Plans for new hotel signal continued faith in downtown hotel sector

Building big in downtown San Antonio has always been difficult, due to its small and irregular lots, strict historic preservation rules and the unpredictability of what lay underground after centuries of human habitation. Recently, rising interest rates and the economic disruption of the COVID pandemic have added to the challenge.

It’s unclear what doomed the 18-story hotel tower the local firm REM Hospitality planned to build on a vacant lot facing Main Plaza seven years ago. A new proposal to build a 10-story, 171-room Marriott there — spearheaded by major developers from Austin and Atlanta — signals the resiliency of the downtown hotel sector in the face of those challenges.

Occupancy rates at downtown hotels have yet to recover to pre-pandemic levels. In the busy tourist month of July, the overall rate for the central business district, including the Pearl area, was 64.6%, compared with 79.3% that month in 2019, according to the analytics firm CoStar. And a fresh generation of hotels under construction threatens to inundate the market with new rooms.

Source link