San Antonio Business Journal: Downtown hotels struggle despite Final Four assist

The San Antonio Business Journal has a new article out detailing the current state of San Antonio’s lodging industry in the wake of the city successfully hosting the 2025 NCAA Final Four games in April. In the article, Downtown hotels struggle despite Final Four assist, journalist Scott Bailey leverages Source Strategies data and insights to help understand what is happening in this industry that is critical to the economy of the Alamo city.

The piece notes that even though the San Antonio downtown area saw a boost in lodging demand around the event, numbers were down overall in the Second Quarter of 2025.

Hotel operators sold 764,000 downtown hotel room nights in April through June. That’s a nearly 2% decrease from Q2 2024 and a more than 10% drop when stacked against the same period in 2019 — before the pandemic.

Occupancy in San Antonio’s downtown hotel sector fell to 61% in the second quarter of 2025. That’s a 7.4% decrease from Q2 2024 and is more than 15% behind the occupancy rate during the same quarter in 2019, according to new data provided by San Antonio-based consultant Source Strategies. 

The Business Journal goes on to quote Source Strategies Director of Data Operation Paul Vaughn for insight into the declining numbers:

“Despite big one-off events in the San Antonio downtown market … demand has been less than in 2024,” Source Strategies’ Paul Vaughn said. “San Antonio has experienced less tourist and group travel in 2025.”

The article reports on the dichotomy between shrinking lodging demand and growing hotel supply in the city center.

While demand has continued to shrink, inventory has increased. Downtown San Antonio’s room count has increased by 42.4% since 2019 and by more than 6% in the last year alone. More projects are in the development pipeline.

Vaughn provides additional context to help understand the numbers:

“New or renovated higher-tier hotels, like the Kimpton Santo, InterContinental San Antonio Riverwalk and the Plaza San Antonio have helped to keep average rates up despite the lower level of demand in San Antonio’s most important hotel market,” Vaughn said.

But he also noted that new supply has “outpaced demand in the last year plus, depressing occupancy and REVPAR growth.”

Bailey closes the article with commentary from San Antonio Visitor Alliance President and CEO Bill Brendel. He uses the figures to advocate for San Antonio’s “Project Marvel”, a downtown sports and entertainment district that “could” revitalize the CBD lodging market. Source’s Paul Vaughn warns that the rest of the year does not look promising:

“As consumers continue to face higher prices and economic uncertainty, we expect leisure travel to the Alamo city to remain challenged for the next year,” he said.

Read the full article, Downtown hotels struggle despite Final Four assist, on the San Antonio Business Journal website.