San Angelo's Hotels are Filling Up

SAN ANGELO, TX — San Angelo’s hotels and motels are filling up. That’s what data released by the San Angelo Conventions and Visitors Bureau show.

For May 2018, the latest month detailed data are available, the occupancy rate for area hotels and motels is at 67.3 percent, up from 54.4 percent for May of last year. Average revenue per room, annotated as Average Daily Revenue, or ADR, is up to $78.45 per night compared to $67.14 for May 2017.

San Angelo is realizing the benefits of being on the edge of the latest Permian Basin shale oil boom. According to Keith Dial, Senior VP of MTP Hospitality Solutions that owns and operates hotel properties throughout the west Texas region, employees from the oil field are beginning to base themselves out of San Angelo. It’s cost efficient because of the soaring room rates elsewhere. “Midland and Odessa are crazy,” Dial said. “I even recommend looking at San Angelo first because the rates in Midland are so high.”

He considers Midland/Odessa’s hospitality market as a “boom.” “Two hours extra driving is nothing in the oil business,” Dial said of workers wanting to base out of San Angelo to save by avoiding the Midland area’s high lodging costs.

In Midland, the ADR is $160.66 and Odessa it is $153.32, up from $127.12 and $125.95 respectfully in 2017. It’s harder to find a room there, too. Midland and Odessa have occupancy rates of 79.1 percent and 82.2 percent.

Big Spring motels are also in high demand. In May 2018, their occupancy rate was close to San Angelo’s at 68.6 percent, but the ADR was $120.16. As Big Spring gets more expensive, San Angelo’s lower rates make more sense, regardless of the slightly longer drive time to the drilling rigs. Big Spring’s ADR was just $83.50 a year ago and their occupancy rate was 56.6 percent in May 2017.

Only Abilene remains flat where that city’s motel occupancy rate is relatively unchanged, rising from 61.6 percent in May 2017 to 65.3 percent for May 2018. The ADR in Abilene is flat, too, sitting at around $50 since 2017.

Makala Brownfield, GM of the Fairfield Inn and Suites on Knickerbocker Rd., said the rise in San Angelo’s motel activity feels similar to the way it did in 2013, before the start of the first shale oil boom. She is the board chairwoman of the San Angelo Conventions and Tourism Bureau and said she cannot consider San Angelo’s hospitality sector in a boom just yet, and she believes the demand is more diversified than before.

“We are seeing more oil field business, but not the same volume in the previous boom. It’s getting there, but getting there a lot slower,” Brownfield said. She attributes a noticeable portion of the rise in San Angelo’s hotel occupancy to the CVB bringing in more groups, particularly sports teams and small association conference business. “We are seeing more bids come across than before,” she said.

Other indicators of economic activity are San Angelo Regional Airport – Mathis Field enplaning and deplaning data for American Airlines, the only airline serving San Angelo.

Up until May 2018, airline passenger activity was slightly down over 2017 every month. In March 2018, 4,537 boarded an airline flight, down from 4,935 in March 2017. But two months later, in May, those numbers began to turn around. In May 2018, 5,330 departed versus 5,238 departure seats in May 2017. But arrival seats are still flat at 4,787 for May 2018 versus 4,953 for May last year.

The availability of rental cars at the airport is beginning to be a challenge, according to the Hertz Renal Car manager Rock Hollenbeck. He said car rentals at Hertz at Mathis Field for May 2018 were 58 percent higher than May of last year. He estimates 80-85 percent of his customers are renting their cars for business. “It’s mostly oil field and the wind farms being built west of here,” he said. He anticipates no let up in demand. “There’s a new wind farm about to go up south of here,” Hollenbeck said. “We have an inventory challenge and demand is anticipated to remain high.”

Diann Bayes, President of the CVB, said the first indication of great economic times are rising hotel occupancy rates. “When tourism is up, the economic climate is good. People tend to travel when they are doing well financially,” Bayes said.