SAN ANTONIO – The San Antonio hotel market is demonstrating strong fundamentals that are attracting investors.
“With Houston’s market still in decline, and the Austin and Dallas-Fort Worth markets flattening out due to large hotel room supply increase, San Antonio is becoming a more attractive destination in Texas for hotel investors. A very small new hotel room supply pipeline and increasing hotel demand will help drive hotel RevPAR growth for the next few years,” said Michael Yu, senior vice president, CBRE Hotels.
By year-end 2017, San Antonio hotels are forecast to see a revenue per available room (RevPAR) increase of 3.9 percent, more than the national projection of 3.0 percent, according to data from CBRE Hotels’ Americas Research.
The RevPAR increase is the result of an estimated 1.3 percent occupancy increase and a 2.6 percent gain in average daily room rates (ADR), according to CBRE Hotels’ Americas Research. San Antonio market occupancy rate levels are forecast to range from 62.4 percent for lower-priced hotels to 70.2 percent for upper-priced hotels in 2017.
Domestic and international investors are taking notice. CBRE Hotels recently arranged the following San Antonio-area hotel sales on behalf of the sellers:
- Los Angeles-based Continental Asset Management LLC purchased Home2 Suites San Antonio, a 111-key full service hotel at 94 NE Interstate Loop 410 from Baywood Hotels.
- A confidential buyer from San Francisco purchased the Country Inn & Suites Lackland, a 74-key limited service hotel at 6502 Old Highway 90 W from SATY AM, Inc.
- Toronto-based LD Hospitality, LLC purchased the Courtyard by Marriott San Antonio Sea World, a 96-key full service hotel at 6738 NW Loop 410 from Baywood Hotels.
“San Antonio’s new room supply will increase by only 1.9 percent over the next 12 months, which is well below the long-term average of approximately 3.1 percent. Buyers can see that demand has caught up to supply. The Alamo City has a diversified base of business drivers and should have higher growth than many other Texas markets moving forward,” said Dennis Drake, senior associate, CBRE Hotels.