Houston Tourism and Conventions
Hotel Occupancy
While Houston has seen glimmers of hope in some economic indicators recently, hotel performance remains weak, even though Houston continues to compare favorably with the dismal nationwide picture.
Hotel performance in Houston held up well through the end of ’08, thanks to the boost from Hurricane Ike last September, which funneled repair/recovery workers and displaced residents into local hotels, temporarily sparing Houston’s hotels from the swift economic deterioration that began in that month. The key indicators of hotel performance all began to deteriorate here after the end of last year—scarcely surprising in a time when individuals have been paring discretionary spending, “staycation” has been added to the dictionary, and businesses, in an effort to improve earnings by cutting costs as revenues shrink, have vigorously pursued alternatives to business travel.
Occupancy in Houston hotels in June averaged 57.5 percent, reports PKF Consulting. That’s 12.5 points below June ’08, and it’s the lowest June occupancy figure for Houston since ’86. Excluding December, which is historically a very weak month for Houston hotels, this June posted the lowest occupancy of any month since January ’03. For the first half of the year, occupancy averaged 63.8 percent, down 6.8 points from the same period last year. Nationwide, reports STR (formerly Smith Travel Research), occupancy in the first half of ’09 fell 10.9 points to 54.6 percent.
The average room rate this June in Houston was $113.20, down 8.7 percent from June ’08. Room rates in the first half of ’09 averaged $123.73, 5.6 percent below the same period last year. STR shows that the average daily rate nationwide in the first half of this year fell 8.7 percent from the same period last year.
Revenue per available room, a handy measure that combines occupancy and average daily rate, fell to $65.10 , 25 percent below June ’08. The poor June performance put RevPAR for the year to date at $78.97, down 14.6 percent from the first half of ’08.
“The first half of 2009 was, without question, one of the most challenging the U.S. lodging industry has experienced,” said Bobby Bowers, senior vice president of operations at STR. “RevPAR [nationwide] fell nearly 19 percent—by far the largest first-half decline ever recorded by Smith Travel. While there is some evidence that industry performance has bottomed, hotel operators will continue to face harsh operating conditions—particularly from a pricing perspective—in the second half. STR is currently forecasting a total industry RevPAR decline of about 17 percent for full-year 2009.”
Average occupancy in May was 61.2 percent, down 9.9 percentage points from a year earlier, PKF Consulting reports, with all 13 submarkets posting over-the-year declines. The Texas Medical Center/Reliant Park submarket performed best, averaging 68.9 percent occupancy for the month, and none fell below 52 percent.
Average room rates declined 6.9 percent over the year. The Bay Area submarket was the sole submarket to post a gain, up 4.3 percent, and the CBD and Galleria/Uptown submarkets both remained comfortably above $150
Revenue per available room (RevPAR), a helpful measure that combines occupancy and room rate, fell 19.9 percent, with declines in all submarkets. Slippage ranged from 6.0 percent in the Bay Area submarket to 28.0 percent in Westchase.
All three indicators turned negative in January, and the over-the-year gaps have widened since then.
PKF forecasts that Houston hotels will begin to show improvement in ’10, with rents rising in ’11. However, Houston hotel rents are not expected to return to ’08 levels until ’12.
Annual Averages
Occupancy | Room Rate | Revenue Per Available Room | |
| 1999 | 63.6 | 86.92 | 55.33 |
| 2000 | 65.6 | 90.02 | 59.00 |
| 2001 | 68.9 | 90.50 | 62.49 |
2002 | 63.2 | 90.79 | 57.64 |
| 2003 | 60.4 | 85.89 | 51.97 |
| 2004 | 61.9 | 88.61 | 55.73 |
| 2005 | 69.5 | 89.57 | 62.47 |
| 2006 | 68.9 | 102.21 | 70.55 |
| 2007 | 66.7 | 119.31 | 79.76 |
| 2008 | 68.9 | 128.42 | 88.83 |
Houston Tourism
More than 31.39 million people visited the greater Houston area in 2007.
Visitors spent more than $10.7 billion in Houston in 2007, an increase of 6.3 percent over 2006.
- Accommodations - $1.76 billion
- Food and Beverage - $1.95 billion
- Ground transportation and motor fuel - $3.1 billion
- Arts, Entertainment and Recreation - $1.27 billion
- Retail Sales - $1.49 billion
In 2007, travel directly generated 119,300 jobs in Houston, with an estimated $4.6 billion in earnings.
Travel generated $255.6 million in local taxes for the city of Houston in 2007.
