San Antonio Business Journal: Downtown SA takes hit as more hotel rooms sit empty

The San Antonio Business Journal has an article detailing the state of San Antonio’s downtown hotel market, informed by data from Source Strategies. In the article, Downtown SA takes hit as more hotel rooms sit empty, journalist Scott Bailey highlights the uncertainty in San Antonio’s most important hotel sector amid a challenging demand environment and new hotels entering the market.

The story sets up the issues facing San Antonio’s densest hotel scene:

Amid efforts to draw more locals to downtown, one of the city’s more critical industries is facing economic uncertainties that have impacted visitation, leaving more center-city hotel rooms empty.

San Antonio’s downtown hotel sector saw declines in several key metrics in the fourth quarter of 2025, including revenue per available room (REVPAR), which was down nearly 9% from the same quarter the previous year, to just over $118, according to data obtained from industry consultant Source Strategies.

The Business Journal sought out insight from the Source Strategies team:

Despite the red flags, developers continue to build or pursue new projects that could compound the challenge existing investors and operators now face.

Source Strategies’ Paul Vaughn said 2025 started off on a positive note, but ultimately “turned into a rough year for the hospitality business in the United States, Texas, and San Antonio.”

Source Strategies’ Director of Data Operations, Paul Vaughn, provided additional context to help understand the numbers:

Multiple factors have impacted demand, including international travel concerns. Vaughn points to tariff policies, for example, which he says have alienated other countries and affected the buying power of potential domestic visitors.

“Economic uncertainty and diminished regional and international travel have not been good for our market,” Vaughn told me. “Several countries are actively boycotting U.S. travel and others have issued travel advisories for those planning to visit the U.S.”

Bailey also got additional perspective from San Antonio Visitor Alliance President and CEO Bill Brendel:

But the overall downtown hotel market could continue to face challenges. Brendel notes that it’s been a while since Alamo City operators have been able to sustain high occupancies and optimal profitability.

“Many are desperate for those times to return,” he said. 

The article concludes with a cautionary note:

Vaughn said there is an expectation that demand will increase over the next several months, but occupancy rates and REVPAR could be flat as the market absorbs more rooms.

That could all change, Vaughn warned, with prolonged increases in energy and airline prices. 

“There is a lot of uncertainty at the moment and that is not good for the hospitality business,” Vaughn said.

Read the full article, Downtown SA takes hit as more hotel rooms sit empty, on the San Antonio Business Journal website.