Hotel occupancy in San Antonio has experienced a significant decline, dropping 14% compared to 2019 levels, raising economic risks for the tourism-dependent city. The situation doesn't appear to be improving, prompting concerns about the future of downtown development.

Decline in Hotel Occupancy and Revenue

According to data from consultancy Source Strategies, the number of hotel room nights in San Antonio has decreased by 12.1% since the city’s 2019 tourism peak. Occupancy rates have fallen by 14.4%, even as the overall hotel supply has increased. Revenue Per Available Room (RevPAR) for the final quarter of 2025 was down nearly 9% from the previous year.

New Developments Amidst Declining Demand

Despite the downturn, several large-scale sports and entertainment districts are under development. Designated Bidders LLC is planning a $7,500-capacity minor league baseball ballpark with accompanying apartment towers and a 160-room hotel. Simultaneously, Project Marvel, anchored by a new NBA arena for the Spurs, is taking shape, with plans for at least one boutique hotel and a potential new convention center hotel.

Recently, The Monarch, a 200-room luxury hotel managed by Hilton, opened at Hemisfair, located across from the Kimpton San Anto, a 347-room luxury property that opened in 2024.

Factors Contributing to the Decline

Paul Vaughn, head of data operations for Source Strategies, attributes the decline to a combination of factors. He stated, “We did expect the year to go better… a combination of things, and I think the Trump administration has done some things that have been harmful to our local hospitality industry.”

Vaughn elaborated that Canadian boycotts of the United States and travel advisories issued by European countries are negatively impacting the hospitality sector, extending beyond hotels to restaurants, bars, and transportation services.

Impact of Remote Work and Conventions

The post-pandemic shift towards remote work and video conferencing has also played a role, as business and convention travel have not fully recovered. San Antonio had previously been a popular destination for winter conventions, but that demand has diminished.

Economic Dependence and Public Financing

San Antonio’s economy is heavily reliant on tourism, with the hospitality sector employing nearly 150,000 residents and generating a $21 billion economic impact in 2023. The city’s historical aversion to industrialization has further solidified this dependence.

Public financing for Project Marvel and the baseball ballpark relies, in part, on strong hotel occupancy rates. City spokesperson Brian Chasnoff reiterated that Project Marvel “will be paid for primarily by visitors, not local residents.”

Concerns Over Bond Repayment

Economists are expressing concerns that declining tourism revenue may jeopardize the repayment of bonds issued to fund these projects. Kennesaw State University economics professor J.C. Bradbury noted that municipalities often rely on property taxes if tourism revenue falls short, and that “most people who attend professional sports games are people who live locally in the community. There’s not a big boost in tourism at all.”

Shifting Travel Trends and Future Outlook

Andrea Baigorria, CEO of the Tourism Lab, a Miami-based consulting firm, emphasizes a shift in traveler behavior. “Travelers haven’t stopped prioritizing travel, but they’re approaching it much more intentionally and cautiously.”

Baigorria suggests that travelers are now prioritizing value-driven experiences, meaningful cultural engagements, and walkable destinations. She stated, “The issue is less about whether people are traveling and more about how destinations position themselves to meet changing expectations, preferences and value perceptions.”