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Market Report

Austin Hospitality Market Report

2024 Investment Forecast

Austin Faces Challenges from Slow Business
Travel, But Welcomes Long-Run Tailwinds

Leisure travel stays strong while business demand lags. Tepid corporate travel expectations this year are reflected in discontinued airline routes, a dynamic that will translate to the lowest occupancy rate since 2021. Carriers like Virgin Airlines and Alaska Airlines recently announced some services to Austin ending, like Alaska’s nonstop flight between Austin and San Jose, citing declining travel between the two tech hubs as the reason. As companies, particularly those in the tech sector, enter a cost-cutting cycle, lowering business travel will impact the market’s overall hotel occupancy. Yet, firms are still relocating or expanding in Austin, like Oracle and Tesla, hinting at renewed group travel long-term. Leisure travel will somewhat counterbalance this trend with events like the SXSW Festival downtown and Formula 1 Grand Prix in South Austin. Economy hotels will subsequently have a metro-high of 67.2 percent occupancy in 2024, supported by cost-oriented tourists.
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