Hotel Emma in Pearl ranked sixth among the top 100 hotels in the state based on revenue per available room in the first quarter of 2026, according to Source Strategies.
After six continuous quarters of declining demand, San Antonio hotels found their footing again in the first quarter of 2026.
In the first three months of the year, hotel demand finally swung up, producing a 0.4% gain compared with the same time last year, according to a recent report from local hotel consulting firm Source Strategies. Revenue also totaled more than $367 million for a 2.6% increase year-over-year — the third-highest increase among major metros in the state.
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“Hopefully, events like the current NBA Finals will be a nice little boost, especially with all those New York fans coming to our hotels; appreciate that,” said Paul Vaughn, director of data operations at Source Strategies.
Texas hotels as a whole had a 3% year-over-year boost in revenue per available room — a key measure of hotel performance. San Antonio saw a 1.6% increase this past quarter compared with last year. Several small markets, including Abilene and Amarillo, saw a spike in demand and revenue due to ongoing construction on data centers supporting artificial intelligence.
Austin and Dallas were the only major metros that saw a decline in revenue. Austin had a 5.2% decrease compared with the first quarter of 2025, while Dallas saw a 2.8% drop. The Austin Convention Center is temporarily closed while it’s being rebuilt for a 2029 opening, which has been a big hit to the downtown market.
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Although San Antonio posted an increase, it’s still not where it was before the pandemic.
Since 2020, San Antonio has been struggling with a drop in visitor demand due to the pandemic-induced slowdown in convention business — the city’s traditional tourism backbone — and the more recent declines in both domestic leisure travel, blamed on high inflation, and in international visitors, attributed to the Trump administration’s immigration policies and rhetoric.
Vaughn said the increase in traffic this year could be a result of more visitors during spring break, as well as a pickup of activity in the Central Business District and the areas around SeaWorld and Joint Base San Antonio-Lackland.
The Monarch hotel is one of several luxury hotels that have opened in recent years in the downtown market.
Rising above downtown challenges
The downtown area, especially, has had a glut of new supply that the city is still slowly absorbing. In the past few years, several luxury hotels have opened their doors, including the Monarch, the Kimpton Santo San Antonio-Riverwalk, the Plaza San Antonio Hotel & Spa and the InterContinental San Antonio Riverwalk. And more are on their way in anticipation of upcoming developments, such as Project Marvel.
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The yearslong lull in tourism put pressure on downtown properties, as evidenced by Sonesta ES Suites’ ongoing conversion into an extended-stay hotel, as well as March’s foreclosure sale of the Thompson San Antonio-Riverwalk, a 20-story luxury hotel that opened in 2021. Owner DC Partners previously said the Thompson property had been pummeled by high interest rates and increasing competition from the growing number of hotel rooms.
The downtown submarket’s occupancy rate in the first quarter of 2026 hit 63.5%, a 15.3% decline from 2019 but a 4.4% year-over-year increase.
“With additional supply, occupancy is going to be lower,” Vaughn said. “It’s going to take a while for the demand to ramp up to this new supply, and it will put pressure on some of the existing hotels because in the hotel business, generally new hotels are more attractive for visitors.”
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Despite the ongoing challenges, developers and hoteliers are still confident in the long-term future of downtown San Antonio. In the first quarter, the market saw a 7% increase in total revenue compared with the same time last year.
A rendering shows the upcoming lobby transformation for Sítio El Tropicano, which Trestle Studio plans to reopen in the fall.
Real estate investment firm Trestle Studio teamed up with Sopris Capital and the Town Lake Co. to invest in the market by purchasing the shuttered El Tropicano in 2023. The group plans to reopen the historic River Walk hotel after completing extensive renovations this year, likely in time to benefit from the market’s recovery.
“Luxury hotels were something we were undersupplied in, and it’s something are market has needed,” Vaughn said.
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Hotel Emma within San Antonio’s Pearl ranked No. 6 among the top 100 hotels in the state for revenue per available room in the first quarter, according to Source Strategies. It earned $488.20 in revenue per available room, a $64 increase from the same time last year.
Also on the list: Mokara Hotel & Spa, located downtown (No. 37); Signia by Hilton La Cantera Resort & Spa on the far Northwest Side (No. 57); JW Marriott San Antonio Hill Country Resort & Spa on the far Northeast Side (No. 65); and Hyatt Regency Hill Country Resort and Villas on the Northwest Side (No. 82).
Future of San Antonio tourism
Despite the first-quarter increase and the expected boost from the Spurs’ playoff run,
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“The people investing money into this market are expressing confidence, so we do expect it to turn around, but it may take a bit of time and more than we’d like,” he added.
The Western Conference finals against the Oklahoma City Thunder and NBA Finals against the Knicks already have generated a wave of new tourism to the city, and the Henry B. González Convention Center’s upcoming schedule could carry over more activity into 2027. This reinforces the need for a downtown entertainment district, which will bring in even more pedestrian traffic and business, Vaughn said.
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“Clearly, we saw from the first two games of the NBA Finals that there were a lot of Knicks fans in town, since it’s much cheaper to fly to San Antonio, get a Spurs ticket, stay at a nice hotel and dine at our restaurants than to just buy one ticket for Madison Square Garden,” he added. “We’ll definitely see a nice spur to our economy there — no pun intended.”
