline in RevPAR compared to 2014. The decline is due to the tightened travel budgets from the local oil/gas companies as oil prices remained unstable. However, with oil prices showing signs of stabilization in Q2 2017, oil/gas executives are confident that the future is bright.


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