The ‘inn’ crowd: Austin braces for major hotel explosion

Jan 2, 2015
Austin Business Journal

Austin's inn crowd is very inclusive. Hotel options abound and are about to multiply — from contemporary Zen-like havens in the midst of downtown to soaring skyscrapers with floor-to-ceiling views of the city


Prices run the gamut, too. Austin's average daily room rate across the city has been escalating rapidly and edging up to the $200 mark — but some unembellished but new rooms are closing in on the $800-a-night mark


Now consider this: Some 8,649 rooms are in the development pipeline within the metro area, adding what would be a significant 28 percent increase of the current supply of 31,316 rooms, according to Lodging Econometrics, a hotel research company based in New Hampshire


Austin is in the top 10 markets for new hotel construction though markets with much larger population bases — New York and Houston, for example — lead the pack


Major national and international brands largely are responsible for the surge but plenty of quirky, boutique projects are in the works. The Central Business District will post the most significant increase of rooms


"I'd say that much construction in Austin is somewhat of an anomaly. For Austin's market size that's a significant amount of rooms," said Bobby Bowers, senior vice president of operations for STR, a hospitality research company based in Hendersonville, Tennessee


Downtown room supply could grow by more than 55 percent in the next few years — from about 8,600 rooms to more than 13,000, Lodging Econometrics data shows


Bruce Ford, senior vice president and director of global business development for Lodging Econometrics, said Austin's ramped-up construction can be tied to business basics — such as high average daily room rates, which Austin has logged for the past couple of years — and the cycles of development that follow the construction and expansion of convention centers



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