Hotel revenue growth in Texas slows

Houston experienced significant revenue declines during the third quarter. Photo credit: Pixabay/12019

Hotel revenue growth in Texas slowed to 4.7 percent during the third quarter of this year compared to 2017, when revenue hit double-digit gains. Data shows a softening of demand, especially in oil and gas production areas of Texas, according to hotel data collection firm for the state, Source Strategies. Additionally, revenue has seen a sharp decline in areas that experienced a performance spike due to last year’s hurricanes.

“After Hurricane Harvey hit in late August of 2017, some hotels were taken out of service and are slowly filtering back into the market,” said Paul Vaughn, SVP of Source Strategies. “Many summer tourism-dependent properties in Corpus Christi, Port Aransas and Rockport are still not back online. Combined with the falloff from last year’s demand spike, this led to significant revenue declines in Houston, Beaumont and Corpus Christi.”

Related Story: 10 places to buy, sell hotels in the U.S.

High crude oil prices also have continued to affect markets in oil-patch markets of West Texas, according to the data. With sustained high crude oil prices through the third quarter, revenue in the top 100 oil- and gas-producing counties rose 3.3 percent compared to the same time period last year, while demand slipped 0.8 percent when measured by roomnights sold. This follows four consecutive quarters averaging demand increases of more than 15 percent in these areas.

Virtual Event

Hotel Optimization Part 3 | January 27, 2021

With 2020 behind us and widespread vaccine distribution on the horizon, the second half of the new year is looking up, but for Q1 (and most likely well into Q2) we’re very much still in the thick of what has undeniably been the lowest point of the pandemic. What can you be doing now to power through and set yourself up for a prosperous 2021 and beyond? Join us at Part 3 of Hotel Optimization – A Virtual Event on January 27 from 10am – 1:05pm ET for expert panels focused on getting you back to profitability.

“Oil-patch lodging markets have thrived with crude oil prices over $70 in the third quarter,” said Todd Walker, president of Source Strategies. “Drastically lower oil prices in October and November are early warning signs of a possible turnaround to the current boom. Other major metros in the state, save Houston, are still experiencing solid performance gains.”

Non-oil markets generally fared well during the third quarter. Austin-Round Rock revenue rose 8.9 percent; Fort Worth was up 6 percent; San Antonio increased 5.9 percent; and Dallas gained 3.7 percent. Of the smaller metros, Brownsville-Harlingen saw revenue increase 14.6 percent, followed by El Paso (+12.2 percent) and Abilene (+12 percent).


Third Quarter


          Total Revenue (000s)


Metropolitan Areas

% Market



 % Change

% Occ



Dallas-Fort Worth-Arlington
















Austin-Round Rock








San Antonio








Non-Metro Areas








Corpus Christi








Midland & Odessa








Balance of Texas








Total State of Texas








Source: Source Strategies


A Look at Occupancy

When looking at the data statewide, occupancy during the third quarter hit 63.6 percent, which was a decline from 2017’s third-quarter occupancy of 65.5 percent.

The Midland area of Texas had the highest occupancy during the third quarter at 75.9 percent. Odessa followed with 74.9 percent. Waco took the third spot at 73.1 percent, followed by Austin-Round Rock’s 71.7 percent. Fort Worth-Arlington, El Paso, Lubbock, San Antonio and Dallas were all above the state average.

Related Story: U.S. occupancy falls during third quarter, but what does it mean?

The western part of Texas held the largest occupancy point increases during the third quarter, according to Source Strategies. San Angelo led with a 9.7-point increase from the third quarter of 2017 to 57.1 percent occupancy. Considerable gains also were noted in Odessa (+7.2 points), El Paso (+6.6 points to 67.1 percent), Midland (+6.6 points) and Abilene (+5.4 points to 57.9 percent).