Some Houston Submarkets Feeling Hotel Pain

An oil slump and over-supply have hit some of Houston’s hotel submarkets hard. The downtown market, for example, has experienced somewhat of a downturn in hotel occupancy, according to CBRE’s Randy McCaslin.

In a recent presentation to the Hotel and Lodging Association of Greater Houston, McCaslin indicated that the CBD’s occupancy dropped 7.6%, though the average daily rate (ADR) only slipped by 1.3%. The submarket is expecting more hotel deliveries within the next year.

McCaslin went on to say that east Houston and Baytown experienced a hit, with a 10.2% drop in occupancy between 2Q 2015 and 2Q 2016. He surmised that oil and gas companies in the submarket stopped flying non-Houston employees to the area for training. The Galveston submarket has the most positive outlook through 2017, with occupancy at 61% and ADR at $120.

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