Hospitality Investing News - South Central Texas January 2025

Hotel Deals Surge: The pace of U.S. hotel deals increased significantly in 2024, surpassing activity levels of 2022 and 2023.

Marriott's Strategic Move: Marriott acquired 1,200 tiny cabins to support the launch of its new outdoors-focused brand, a clear pivot toward experiential lodging.

CMBS Financing Resurgence: Declining interest rates drove a resurgence in CMBS lending, with hotel loan originations hitting $14B through October, surpassing the combined volumes of 2022 and 2023.

Interest Rates: Continued rate cuts by the Federal Reserve are expected to spur hotel financing activity further. CMBS loan rates could dip below 7%, fostering growth.

Labor Challenges: The hospitality sector remains understaffed, with only 1.93M workers in September 2024 compared to 2.2M pre-pandemic. Rising wages (30% since 2020) and immigration policies could further pressure workforce availability.

Texas Hotel Pipeline

Over 14,000 hotel rooms under construction, with 13,000 rooms projected to open in 2025-2026.

-Dallas: Leading the state with 5,500 rooms under construction, including the luxury-class The Knox by Auberge Resorts (completion 2026).

-Houston: Highlights include Hotel Daphne and Hotel Saint Augustine, supported by Hyatt's acquisition of Standard International.

-San Antonio: The Monarch San Antonio, a Hilton Curio Collection, to open in 2026, featuring luxury amenities in the revitalized downtown HemisFair Park.

-Austin: The 1 Hotel in Texas’ tallest tower, the Waterline, is set to debut in 2026, combining luxury hospitality with mixed-use functionality.