Houston Hotel Occupancy Tax Revenue Reaches Record High, With Growth Expected Through 2026

Hotel occupancy tax collections in Houston reached an all-time high in 2024, driven by strong tourism, a packed convention calendar, and continued investment in the city’s hospitality sector. New figures from local officials show that activity in early 2025 is holding steady, with projections pointing to further gains in 2026.

Record revenues fueled by returning travel

City tourism leaders report that 2024 marked the strongest year ever for hotel occupancy tax receipts. They credit major events, a rebound in business travel, and a growing slate of cultural festivals for the surge. Several large conventions filled downtown hotels throughout the year, while leisure travelers boosted bookings in surrounding districts.

Because the tax is collected from overnight stays, rising occupancy rates and higher room prices both contributed to the record total. City staff noted that hotels across multiple submarkets shared in the growth, including properties near the Texas Medical Center and along the Energy Corridor.

Early 2025 numbers remain solid

Although 2025 is only partially underway, early revenue numbers show a slight increase over the same period last year. Analysts caution that performance may vary month to month, but they say demand trends remain positive. They also expect convention business to strengthen during the second half of the year as several large gatherings return to the George R. Brown Convention Center.

Hotel operators in Midtown and downtown report that weekday bookings from corporate travelers are rising. Weekend stays driven by sporting events and concerts continue to help fill remaining rooms.

Forecast points to steady growth through 2026

Houston tourism officials project moderate but steady tax growth in 2026. Several new hotels are scheduled to open next year, and expanded airline service could draw more domestic visitors. Large events on the calendar, including national conferences and sporting showcases, are expected to keep demand strong.

While some analysts warn that economic uncertainty could affect travel budgets, current booking patterns suggest that the city’s hospitality sector will remain resilient.

Why it matters for Houston

The hotel occupancy tax plays a key role in funding tourism marketing, arts programs, and major venue improvements. Strong collections help support the Houston arts scene, enhance visitor experiences, and reduce pressure on the city’s general fund.

For local businesses, rising hotel activity brings more foot traffic, especially for restaurants, retail, and transportation providers. Workers in hospitality and service jobs also benefit from higher demand and increased hiring.

What’s next

City officials plan to release a more detailed midyear revenue update later in 2025. Hotel operators also expect to provide updated booking forecasts as new conventions finalize attendance numbers.

With new developments coming online and tourism momentum holding, the city aims to build on the record-setting gains of 2024.

This article is a summary of reporting by The Business Journals. Read the full story here.