In 2007, more than 16.8 million hotel room nights were sold in the Houston Metropolitan Statistical Area (a 53.8 percent increase from 2006), with $1.5 billion of direct revenue to the hotels (increased 42.1 percent from 2006) and an average room rate of $90.29 (increased 2.2 percent from 2006).
60 percent of all domestic travelers to Houston are from Texas.
Kemah Boardwalk, Space Center Houston, Moody Gardens, Minute Maid Park, Schlitterbahn, Houston Zoo, the Museum of Fine Arts, Houston, Traders Village and the Houston Museum of Natural Science are among Texas’ top attractions, according to a recent survey.
Top activities for visitors to Houston include:
- Sightseeing
- Visiting attractions, particularly nightlife and amusement parks
- Nature, especially the beach and waterfront
- Cultural and historical spots—museums and performing arts in particular
- Outdoor sports, especially golf
Source: State of Texas Department of Economic Development and Tourism
Conventions and Business Travel in Houston
In 2008, Houston hosted 256 conventions, events and shows, which drew 564,826 convention delegates to the city of Houston with an economic impact of $550,140,524.
In 2007, Houston hosted 294 conventions, events and shows, which drew nearly 614,287 convention delegates to the city of Houston with an economic impact of $598,315,538, based on attendance.
Houston was among the top business travel destinations selected by USA Today's Road Warrior panel (2009).
Houston was named the fifth most affordable U.S. city for tradeshows by Tradeshow Week (2009).
Houston is listed as one of the top 25 cities for convention, conference and seminar travelers, according to the Travel Industry Association of America (TIA).
TIA also ranks Houston as a top city for general business travelers.
Sources: Destination Marketing Association International; Travel Industry Association of America; Greater Houston Convention and Visitors Bureau
Travel Statistics from Mexico7.29 million visitors from Mexico traveled to Texas in 2007, an increase of 7 percent from 2006. Houston is the top travel destination for Mexican visitors in Texas. 62 percent of all Mexican air travelers come to Houston.
Texas ranks as the second most visited state in United States by Mexican travelers after California. Florida and New York rank as No. 3 and No. 4.
Mexico consistently ranks as the No. 1 source of international visits to Texas, followed by Canada, the United Kingdom and Germany.
Travel receipts from Mexico in 2006 were more than $4.6 billion.
54 percent of Mexican travelers state their main purpose of travel to Texas as leisure/recreation and holidays. 69 percent of Mexican air travelers stay in hotels or motels. The most popular leisure activities are shopping, dining and visiting historical places.
Most of the 7,293,000 travelers from Mexico to and through Texas arrive and travel over land.
However, approximately 346,000 Mexican travelers arrived via air in 2007, spending an average
of $1,240 per trip. Total visitor expenditures for Mexican air travelers to Texas are estimated at
$429 million.
According to the Houston Airport System, 2.95 million passengers traveled between Houston and Mexico in 2008. This includes pass-through traffic at Houston’s Bush Intercontinental Airport.
Sources: Texas Office of the Governor, Economic Development and Tourism/ Research, the Houston Airport System
Cruising
The state of Texas is an expanding cruise embarkation market with the Ports of Galveston and Houston both expanding their cruise operations. With $709 million in direct spending and 13,817 jobs paying $578 million in income, Texas accounted for just under 5 percent of the industry’s national economic impact.
Texas’ two principal ports, Galveston and Houston, generated 518,000 embarkations during 2004, 6.4 percent of total U.S. cruise embarkations. The combined embarkations at the two ports during 2004 increased by 50 percent over 2003.
Tourism-related businesses, such as travel agencies, airlines, hotels, etc. received more than $280 million, approximately 40 percent of the industry’s direct expenditures in Texas in 2004.
Source: International Council of Cruise Lines
Houston’s Largest Meeting and Convention Facilities
- Reliant Park – 1.6 million square feet of total meeting space
- George R. Brown Convention Center – 1.2 million square feet of total meeting space
- The Lone Star Convention & Expo Center and The Montgomery County Fairgrounds – 191,000 square feet of total meeting space
- Galveston Island Convention Center at the San Luis Resort – 105,000 square feet of total meeting space
- Moody Gardens Hotel, Spa and Convention Center – 100,000 square feet of total meeting space
- Hilton Americas-Houston – 92,000 square feet of total meeting space
- Pasadena Convention Center and Municipal Fairgrounds – 86,200 square feet of total meeting space
- The Westin Galleria and Westin Oaks – 75,742 square feet of total meeting space
- The Woodlands Waterway Marriott Hotel & Convention Center - 70,000 square feet of total meeting space
- Hyatt Regency Houston - 64,000 square feet of total meeting space
Source: Houston Business Journal
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