Austin Hospitality Market Report

Recent supply influx impacts metrics. Hotel fundamentals are favorable in Austin despite lower occupancy during the 12-month interval ended in June. The metro’s 67.4 percent annual occupancy rate exceeded the 2000-to-2019 average by 70 basis points. Demand was relatively consistent across hotel classes as well, ranging from 66.1 percent in the upper upscale segment to 68.7 percent in the economy sector. Regardless, the cumulative impact of development from 2016 to 2022, when 15,900 rooms were added, has pushed supply past demand. This dynamic has fostered a moderate delivery pullback, with only 1,800 rooms slated for 2024 completion — a total 500 keys below the 2016-to-2022 average. Still, supply is expected to outpace demand over the near term. Comparable conditions across price spectrums, however, allow local occupancy to eclipse the three other major Texas markets by at least 100 basis points in 2024.