News4 San Antonio: Hotel occupancy falls while revenue rises

News4 San Antonio contacted Source Strategies for insight into the city’s hotel market, especially in connection to a proposed venue tax slated to be on the ballot in November. In the article, “Hotel occupancy falls while revenue rises“, journalist Phil Sterling interviewed Source’s Director of Data Operations Paul Vaughn to help understand the state of San Antonio downtown hotels and some of the issues involved.

A big piece of the funding puzzle for a new Spurs arena will come from a proposed increase to the venue tax. That tax on hotel rooms and rental cars is paid for by visitors to San Antonio.

“The lodging market statewide has slowed this year but in San Antonio that slowdown started earlier” said Paul Vaughn, Director of Data Operations at Source Strategies.

The latest issue of Source’s Hotel Brand Report noted that the San Antonio metro occupancy was down in the Second Quarter of 2025 compared to Q2 2024. Source provided some more detailed figures to News4SA showing that San Antonio downtown hotels noted a 7% decline in occupancy in that period, which may bring into question how this would affect the proposed venue tax.

But would lower occupancy rates have an effect on the tax money collected that would go to fund a Spurs arena? Not necessarily, since revenues are actually up with 2nd quarter revenues exceeding pre-pandemic levels.

Vaughn provided some context to help understand these numbers. When new hotels are added to a market, average occupancy will drop for each hotel until the demand catches up to this increased room supply level. the San Antonio CBD submarket has noted steadily increasing lodging revenues in the post pandemic period, exceeding pre-pandemic 2019.

“We’re seeing the demand is in the upper mid-scale, upscale, and then we got some new luxury products as well,” said Vaughn.

San Antonio has seen a net increase of 9 new hotels since 2019, giving people more options.

The President of the San Antonio Visitors Alliance provided additional understanding on how this may impact San Antonio’s “Project Marvel” downtown sports and entertainment district.

“I don’t think that will have an impact negatively on people coming to our market because they would pay that level of tax in other markets.” said Bill Brendel, president and CEO of the San Antonio Visitors Alliance.

You can read the full article, “Hotel occupancy falls while revenue rises“, and see the accompanying video on the News4Sa site.