The past year has seen a record drop in U.S. hotel occupancy rates, according to recent surveys of the hotel industry, and Texas has been hard-hit. Most statewide revenue-per-average-room rates have dropped at least 70 percent in the past year, depending on the metro area, according to a Bizjournals article, and a recent Bisnow article predicts record numbers of hotel failures in the coming months.
However, Houston has seen a relatively smaller drop in RPAR rates of 61.6, and part of the difference is that the sources of hotel demand are more diverse, dynamic and less reliant on tourism. This includes long-term visits to the Medical Center by patients and their families, as well as out-of-town workers. The Bizjournals article detailed ways that Houston First, an organization that promotes Houston tourism, has encouraged Houston hotels to create deals for local residents to enjoy “staycations” in other areas of the city. It even promoted them on its www.visitHoustonTexas.com website.
As the spectre of the coronavirus starts to weaken thanks to vaccinations of Americans, the hotel industry will begin to recover. Houston First, which arranges some conferences in Houston has begun to book major events for later this year, and other local shows are also announcing events in the coming months. One local company, Satya Inc., is poised to take advantage of the expected demand by building a new, 300-room hotel near the Medical Center, where demand has remained relatively high and is expected to increase further. Sunny Bathija, a partner in Satya Inc., told HotelNewsNow that he hopes that the timing of his project will work out.
“I know the hotel industry is not going to recover immediately in the next 24 months, but this is going to be my construction time,” Bathija said. “What we are foreseeing is that in two years there will be a recovery of this market, we’ll be putting COVID behind us and we’re hoping that the economy will be recovering.”