IRR-Austin Mid-Year Viewpoint 2015 Local Market Report - Lodging
Many property sectors in the Austin area are thriving – the lodging sector included. As the capital of Texas, a center for business and industry, and with its vibrant music and cultural scene, Austin consistently generates demand for hotels. Occupancy among both full-service and limited-service hotel properties increased over the past year and is expected to continue in this direction throughout 2015. Similarly, average daily rates increased slightly and will likely continue this trend over the next year.
Overall cap rates were fairly steady over the past several quarters with a small increase among limited-service properties. Discount rates also increased slightly in the limited-service category but are anticipated to remain flat or increase very little in the second half of 2015 among all types of hotel properties. The Austin area is a hot spot for new hotel development with more than 3,500 new hotel rooms slated over the next 12 months.
A $350 million, 47-story Fairmont Hotel, located east of the Austin Convention Center with more than 1,000 rooms, is set to be completed in 2017. With an estimated opening date of late 2016, a 160-room Hotel ZaZa with 216 luxury apartments above the hotel, is under construction in Downtown Austin. Several new mixed-use developments featuring hotel space have been added recently, such as the 134-room Hotel Indigo and a 164-room Holiday Inn Express. Other new hotel developments include the Austin Westin Downtown and Hotel Van Zandt. The improving economy, business expansion, and its status as a popular cultural destination will continue to drive the expansion of the lodging sector in the Austin area.
Download the full version PDF of this Local Market Report below. It includes graphs and tables.
IRR Mid-Year Viewpoint 2015 comprises a National Overview report and 300+ two-page Local Market Reports for all key property types as well as additional resources, including metrics methodology, graphs, and tables; these free reports may be downloaded from IRR’s site here.