Texas Is in the Midst of a Hotel Boom

Mar 22, 2017

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Everything is bigger in Texas, including the hotel construction boom that’s sweeping the nation. According to The New York Times, the Lone Star State’s three major metro areas — Dallas-Fort Worth (DFW), Houston and Austin — have the most projected hotel openings in the country for 2017 after New York and Los Angeles.

Why the sudden explosion? It’s a perfect storm of various factors, including population surge, tax credits, tourist popularity (we’re looking at you, Austin), cheap land and a favorable business climate that prioritizes construction over environmental and zoning regulations (case in point: Houston’s unstoppable sprawl). Hotel brands are also running “asset light,” meaning they’re managing more properties without incurring the expense of real estate, since acquisition and construction gets outsourced to local companies that may be better equipped to facilitate speedy openings. STR, an industry research firm, estimates the properties slated for 2017 debuts in Texas are owned by 60 different companies.

For points hounds, this means a huge portfolio of properties is about to premier in one of the country’s biggest markets. Marriott has eight hotels planned for Austin, seven for Houston and 23 — you read that right — in the Dallas-Fort Worth area, with 92 more on deck for future development. For Hilton, the number is 72. For IHG, it’s more than 100.

Image courtesy of Aloft Dallas Love Field's Facebook page.
Texas is about to get a ton of new points hotels. Image courtesy of Aloft Dallas Love Field’s Facebook page.

With few exceptions — like Houston’s 1,000-room Marriott Marquis, complete with a Texas-shaped pool on the roof, pictured at the top of this post — these hotels aren’t standalone prestige properties. The big brands are mostly leaving that to independents like the food-centric Hotel Emma in San Antonio and swanky South Congress Hotel in Austin, and are instead following business travelers to airports, office parks and mixed-use developments, like the co-branded Aloft/Element at Dallas’ Love Field, an anchor tenant of the West Love development. In Frisco, just outside Dallas, the real estate juggernaut braggadociosly billed as the $5 Billion Mile has seven hotels planned, including ones from Langham and ZaZa, a local boutique brand, to complement its mix of retail, residences and the Cowboys’ new headquarters.

According to STR, hotel occupancy rates around the country are the highest they’ve been in the last six years, but whether the rampant development in Texas will lead to an oversaturated market remains to be seen. Two things are certain: People keep coming to Texas and the state has plenty of empty land to fill.

H/T: The New York Times

Featured image courtesy of the Marriott Marquis Houston’s Facebook page.

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