Austin home to majority of state’s 10 most-lucrative hotels; Four Seasons, Hotel San Jose & more highlighted in Q2 report

The hotel market slowed across Texas during the second quarter and will likely continue to slacken this quarter due to the impact of Hurricane Harvey, but Austin seems barely touched by the downturn.

Source Strategies Inc. in San Antonio, which tracks industry trends, reports there is still room for more hotel development in Austin despite thousands of rooms recently delivered and under construction.

“Austin remains an undersupplied market with investment in new room supply likely in the near term,” the most recent Hotel Brand Report states.

Austin still leads the state in occupancy rates with an average of 77 percent, outpacing Dallas-Fort Worth by nearly 6 percent.

Austin far eclipses all other markets in the state for average room rate and revenue per available room, or RevPAR. It’s one of the most important indicators of a hotel’s success.

Austin’s RevPAR rate for the last quarter was $108.87 per room. San Antonio came in second but way down at $77.48.

Austin’s dominance is also reflected in the financial performance of individual hotels.

Seven of the top 10 hotels by RevPAR are in Austin with the Four Seasons ranked No. 2 behind the Ritz-Carlton in Dallas. Twenty-two of the top 40 hotels are in the Austin area, including Lost Pines Resort & Spa in Bastrop.

Expect the new Fairmont Austin near the Austin Convention Center to debut in that upper tier of hotels, though no opening day has been announced. Previously I was told it would open in September but nothing has been announced and I’ve reached out to the developer for an update.

An intriguing note, though probably not of great significance: The JW Marriott — Austin’s newest high-octane meeting place to see and be seen — took a tumble on RevPAR. It dropped from No. 9 a year ago to No. 18 this year.

Some of the most valuable information in the Hotel Brand Report is packed into spreadsheet details and lists.

Source Strategies ranks the top 500 hotels across the state by RevPAR — everything from the 1,600-room Hilton Anatole Hotel in Dallas to the 40-room Southern Inn & Suites in Kermit, Texas.

Some of the smallest hotels translate to big results.

The Austin Motel — the quirky renovated motor inn on South Congress Avenue owned by Bunkhouse Group — shot up to No. 54 on the list from No. 111 a year ago.

Archer Hotel, the new brand at Domain Northside that I’ve written about in detail, debuted for the first time at No. 43, a very respectable ranking.

Hotel Granduca in West Austin, which has struggled to gain traction after it was completed in 2015, has gained substantially, logging in at No. 100 way up from its 2016 ranking at No. 446.

On the flip side, some hotels have dropped dramatically in RevPAR, at least when compared with other hotels. Most are mid-range brands.

For instance the Wyndham Garden Inn on Woodward Drive in South Austin, and a favorite of parents visiting students at St. Edward’s University, barely made this year’s list at No. 498. A year ago it was No. 321.

Several hotels near Cedar Park and in the Arboretum area of Austin have also dropped dramatically down the list.

The Hampton Inn & Suites and Home2 Suites, both near Lakeline Mall, have dropped about 100 places during the past year.

Source: Austin Business Journal
Jan Buchholz, Senior Staff Writer

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