San Antonio hotel activity rebounds, but still hasn’t returned to pre-2019 pandemic levels

San Antonio’s hospitality industry is still emerging from the hole caused by the coronavirus pandemic, but spring break revelers helped push March to a record high.

The rebound comes with the projected construction of hotel rooms at the highest level in a decade.

Average occupancy in the first three months of this year was 60.6%, according to STR, a data company that tracks the hospitality industry.

This figure was up from 49.9 in the same period in 2021 and 54% in 2020 – but still below 66.4% in the first quarter of 2019.

“San Antonio hotels continue to recover from the effects of the pandemic,” said Daryl Cronk, director of hotel analytics, south, at CoStar Group.

Day-trippers and vacationers have been driving the industry’s rebound so far, and spring break travelers provided a welcome boost in March.

The average daily rate at hotels hit $144.60 in March alone, the highest monthly rate on record. The occupancy rate for the month was 72.6%, the highest since last summer.

“Spring break leisure travel was the main driver of demand,” Cronk said. “But it was encouraging to see that weekday occupancy and group occupancy in March reached their highest levels of the pandemic, suggesting that the recovery in business travel is gaining momentum.”

Hoteliers generated $321.7 million in revenue in the first quarter, down from $187.5 million a year earlier and $253.9 million two years ago, but still trailing $335.6 million dollars three years ago.

In March, unemployment in San Antonio’s leisure and hospitality industry — which employs up to 13% of the city’s workforce — fell for the first time since February 2021.

Renderings of renovations to the Marriott Plaza Hotel, which will be known as The Otis Hotel San Antonio when it reopens.

Courtesy of White Lodging

While there were 600 fewer employees in March, the sector had almost rebounded from lows in the spring of 2020, at the start of the pandemic.

The spread of the omicron variant slowed business in January at the downtown Valencia Hotel, but February and March were “incredible months,” said Stacy Seaborn, director of sales and marketing.

“If omicron hadn’t happened, January, February and March would have just been a banner quarter,” she said.

Leisure and business travelers are both returning, although there isn’t as much pent-up demand as there used to be, Seaborn said. Congress activity is still lagging behind.

As COVID-19 has less of an impact, staffing and returning flight routes to San Antonio International Airport are ongoing challenges.

“We’re going to continue to be a Tier 2 city until we start getting more direct flights from major cities,” Seaborn said.

Cronk said the coming months could be busy.

“Leisure travel continues to do well, business travel is improving and international travel is slowly rebounding since U.S. border restrictions eased last November,” he said.

Business travelers and convention attendees have been slower to return than vacationers. By early March, Visit San Antonio, which markets the city to convention organizers, had booked 327 meetings for 2022 with about 460,664 attendees.

This is well below the 526 events with 574,842 attendees the organization forecast in 2019, but an increase from 231 events with 242,979 attendees in 2021 and 160 events with 183,971 attendees in 2020.

Statewide, the hotel industry is expected to end the year with about $1.2 billion in business travel revenue, 18.1% below 2019 levels, according to a report from American Hotel. & Lodging Association.

Still, it is not among the 10 states expected to end the year with the largest percentage declines. This list includes Wyoming, the District of Columbia, New York, and Massachusetts.

“While declining COVID-19 case counts and easing of CDC guidelines provide a sense of optimism for travel recovery, this report underscores how difficult it will be for many hotels and hotel employees to hotels to recover from years of lost revenue,” said Chip Rogers, president. and CEO of the Industry Trade Group.

In San Antonio, the pipeline of hotels under construction is growing. About 1,432 hotel rooms are expected to be built this year, the highest number to be added in a year in the past decade.

The Bricton Group and Gettys Group Cos. of Chicago recently reopened a former Holiday Inn at 77 NE Loop 410 as a Marriott hotel after extensive renovations.

Another company, Merrillville, Indiana-based White Lodging, recently resumed plans to renovate the Marriott Plaza hotel across from downtown Hemisfair.

After renovations that will include upgrading guest rooms and meeting rooms and adding a restaurant and bar, the 251-room hotel is set to reopen in 2023 as Otis Hotel San Antonio. .

“The start of this important project reinforces the confidence we have in San Antonio as a destination and the recovery of the hotel industry,” said Jean-Luc Barone, CEO of hotel management, in a press release.

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