A resurgence in group travel is boosting the performance of Houston’s hotel market. Group business — bookings of 10 or more rooms — at Houston’s hotels has been growing at a faster rate than transient, or individual bookings, at the market’s high-end hotels.
Group occupancy has grown by 19.5% year to date through September, which is significantly higher than the 7% growth rate for transient occupancy. The growth rate for group business has been consistently higher all year, with one of the highest upswings in group occupancy occurring in August — a 40% improvement year over year. Higher demand and occupancy has resulted in higher average daily rates and revenue per available room from group travelers.
This is a significant improvement as 2023 is considered a year of normalizing travel patterns from the surges of 2022 in many U.S. markets. Prior to 2020, specifically 2015 to 2019, Houston hotels recorded single-digit year-over-year growth at best in group business. In some of those years, group business declined year over year.
Group business ADR outperformed transient by 1.2 percentage points year to date through September. RevPAR from group business is up 28.8% over the same period, compared to a 14.1% improvement in transient RevPAR.
Houston has marketed its ability to host large-scale corporate events and conferences, as well as its entertainment venues and direct flight ease.
This comes as legislation recently passed to use a portion of the hotel occupancy tax for major projects and improvements, providing the George R. Brown Convention Center located in Houston’s Downtown with a boost of $2 billion in funding over the next 30 years.
As of October 2023, Houston has hosted approximately 120 large-scale events across several of its hotels, including at the George R. Brown Convention Center in its central business district, with 14 more planned through the end of the year, according to Houston First Corporation.
This article originally appeared on CoStar Insight. It has been republished here with permission.