Page 18 - NBIZ October 2023

Hotel Performance by Type of Hotel
Year-End 2019 vs Year-End 2022 Year-End 2022 vs Year-To-Date June 2023
Occupancy ADR Occupancy ADR
Type of Hotel
Point Change % Change Point Change % Change
Upper-Priced -8.8 6.6% 7.7 9.3%
Mid-Priced -3.6 -1.8% 5.7 10.4%
Lower-Priced 0.0 1.7% 4.1 3.1%
Total -3.8 0.3% 5.7 10.0%
Source: Kalibri Labs

Houston Hotel Market Forecast

Houston Hotel Market Forecast 2019 2022 2023F 2024F
The tables show the point change in occupancy and
percent change in ADR for year-end 2019 compared to Occupancy 63% 60% 64% 66%
year-end 2022, and then, year-end 2022 compared to
year-to-date June 2023 by type of hotel. ADR $104 $104 $114 $118
The Houston hotel market did not fully recover RevPAR $66 $62 $73 $77
occupancy in 2022, showing a decline of -3.8 points
when compared to 2019. However, there was a Source: McCaslin Hotel Consulting, LLC
substantial increase in occupancy through mid-year
2023 of 5.7 points. This increase was strongest in the
upper-priced hotel tier at 7.7 points, followed by mid- Occupancy in Houston was still down slightly at
priced at 5.7 points, and then lower-priced hotels at 4.1 60% as of year-end 2022 when compared to 63% at year-
points. Overall, occupancy is trending upwards in 2023. end 2019. With economic factors returning to a more
Overall, Average Daily Rate (ADR) remained flat in normal pattern, occupancies will continue to recover to
2022 compared to where it was in 2019. Upper-priced 64% in 2023 and to 66% in 2024.
hotels increased the most at 6.6%, with mid-priced ADR in 2022 was back to where it was in 2019 at
hotels declining slightly at -1.8%, and lower-priced hotel $104. As economic factors continue at a stable pace,
increasing at 1.7% for overall growth of only 0.3%. ADR is estimated to bump up to $114 with the surge in
However, we are seeing a surge in ADR through mid- demand in 2023 and again to $118 in 2024.
year 2023 with an overall increase of 10.0%. Mid-priced The Houston Hotel Market continues to show its
hotels saw the largest increase at 10.4%. They were resilience as the market evolves to accommodate the
followed closely by upper-riced hotels at 9.3%, and then changing hotel demand. As for what’s next, it’s not
lower-priced hotels saw a 3.1% increase. that the market is experiencing a “new normal” per se,
Another factor that affects hotel performance is the but the factors that drive hotel demand in Houston are
amount of new supply being added to the market. There going to be different going forward. It will be exciting
were very few new hotels under construction in 2023 to watch and evaluate the Houston hotel market over
and 2024. All totaled, there are approximately 1,400 the coming years. N
new hotel rooms opening in 2023 and another 1,400 in
2024. The slowdown in new supply that will be added Patrick McCaslin, CEO, and Randy McCaslin,
over the next few years, while we see a surge in hotel President, are the Co-Founders of McCaslin Hotel
demand, is what has resulted in the market recovering Consulting, LLC. Combined, the McCaslin’s have
much sooner than anticipated. more than 50 years of professional experience in the
The forecast of the Houston MSA hotel market is hospitality industry. McCaslin Hotel Consulting, LLC
based on historical data from STR, Inc. and Kalibri offers a unique and customizable array of services in
Labs, a survey of the hotel members of the Hotel & hotel consulting including hotel market and feasibility
Lodging Association of Greater Houston (HLAGH) and studies, hotel forecasting and repositioning, hotel asset
the economic analysis described above. management and other general consulting services
The following table shows the occupancy and ADR to assist with hotel forecasting and with planning
achieved in 2019 compared to 2022. Then, we present for the future. More information can be found on
our forecast of occupancy and ADR for 2023 and 2024. McCaslinHotelConsulting.com.

18 NBIZ ■ October 2023