Houston Hospitality Market Report

Broad economic price pressures dictate thrifty travel agendas. Occupancy rates in both the economy and midscale segments climbed within 200 basis points of their respective 2019 averages during the past year ended in May. On the other end of the spectrum, the loss in occupancy relative to pre-pandemic measures exceeded 1,000 basis points in the upper upscale and luxury segments. This variation in recovery timelines is tied to economic conditions, labor limitations at highly-amenitized properties, and the slow return of international and business-related visitors. Many domestic travelers are factoring in elevated flight costs and prices at the pump when planning a trip, persuading more visitors to seek budget-friendly accommodations when visiting the Space City. In fact, Houston’s most expensive ADR submarkets — the CBD and Galleria/Greenway Plaza — were the only two areas in the metro that logged an average occupancy rate below 50 percent during the past year.