Lather yourself with sunscreen, put on a tie-die shirt, strap on some cowboy boots and head to the Texas Hill Country where Austin, Texas has quickly become the country’s new hotel boom town. This unique capital of the lonestar state quickly came into the spotlight as tech companies like Dell, Apple, IBM, Google, Facebook, and dozens more set up operations in what has become known as the “Silicon Hills.” Austin is also home to South by Southwest Festival, Austin City Limits, and the University of Texas where more than 52,000 students are enrolled each year. According to Forbes, Austin has been the fastest growing city in the U.S. for the past four years with an annual population growth rate of 2.5%, 5.8% economic growth, and an unemployment rate of just 4.9%. With all of this growth, Austin is perfectly positioned for a strong hotel business.

Currently, Austin hotels cannot keep up with the demand and are running over 78% occupancy. Downtown Austin currently has about 8,000 hotel rooms and plans to increase rooms by 50%, adding another 4,000 rooms. Construction is everywhere downtown: Condos, hotels, office buildings, mixed use projects. These aren’t small projects either. Marriott has broken ground on the corner of Congress and 2nd Street and will build a $300 million dollar JW Marriott with 1,012 rooms; the largest JW Marriott in the country. Just down the street from the Four Seasons Hotel, the Fairmont has big plans to build a 50 storey, 1,031 room hotel with over 100,000 square feet of meeting space. Real estate companies are betting big on Austin and believe that demand will surely increase.

Almost all of the new hotels will include large amounts of meeting space. The Hyatt Regency just off of South Congress is adding a 600 space parking garage and a 25,000 square foot ballroom and meeting space venue. Austin sees itself as the next major conference city and wants to compete with traditional meeting & group hubs like Orlando, Las Vegas, Atlanta, and Chicago. Austin boasts year round sunny weather, a thriving nightlife and music scene, and an ever growing and positive business climate.

For the most part, Austin has your standard mix of chain hotels. There is a growing opportunity in Austin to combine the latest trends of the hospitality industry with Austin’s unique cultural and musical identity. Existing hotels like the Driskill on 6th or the Saint Cecilia off of SoCo are good examples of “true to Austin” lodging establishments. We are pleased to see that Austin is getting a 160 room Hotel Zaza with 216 luxury residences on West Fourth Street, just next to Republic Square Park. Hotel Zaza currently has one property in Dallas and one other in Houston and has quickly become one of Texas’ premier boutique, art hotels. JMI Realty is also building a Kimpton Hotel called the Hotel Van Zandt. This 16 storey, 322 key building is located at the end of Red River St., right in the heart of the Rainey Street district. Steps from Lady Bird Lake, a minute walk to the Convention Center, and on the doorsteps of Rainey’s hip bar scene, this hotel is the perfect location for a new boutique hotel.

Although all this development and growth means thousands of jobs, millions of dollars in property taxes, and an even more bustling economy, many Austinites share a nostalgia for the old Austin: a big city with a small town feel. Austin is clearly no longer a hidden gem, but it’s fate is currently being written. If done correctly, the city stands to become a world class tourist destination with some of the most unique hotels. Large chains and corporations need to adapt so that they keep Austin weird.  

Keep Austin Weird
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