Report: Hotel revenues jump 10.1 percent in 3rd quarter
Dec. 5, 2017 at 11:55 p.m.
A rebounding oil and gas industry helped fuel a 10.1 percent increase in hotel revenues in the Longview area for the second and third quarters of this year, according to a new report.
Revenues increased to $9.96 million during the third quarter and the occupancy rate for hotels in the Longview area increased to 52.1 percent from 50.4 percent a year ago in the three months ended Sept. 30, industry tracker Source Strategies Inc. reported. The Longview market consists of 2,901 rooms and includes Kilgore, Gladewater and other neighboring communities.
The market is riding the tide that saw a 10.5 percent increase statewide and stronger performance in the oil patch, according to Paul Vaughn, analyst and senior vice president with Source Strategies, based in San Antonio.
The oil patch, which includes Houston, saw revenues increase 18.4 percent from a year ago while the rest of the state grew by 5 percent over the third quarter in 2016.
Room nights increased 14 percent in the oil patch while the balance of the state saw a 5.2 percent increase during the third quarter.
"Right now, you guys are having a pretty strong growth curve," Vaughn said of the Longview market. He added revenues have increased by 5.8 percent in the market since the fourth quarter of 2016.
Vaughn acknowledged the performance in the Longview market over the past two quarters contrasts with slow growth over the past decade.
"If we look at the last nine years, revenues in Longview have grown 0.2 percent," he said. "It's been very slack. If you look at the last four years, it's been flat. If you go back and look at the revenues in the end of 2015 and 2016, revenues were very low."
Vaughn said he expects positive performance in the area as long as oil prices stay at $60 per barrel.
Hotelier Kevin Hilchey, president of Longview Host Hotel Corp., said he didn't think the energy industry alone was behind the increase.
"My thoughts are that while the economy in Longview is related to oil and gas, it is not directly tied to drilling," Hilchey said. "The occupancy (rate) continues to be weak due to the great amount of supply added to the north side of Longview. Demand (also) has grown steadily over the years."
Hilchey heads a company that owns seven hotels in Texas and New Mexico, is building six more and will take over management of Comfort Suites in Longview in the near future.
Austin had the highest occupancy rate at 78 percent.