Page 10 - NBIZ MAGAZINE December 2021

variant surge. However, hotel The Purchasing Managers Index Houston Hotel Market Forecast
brands are responding to the new rose to 57.5 in August 2021, marking The uncertainties present in the
“work from anywhere” trend by the 13 month above 50, following the world today create a challenge for
th
offering hotel packages with work drop during Covid. Anything above 45 hotel market forecasts. Therefore, the
areas and business perks to draw indicates economic expansion. Houston hotel market forecast is based
workers out of their homes. Here’s Airport Passenger Activity plum- on the following assumptions:
hoping for 2022. meted from almost 60 million passen-
p Sports Events – The fans are back gers in 2019 to almost 25 million in p Recovery from the Covid-19 pan-
and the Astros made it to the 2020, a loss of 35 million passengers. demic continues to progress.
World Series. What else do you By August 2021, airport passenger p Vaccination rates continue to
need to know? activity reached almost 28 million. increase.
p Performing Arts – Entertainment While we are still well below the 2019 p Business travel gets back on track
venues are opening their doors to level, Houston should reach pre-Covid in 2022.
attendees and should return to full levels as soon as business and conven- p Convention / Group activity is
capacity over the next year. tion activity gets back on track. strong in 2022 and reaches full
p Space Exploration – Up, up, and Convention activity is also import- capacity by 2024.
away! It is refreshing to see space ant to the Houston hotel industry. p No additional shutdowns occur.
exploration back on track. Definite bookings for Houston con-
ventions totaled about 160,000 room The Houston MSA hotel market
Overall, we are moving in the right nights in 2020, a loss of more than occupancy began to decline in March
direction with high expectations for 500,000 room nights, due to cancella- 2020 due to Covid-19, dropping from
2022 and 2023, and beyond. tions caused by Covid-19. While definite 62.7% at the end of 2019 to 41.3%
room night bookings for 2021 will total by the end of 2020, a drop of 21.4
Economic Factors more than 300,000 room nights, the occupancy points. Average Daily Rate
Houston experienced a loss of 4.9% surge in the Delta variant caused both (ADR) declined from $104.47 at the
in employment and 3.5% in GMP in Walmart and Amazon to cancel conven- end of 2019 to $81.74 at the end of
2020 due to Covid-19. The five-year tions that were booked for the Fall. On 2020, a drop of 21.8%.
economic forecast by Oxford Eco- a positive note, 2022 looks awesome on However, the market has begun to
nomics predicts a three-year recovery the books with over 600,000 definite recover in 2021. Occupancy increased
nd
period with employment and GMP of room nights booked. However, with to 52.4% at the end of the 2 quarter
2.5% and 7.0%, respectively, in 2021, the fear of Covid-19 fresh on everyone’s of 2021, an increase of 11.1 occupancy
nd
5.7% and 5.0% in 2022, and 3.0% and mind, attendance is expected to be points. Through the 2 quarter of 2021,
1.7% in 2023. Then, the forecast shows down to 60% to 70% of pre-Covid levels. ADR has increased by 3.9% to $84.93.
a return to Houston’s pre-Covid pattern Visit Houston expects conventions to be The table below shows the point
in 2024 through 2025, indicating the back to full capacity by 2024. change in occupancy and percent
return to a new level of normal during
these years.
Unemployment increased from
3.6% at the end of 2019 to 7.6% at the 2021 Hotel Performance by Type of Hotel
end of 2020, after reaching its Covid Year End 2020 Compared to Year-to-Date June 2021
peak of 14% in April 2020. It is now
heading in the right direction with a
drop to 6.1% in August 2021. Occupancy ADR RevPAR
Type of Hotel
Point Change % Change % Change
Occupancy Upper-Priced 12.8 -4.4% 36.6%

at mid-priced Mid-Priced 14.4 0.1% 37.4%
hotels has Lower-Priced 3.9 6.0% 13.7%

recovered the
most, followed Total 11.1 3.9% 31.8%

by upper-priced
hotels... Source: Kalibri Labs

10 NBIZ ■ December 2021