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The government and defense sectors are major employers for San Antonio, with Fort Sam Houston, Lackland AFB – 37th Training Wing, and Randolph Air Force Base representing primary units. In addition, San Antonio is home to five major Fortune 500 companies and a growing healthcare sector. According to the San Antonio Chamber of Commerce, one in every six San Antonio employees works in the medical industry. The San Antonio Riverwalk, The Alamo, Fiesta Texas, and SeaWorld San Antonio represent some of the main leisure attractions in the greater San Antonio area. RevPAR increased roughly 4.0% each year between 2010 and 2018, which has led to a healthy supply pipeline; furthermore, demand outpaced new supply in all but three of those years. Occupancy increased minimally in 2018, and modest ADR growth last year bolstered the market's overall RevPAR level.
San Antonio has historically enjoyed a stable economy because of the large presence of cyclically stable sectors, such as energy, government/military, and health care. Fort Sam Houston, the primary military anchor for San Antonio, has increased its activities and personnel over the last several years, concurrent with the BRAC expansion. The development of the Children's Hospital of San Antonio and the recent expansions of the University Hospital, Methodist Hospital, and Brook Army Medical Center are expected to influence the economy positively and provide new professional employment opportunities within the region; according to the Greater San Antonio Chamber of Commerce, the economic impact of the medical industry on San Antonio surpasses $40 billion annually. With the 2009 expansion of the San Antonio River Walk, the 2008 completion of the convention-headquarters hotel, and the 2016 expansion of the convention center, San Antonio's position as a tier-one convention market and a major tourist destination is expected to continue to improve.
Given the overall growth in the city and the MSA over the past several years, the entrance of new hotel supply has been modest. In 2018, four new hotels opened, representing over 600 rooms. The city will continue to experience a modest influx of new supply in 2019, including several hotels in the Central Business District (CBD) and the city's popular SeaWorld and Northwest submarkets. San Antonio is anticipated to continue to absorb this new room inventory; however, ADR growth is expected to be relatively nominal. Occupancy and average rates are forecast to increase in 2020, as the market fully absorbs the new supply and economic conditions continue to improve.
The number of San Antonio-area hotel transactions has slowed in the last several years. Nearly 20 transactions have taken place since January 2015, the most notable being the JW Marriott San Antonio Hill Country Resort & Spa selling for $610,000,000 ($608,782 per room) in August 2018. Other noteworthy sales included the TownePlace Suites by Marriott San Antonio Downtown in June 2015 for $20,500,000 ($175,214 per room) and the Hotel Valencia in April 2015 for $46,100,000 ($216,432 per room). Based on the diversity and stability of San Antonio's economic base, as well as its positioning as a top tourist destination, the market outlook is optimistic.
* 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.
The widespread impact of the coronavirus (COVID-19) has had an unprecedented impact on hotels and hotel values worldwide.
Consequently, the latest HVI analysis may no longer reflect the most current measure of lodging industry strength or the
hospitality investment market.
In each of our offices across the globe, we are working tirelessly to analyze the impact of recent events and provide timely
insights to help you navigate these uncharted waters. Because it is unclear how long the pandemic will last or how long related
restrictions will be in place, we are updating our analyses on a weekly basis using the most current data.
Additionally, examination of value trends in prior cycles can provide useful information. Historical patterns, together with
an understanding of the market’s current expectations for the eventual recovery of the industry and its performance, can provide
insights on the likely trajectory of decline and recovery for hotel values.
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ADR, Demand, Occupancy, RevPAR, and Supply Projections:
|Market Demand Change
|Hotel Occupancy Increase/Decrease
|Market Supply Growth