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Article by Lori Hawkins, Austin American-Statesman

A new report on Austin’s hotel performance during the first quarter of the year offers reason for hope — but also also shows that a full recovery has yet to arrive. The findings of the report from Source Strategies, a San Antonio-based hotel consulting firm that tracks the Texas market, include:

  • Occupancy for hotels in the Austin-Round Rock metro area was 64%, up 21% over the same period in 2021, but still down 17% from 2019, before the coronavirus pandemic struck.
  • The average room rate was $161, a 61% increase from 2021 and a 9% increase over 2019.
  • Revenue per available room — a key industry metric — was $103, a 100% jump from 2021 and a 9% decline from 2019. Paul Vaughn, senior vice president at Source Strategies, said the numbers suggest the Austin hotel sector is poised for a strong summer.

“Austin has been the hottest lodging market in the state for more than 10 years, and while we’re still waiting for all that demand to fully return, summer is looking good,” he said.

New projects on the way

As the hotel industry begins to emerge from the pandemic-induced downturn, Austin is being targetted by a number of luxury brands looking to enter the market.

When it comes to new hotel openings in 2022, Austin is second only to New York, according to a Lodging Econometrics report.

Of the top 50 markets in the U.S., New York is expected to have 77 hotels with 10,934 rooms, for a 9% growth rate. Austin is next with a forecast of 26 hotels with 3,387 rooms on the way, the report said.

In downtown Austin, 6,800 hotel rooms have opened since 2015, with 2,200 of those having opened in the past two years, according to commercial real estate firm CoStar Group.

The new projects come as the Austin region is experiencing exponential growth. The influx includes many high-income newcomers who are moving from more expensive housing markets and are taking jobs in Austin’s surging tech sectors, industry experts say.

Tesla and Oracle have relocated their corporate headquarters to Austin, and companies including Apple, Facebook, Google, Amazon are all expanding here.

Recently announced downtown luxury towers include the Conrad Austin and Conrad Residences Austin, a Hilton-brand hotel and condo development near the Austin Convention Center. The building is expected to be 65 stories, which would make it the second-tallest on the skyline.

“Over the past few years, there has been a huge growth in Austin with major tech brands now calling this city home,” said Brad Stein, president of project developer Intracorp Texas. “Conrad Residences Austin will serve this demand for new luxury housing and increased tourism.”

Read the full article here.