Reversing COVID spiral likely yearslong effort for city hotels

Visitors from nearby will throw the industry a lifeline, experts predict

With the convention industry facing an uncertain future, it could take several years for San Antonio hotels to climb out of the hole caused by the coronavirus pandemic.

Some conferences have been canceled or shifted online. Planners handling in-person gatherings are figuring out how to adjust spacing and transportation to meet social distancing guidelines.

Meanwhile, hotels struggle to fill rooms.

But the city’s appeal to daytrippers and vacationers from nearby areas could aid the hotel industry’s recovery, according to commercial real estate firm CBRE.

“San Antonio is positioned very well for a turnaround,” said Jeff Binford, managing director of CBRE Hotels South Central Division.

Occupancy at local hotels is forecast to plunge about 35 percent by the end of the year, compared with 2019 levels, and return to a mid-60 percent range by 2022. That would be close to last year’s rate of 66.4 percent.

CBRE predicts revenue per available room — a key measure of hotels’ performance — will decline by more than 50 percent this year. It’s not expected to exceed 2019 figures until 2023 because of modest rate increases.

However, San Antonio has been a stable market — at least it was before the pandemic — and hotel supply and demand are generally in lockstep, Binford said. The area may bounce back faster than other major cities such as Houston, which may not recover until 2024, according to CBRE.

Few hotel projects broke ground in San Antonio this year, which is “good news,” he said.

Hotels already under construction are likely to open. But developers, their debt and equity partners, and hotel brands are reconsidering projects in

Visitors take to the River Walk last week. One industry specialist sees “lots of great reasons for leisure travelers to go to San Antonio.”