San Antonio Current: Is downtown going dark? San Antonio’s hotel occupancy has plunged, raising economic risks

The San Antonio Current has a big cover story about the plight of San Antonio’s downtown hotels. The article, Is downtown going dark? San Antonio’s hotel occupancy has plunged, raising economic risks, journalist Michael Karlis explores how declining demand is affecting the city’s critical tourism industry and how that impacts new luxury hotels and development projects like the Project Marvel downtown sports and entertainment district.

To be sure, downtown San Antonio is awash in newly built luxury hotels. 

There’s just one problem: demand is plummeting.

The Current got some blunt context from Source Strategies‘ Director of Data Operations, Paul Vaughn:

“We did expect the year [2025] to go better. It started off pretty strong in the first quarter, but a combination of things, and I think the Trump administration has done some things that have been harmful to our local hospitality industry,” Paul Vaughn, who heads data operations for hotel industry consultancy Source Strategies, told the Current. 

“You’ve got Canadians actively boycotting the United States,” Vaughn elaborated. “You’ve got European countries who are issuing travel advisories not to come to the United States. That’s across-the-board bad for our hospitality industry, and it’s not just hotels. It carries on over to restaurants, bars, transportation services and entertainment services.”

Data provided by Source Strategies illustrates the scale of the issues facing San Antonio’s hospitality sector.

The number of hotel room nights in San Antonio has plunged 12.1% since the city hit its 2019 tourism peak, according to Source Strategies’ numbers. Occupancies have dropped 14.4%, while room supply has increased.

That’s bad news for the Alamo City, where the tourism industry employs one in every eight people. Adding to the pain, the public financing for the competing downtown sports and entertainment districts — Project Marvel and the minor league ballpark — depends, in part, on hotels being full.

After all, Project Marvel “will be paid for primarily by visitors, not local residents,” city spokesperson Brian Chasnoff recently reiterated to the Current.

The question is: What if those visitors don’t come?​

The Current dives deep into San Antonio’s history to explain why the city is so tourism focused.

San Antonio’s economy has long been heavily dependent on tourism — more so than any other major Texas city.  

Not only does our hospitality sector employ nearly 150,000 residents, it had a $21 billion economic impact on the city in 2023, generating nearly $300 million in taxes and fees, according to Visit San Antonio.

San Antonio missed out on industrialization in the late 19th century, in part because it was among the last U.S. cities to be connected to the national railroad system, but also because its risk-adverse business elite held a strong disdain for labor unions, according to Pomona College professor Char Miller.

But in the post-pandemic era, conditions have changed:

Only 59% of the hotel rooms in downtown San Antonio were occupied in the final fiscal quarter of 2025, according to the most recent data available from Source Strategies. That’s a 17% drop since 2019.

Meanwhile, downtown Revenue Per Available Room, or RevPAR in the industry, for the final quarter of 2025 was down nearly 9% from a year prior. 

Vaughn said the consistent post-pandemic decline in San Antonio hotel stays largely comes down to business and convention travel never recovering due to the rise of video conferencing, remote work and Zoom during the COVID era.

“There was a nice boom, especially with leisure travel,” Vaughn said of the post-pandemic world. “What we didn’t get back to that same degree was business travel and group convention travel. San Antonio had been a really good destination for conventions, big business meetings and that kind of stuff — especially in the wintertime. That stuff has not come back as strong now.”

Karlis also looks at international travel to the Alamo City:

Trump’s draconian immigration crackdowns, which have led to the high-profiled shooting deaths of at least three U.S. citizens, have also forced many international travelers, especially Europeans, Canadians and Mexican nationals, to reconsider travel to the U.S.

That’s rough news for a city which welcomed more than 2 million international visitors in 2023.

Karlis also looks at how travel has changed post-pandemic and points toward how San Antonio’s hospitality sector needs to pivot to keep the industry healthy:

If San Antonio is stuck with tourism as an economic driver, what can it do to get visitors coming back?

A new president — one that doesn’t make the nation an inhospitable place for travelers — would be a good starting point.

However, beyond the politics, the nature of travel has shifted, Andrea Baigorria, the CEO of the Tourism Lab, a Miami-based consulting firm, told the Current.

“What we’re seeing globally is that travel demand is still very strong – but the behavior has fundamentally shifted,” Baigorria said. “Travelers haven’t stopped prioritizing travel, but they’re approaching it much more intentionally and cautiously.”

In other words, the number of travelers hasn’t necessarily changed. Rather, the market has become hyper-competitive, leaving them with more options. Beyond that, people’s priorities have shifted. 

“In 2026, people are looking for value-driven experiences. That doesn’t necessarily mean cheap – it means worth it,” Baigorria said.

Things like meaningful cultural experiences, walkable destinations that let travelers cut down on transportation costs while maximizing time to enjoy and explore, and “blesiure” — a blend of business and leisure travel — have all emerged as trends.

“This is not just about San Antonio,” Baigorria said. “Many destinations are seeing shifts in traveler behavior and stronger competition for discretionary travel spend. The issue is less about whether people are traveling and more about how destinations position themselves to meet changing expectations, preferences and value perceptions.”

It’s worth reading the full article, Is downtown going dark? San Antonio’s hotel occupancy has plunged, raising economic risks, on the San Antonio Current website.