San Antonio Express-News (Sunday)
Local hotel occupancy, revenue rising as more vacationers check in
The hospitality industry’s pandemic-induced downturn isn’t over quite yet, but local hotel rooms are filling and tourists are returning.
The average occupancy rate at San Antonio hotels was 62.3 percent in October, slightly lower than the 63.5 percent during the same month in 2019, according to STR, a data firm that tracks the hospitality industry.
Occupancy was down about 3.1 percentage points in September and 6.6 percentage points in August from two years ago. During the same stretch in 2020, amid the throes of COVID-19, rates hovered in the 40s.
“Hotel occupancy continues to lag pre-pandemic levels, but not for lack of leisure visitors,” said Chelsea McCready, senior director of hospitality market analytics at CoStar Group, which owns STR.
Those visitors helped prop up the average daily rate at local hotels, which was $115.17 in October.
After an economic downturn, hotel occupancy usually rebounds before the average daily rate. But the reverse is occurring in San Antonio because of demand from day-trippers and vacationers, McCready said.
Hotel operators’ revenue is also rising, reaching a total of $106.3 million last month, com
pared with nearly $53 million in October 2020 and $105.6 million in October 2019.
Revenue per available room — a key measure of a hotel’s performance — has outpaced levels nationwide since May.
About 1,500 hotel rooms are under construction in San Antonio and surrounding cities; that’s about 3.4 percent of the area’s existing supply.
That includes an AC Hotel by Marriott and an Element Hotel by Westin, which are slated to open in the former Riverview Towers
office building downtown, and stayAPT Suites’ apartment-style extended-stay hotel near Joint Base San Antonio-Lackland.
“Supply growth in San Antonio has been slower than the national average and peer markets in recent years, but the tide seems to be turning,” McCready said.
Most of those properties — 11 hotels with 1,200 rooms — are expected to be completed in 2022.
Developers broke ground on seven of those projects during the pandemic, a sign they “believe
in the medium- to long-term recovery of the San Antonio hospitality market despite the impact of the pandemic on the travel industry,” McCready said.
“If construction timelines go according to plan, it will be the first time we’ve seen over 1,000 rooms open in San Antonio since 2010,” McCready added.
Of course, the industry isn’t out of the woods yet — particularly when it comes to conventions and business travel, which were decimated by travel shutdowns and safety concerns.
“Room blocks associated with conventions and conferences accounted for about a third of total rooms sold in San Antonio before the pandemic, and these events have been slower to return than leisure visitors,” McCready said.
Texas’ hotel industry is expected to end the year down $4.1 billion in business travel revenue compared with 2019, according to the American Hotel & Lodging Association.
The trade group does not anticipate receipts from business travel to return to pre-pandemic levels until 2024.
“Business travel is critical to our industry’s viability, especially in the fall and winter months when leisure travel normally begins to decline,” Chip Rogers, president and CEO of AHLA, said in a statement supporting the Save Hotel Jobs Act. “Continued COVID-19 concerns among travelers will only exacerbate these challenges.”
Marc Anderson, CEO of Visit San Antonio, told the City Council last fall that he, too, doesn’t expect visitor levels year-round to bounce back until then.
The public-private nonprofit, which is funded primarily by a tax on hotel rooms, is trying to convince meeting organizers to book conventions here.
One example: Visit San Antonio plans to spend at least $5.8 million — which appears to be a record amount — to attract the U.S. Travel Association’s annual conference in 2023. An estimated 6,000 meeting planners, travel agents, tour operators and travel journalists will attend the event.