Page 11 - NBIZ MAGAZINE December 2021

Houston Hotel Market Forecast

2020 2021 2022F 2023F 2024F 2025F

Occupancy 41% 53% 59% 62% 63% 64%

ADR $82 $86 $94 $100 $104 $107

RevPAR -47.2% 36.8% 22.3% 12.1% 5.7% 4.5%

Source: McCaslin
Hotel Consulting, LLC

change in ADR and RevPAR for year- With economic factors returning to a
end 2020 compared to year-to-date
June 2021 by type of hotel. more normal pattern, occupancies will
Occupancy at mid-priced hotels has
recovered the most, followed by up- continue to recover to 59% in 2022,
per-priced hotels and then lower-priced 62% in 2023, and stabilize at pre-Covid
(economy) hotels, which were im-
pacted the least in 2020. For Average levels at 63% in 2024 and 64% in 2025.
Daily Rate (ADR), lower-priced hotels
increased the most, with mid-priced
hotels staying flat and upper-priced
hotels continuing to decline. Overall, Greater Houston (HLAGH) and the RevPAR is a measure of profitabili-
upper-priced and mid-priced hotels economic analysis of the impact of ty for a hotel, combining the effects of
experienced about the same recovery Covid-19 described above. The above both occupancy and ADR. The result-
at approximately 37%, which is table shows the occupancy and ADR ing forecast for RevPAR shows gains
measured by Revenue Per Available for 2020 (actual) and 2021 through of 36.8% in 2021, 22.3% in 2022, and
Room (RevPAR). Lower-priced RevPAR 2025 (forecast) and the RevPAR 12.1% in 2023. Then, returning to
increased almost 14%. percent change for 2020 (actual) and more normal growth patterns of 5.7%
Another factor that affects hotel 2021 through 2025 (forecast). in 2024 and 4.5% in 2025.
performance is the amount of new Occupancy, ADR, and RevPAR hit The Covid-19 pandemic created
supply being added to the market. bottom in 2020 due to the effects of new challenges for the Houston hotel
Unfortunately, there were a lot of new Covid, as described above. However, industry. However, Houston hotels are
hotels under construction when Covid- the Houston Hotel Industry has begun on the mend and have begun their rise
19 hit. Most of these hotels continued its recovery. As indicated in the table, to pre-Covid levels. As an industry of
construction but with their opening occupancy is forecast to increase to optimists, the best is yet to come. N
dates delayed due to the pandemic. All 53% in 2021. With economic factors
totaled, there are approximately 2,200 returning to a more normal pattern, Randy McCaslin, CEO, and Patrick
new hotel rooms opening in 2021 and occupancies will continue to recover McCaslin, COO, are the Co-Founders
2,100 in 2022. The good news is that, to 59% in 2022, 62% in 2023, and of McCaslin Hotel Consulting, LLC.
once these rooms are open, very little stabilize at pre-Covid levels at 63% in Combined the McCaslin’s have
new supply will be added over the 2024 and 64% in 2025. more than 50 years of professional
next few years, allowing the market to ADR is estimated to increase to $86 experience in the hospitality industry.
recover sooner. in 2021. As economic factors become McCaslin Hotel Consulting, LLC has
The forecast of the Houston MSA more certain, ADR is estimated to created a unique array of services to
hotel market is based on historical bump up to $94 in 2022, $100 in 2023, assist with forecasting and planning
data from STR, Inc. and Kalibri Labs, to pre-Covid levels at $104 in 2024, for the challenging road ahead.
a survey of the hotel members of and then continue to increase in 2025 More information can be found on
the Hotel & Lodging Association of to $107. McCaslinHotelConsulting.com.

NBIZ ■ December 2021 11