Houston’s Recovery Bodes Well For Hotel Property Performance
A variety of forces are propelling hotel occupancies in Texas. The state continues to generate strong occupancy and RevPAR gains, primarily led by the Houston market. Though Hurricane Harvey boosted occupancy and revenue metrics as dis-placed residents sought housing in late 2017, strong job growth and the rebounding oil industry further sustain room demand this year. Job growth in Houston rose at a faster clip than the national average during the year ending in the second quarter and the oil and gas industry has made a significant recovery since its low in 2016. These factors are benefiting room demand as business travelers visit the metro to attend meetings. As a result, Houston boasted the strongest occupancy gains and RevPAR growth among the state’s major metros during the past 12 months.
Supply additions outweigh demand in Dallas. Outside of Houston, an abundance of new rooms in Dallas is placing down-ward pressure on occupancy, moderating RevPAR growth. During the past 12 months ending in the second quarter, more than 5,900 rooms have been placed into service. An additional 9,000 rooms are underway and more than 11,600 are expected to break ground in the next 12 months. The Metroplex has the second largest pipeline in the nation, following New York.
