San Antonio hotel market bets on group business
Key points:
- • Visit San Antonio booked 230,000 room nights in fiscal 3Q26, up 27%, while hotel RevPAR held flat at $82 through June.
- • Mario Bass says group bookings do not swing like leisure travel, and he ties more of them to a convention center expansion.
- • Austin VandeVate says hotels can no longer wait for citywide events to fill rooms, so The Gunter built its pitch around music.
October 2026 — Visit San Antonio booked 230,000 room nights in fiscal 3Q26, up 27% year over year, as the bureau pushes to add contracted group business to the San Antonio hotel market.
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San Antonio’s hotel market returned to modest demand growth in the first quarter after six consecutive quarters of decline. Source Strategies reported a 0.4% increase in demand and more than $367 million in revenue, up 2.6% year over year. Revenue per available room, or RevPAR, rose 1.6%, compared with 3% statewide.
Visit San Antonio’s fiscal Q3 summary shows a similar split: Its sales team booked 212 events, up 17% from a year earlier, while hotel occupancy through June rose 1.3% year to date and average daily rate fell 1.3%, leaving RevPAR flat at $82.
The recovery is particularly uneven downtown, where new supply includes the Monarch and Kimpton Santo. Downtown occupancy hit 63.5% in the first quarter, 15.3% below 2019. Paul Vaughn, director of data operations at Source Strategies, expects the broader San Antonio market to remain soft through 2026.
“With additional supply, occupancy is going to be lower,” Vaughn said. A lender took over the Thompson San Antonio-Riverwalk at a March foreclosure auction.
The case for group business
Group travelers make up fewer than 6 million of San Antonio’s approximately 39.2 million annual visitors, Mario Bass, president and CEO of Visit San Antonio, told Invest:. He said leisure travel accounts for most visitation but can fluctuate with economic conditions.
“Meetings and events are secured by contract,” Bass said. Visit San Antonio put more group business on the books entering 2026. “On dates with stronger group business, we saw improved occupancy and overall revenue,” he said.
Bass said the convention center’s capacity limits the additional group business Visit San Antonio can pursue. It operates at about 72% occupancy, which he called effectively maximum capacity. Visit San Antonio has identified 94 groups, worth about $1 billion in potential economic impact, that need contiguous exhibit space.
The city is studying a proposed 200,000-square-foot expansion of the Henry B. González Convention Center, which currently has approximately 514,000 square feet of contiguous exhibit space. The project would add exhibition capacity, meeting rooms, and ballroom space as part of the broader downtown Sports & Entertainment District.
City officials said in August that feasibility studies were being finalized, with findings expected to reach City Council in late October. Earlier estimates placed the expansion’s cost between $700 million and $900 million. A final construction timeline and financing package have not been confirmed.
Without an approved expansion, Bass said Visit San Antonio’s convention-center booking pace beyond 2030 has fallen by more than 50%, while the city’s Texas competitive set has increased by roughly that amount. “We do not have a choice. We have to make these investments,” Bass told Invest:.
Whether an expansion would deliver the projected economic returns remains disputed. Heywood Sanders, professor emeritus at the University of Texas at San Antonio, has questioned the reliability of convention center forecasts. Geoffrey Propheter, professor of public affairs at the University of Colorado Denver, calculated that conventions’ share of hotel room nights fell from about 12% in the late 1990s to less than 6% after the pandemic.
How one hotel responds
Austin VandeVate, general manager of The Gunter Hotel San Antonio Riverwalk, told Invest: in a recent interview that hotels cannot depend on citywide events alone. “The days of sitting back and waiting for Visit San Antonio to fill hotels with large citywide events are gone,” he said.
Bureaus across the state and country now compete for that business, VandeVate said. The Gunter spent $57 million on a renovation and joined Marriott’s Tribute Portfolio.
The Gunter has made music central to its meetings and guest experience. It added a recording studio, a speakeasy named Bar 414, and a library of more than 1,000 vinyl records. Groups have asked to open meetings in the Crystal Ballroom with music, he said.
“In this new environment, a hotel has to offer more than a meeting room and a turkey club sandwich,” VandeVate said. “There will always be a newer hotel.”
The next measures to watch are Visit San Antonio’s fiscal 4Q26 booking results, the city’s expected late-October update on convention center feasibility work and downtown occupancy. Visit San Antonio’s fiscal 4Q26 results will show whether room-night bookings keep rising. The late-October City Council briefing is expected to clarify the status of feasibility studies and potential financing for the convention center expansion. Downtown occupancy against the 63.5% posted in Q1 will show how quickly new supply fills, a process Vaughn said will take a while.
Want more? Read the Invest: San Antonio report.
