United States -  San Antonio

Overview:

The San Antonio area is part of the greater south-central Texas economic base and benefits from a diverse economic base and the presence of a variety of tourism attractions. Visitors by the millions are drawn to the city's meandering San Antonio River Walk, the 18th-century Spanish missions, and, of course, the Alamo. Additionally, the Texas Hill Country is located just north of San Antonio and features a variety of resorts, which contribute to the area’s popularity as a leisure, incentive, and group destination. San Antonio also has a growing employment base and is home to a variety of industries and sectors, including high-tech research, manufacturing, defense, government, medical, and education. Although reduced activity related to the shale plays in this region has negatively affected demand growth south of the city, expansions at two of San Antonio’s five Fortune 500 companies, as well as public expansions at the San Antonio International Airport and San Antonio Convention Center, are anticipated to continue to support growth.

Over the last ten years, San Antonio has continually added new supply to the market, with two significant projects including the 1,000-room Grand Hyatt and the 1,002-room JW Marriott San Antonio Hill Country Resort & Spa. The entrance of new supply coupled with the Great Recession negatively influenced occupancy levels; however, the large presence of cyclically stable sectors, such as government/military, healthcare, and bioscience, helped to buffer San Antonio from the full impact of the national recession. Although occupancy declined in 2013 because of suppressed government and military demand associated with the sequestration and federal government shutdown, occupancy rebounded in 2014, and this occupancy level was maintained in 2015 despite the entrance of new supply. Furthermore, average rate is expected to continue trending upward, resulting in moderate RevPAR growth. New supply is forecast to enter the market at a slower rate, while demand and pricing power are anticipated to increase, particularly given the expected increase in meeting/group business due to the convention center expansion.

Hotel transactions have been steady since 2012, with roughly 40 hotel transactions amounting to over $500 million. Although 2014 was not a particularly strong transaction year, hotel sales and values climbed in 2015; transaction activity doubled and total sales more than quadrupled in 2015. Activity is anticipated to climb in the near term as local hoteliers gain pricing power and investor interest in the San Antonio market remains strong. Given the expansion of business in the city, an expected period of demand growth, and healthy metro-area economic fundamentals, hotel values are forecast to increase.

* The HVI is an index, a statistical concept reflecting a measure of the difference in the magnitude of a group of related variables compared with a base period. As such, it is a measure of broad market trends, rather than a conclusion as to the specific value of any asset, and cannot be applied to an individual asset. A good comparison is the Consumer Price Index. While this index provides a reliable measure of the overall rate of inflation in a region, it does not indicate how the price of milk has changed at your grocery store. So how can the HVI be of use to an individual investor? Although the HVI cannot tell you what a particular hotel is worth, it does provide excellent big picture data, indicating which market areas are experiencing positive trends, and thus may present good investment opportunities. The HVI for the U.S. is a measure of the strength of the lodging industry as a whole and, specifically, the hospitality investment market. The HVI for the various identified markets can provide a basis to evaluate and compare different geographic regions. For more insight on the limitations and applicability of the HVI, please read the message on the HVI home page by clicking on the graphic at the top of this page.

Valuation Trends and Predictions:

San Antonio United States
Previous Year +0% (56 of 71) +1% (49 of 71)
Growth in 2017 +1% (47 of 71) +2% (36 of 71)
Growth in next 4 years +9% (43 of 71) +12% (32 of 71)

Change In Value For Market:

San Antonio RevPar % Change

For more information, please contact:

David Bone
dbone@hvs.com
  • +1 214 629-0908 (w)