Austin hotel revenue fell 5.9% in the first quarter, lagging every other major Texas metro, as occupancy and revenue both declined. Source Strategies reports that the loss of the Austin Convention Center has increasingly depressed room demand.
That pushed revenue down 5.9% from the same period a year ago, even with South by Southwest falling in the first quarter. Statewide, revenue was up 2.9%. Houston led major metros with an 8% gain, while Fort Worth was up 3.4% and San Antonio 1.6%. Dallas slipped 2.8%.
For the January-March period, total revenue for hotels in the Austin metro was $514.12 million. While down 3.6% from 2025, it was up nearly 29% from pre-pandemic 2019. Occupancy declined 3.3% from a year ago and nearly 19% from 2019.
Among the state’s other major hotel markets, Houston's industry-leading performance was attributed to strong oil and gas activity and major events. The gain in Fort Worth-Arlington was driven largely by higher occupancy. San Antonio’s revenue increase came as the city’s hotels recorded a 2.1% increase in average daily rates.
Some of the state’s strongest hotel demand has been tied to artificial intelligence data center construction in smaller markets like Abilene, Childress, Snyder and Corsicana. Texas recently surpassed Virginia as the top data center market in the world.