Hotel occupancies in Austin still down by 50%, but prices stay high for big events

Business

AUSTIN (KXAN) — Travel in Central Texas and hotel occupancies are starting to increase with big events and graduation ceremonies, but it’s not quite booming yet, according to market reports.

“I got a confirmation from booking.com, so I have an email confirmation from them, and I have a confirmation from extended-stay Arboretum,” said Casie Addison.

Addison had her stay already pre-booked this past weekend for a softball tournament when she was met with a sign at her hotel reading, “Sorry, we’re closed.”

“They closed the day prior when they sold out. They had no rooms left available but were still being sold on booking.com,” said Addison.

Addison sat in her car all night until about 7 in the morning, when booking.com ended up finding Addison another room at the Four Seasons. That last-minute room ended up costing more than $800 for one night.

“The rates are definitely a lot higher. I am not surprised she paid that kind of money for the hotel,” said Rupal Chaudhari, CFO of Homewood and Hampton Inn Suites.

Chaudhari’s hotels off Lakeline Boulevard have seen an increase in weekend stays big time, but hiring to meet that increase has been challenging. Six positions have been open at her hotels for four months.

“We actually have to sometimes put rooms out of order, because who is going to clean those rooms?” said Chaudhari.

The lack of business travel is also hitting home, according to travel experts.

“Austin revenues for the lodging market are down 46% still,” said Paul Vaughn, senior vice president for Source Strategies.

Source Strategies, a San Antonio-based hotel consulting firm that tracks the Texas market, put out a recent report that shows first-quarter lodging revenues for 2021 were also down by 31% compared to quarter one in 2020.

This continues to be the largest percentage drop of the five largest metros in Texas, according to Source Strategies.

Hotel occupancy tax collection for the City of Austin is also still down.

“What we’re missing is Monday through Thursday travel,” said Tom Noonan, president of Visit Austin. “Normally, you would get $130 million coming into the city in hotel tax. If we’re only at 50%, then we’re down about $65 million.”

Noonan doesn’t expect that number to balance out for a couple of years.

“In 2023, we’ll probably be around 80%, and in 2024, we should be kind of where we were,” said Noonan.

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