Houston hotel future positive; but oil downturn tests demandHouston hotel future positive; but oil downturn tests demandhttps://www.recenter.tamu.edu/news/newstalk-texas/?Item=4662015-07-07T08:33:00Z2015-07-07T00:00:00Z

HOUSTON - The collapse in oil prices is putting a slight damper on the local hotel market at a time when the supply of new properties is ramping up, but industry experts expect the softness will be short-lived.

Hotel occupancy fell to 69.1 percent during first quarter 2015, down 1 percent from a year earlier.

Rate and occupancy growth has started to flatten out or decline in some areas, but "the future looks reasonably stable," said fellow speaker Bruce Walker of hotel consulting firm Source Strategies.

While downtown hotels may soften a bit this year, the city center remains very healthy with just under 70 percent occupancy.

Across the Houston area, 7,000 hotel rooms are under construction, and another 10,666 are planned.

While the other big Texas markets are doing well, the Rio Grande Valley is a "hidden gem" that's been "overlooked by nearly everybody" said Michael Yu, first vice president of investments for Michael & Millichap.

Click Houston NewsTalk, Houston Market Research.

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