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Residential
Texas

Dallas booked the largest hotel occupancy increase in the U.S.

Increase of nearly 6 percent over 2019

CoStar's Daryl Cronk (CoStar Group)
CoStar's Daryl Cronk (CoStar Group)

Dallas hotel occupancy has already bounced back above pre-pandemic levels, according to a new report from data firm STR, with the highest hotel occupancy increase in the U.S. measured against 2019.

The report found that Dallas saw an increase of 5.8 percent in the week of June 19 through June 25 compared to the same period in 2019, achieving a total occupancy of 74.1 percent.

STR used 2019 as a benchmark as the “pre-pandemic” era, before COVID-19 crushed the hotel sector across the nation, according to Daryl Cronk, director of hospitality market analytics at STR’s parent company CoStar Group.

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But high occupancy rates don’t necessarily mean a healthy overall market, since many hotels have filled rooms by slashing rates. A recent CBRE report found that Dallas hotels are seeing a slower overall recovery than other Texas markets — in particular, Fort Worth. Fort Worth is less reliant on corporate travel than Dallas is, so CBRE expects the Fort Worth lodging market to be “fully recovered” by the end of year, while Dallas could take until early 2023.

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In Dallas, CBRE estimates that the annualized revenue per available room (RevPar) for 2022 will be $71.49, still lagging 2019’s annual figure of $78.64, but expects RevPAR to finally tick up above that figure in 2023.

Meanwhile, in Fort Worth, CBRE predicts that RevPAR will be $71.21 in 2022, up from the 2019 figure of $68.32.

But recent increases in the sort of business-related travel that Dallas relies on could accelerate its hotels’ recovery timeline.

“What we have seen over the last couple of months is that group meeting, conventions have picked up significantly,” said Costar’s Cronk, who further explained that while group travel is still not quite back to 2019 levels, the current pace of lodging for groups overall has begun to accelerate.

“It had a very good week,” Cronk said.

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