Negotiation Game: Austin, Texas, is one of the most potent magnets for corporate relocation in the United States. In fact, the 81 companies that moved their headquarters to Austin from 2018 to 2024 were the second-highest total of any metropolitan area in the country, according to commercial real estate services firm CBRE, behind only fellow Texas locale Dallas-Fort Worth. This year, that has continued with the relocation of semiconductor firm Tokyo Electron U.S. and financial services form Peak6 Investments to the Texas capital.
But the influx of potential corporate demand isn't translating to more inbound travelers or higher hotel rates, at least in 2025, thanks in part to the long-term closing (and demolition and reconstruction) of the Austin Convention Center and a continuing influx of new hotel supply.
Nearly 11,000 hotel rooms have been added in Austin since 2019, according to CoStar, the parent company of hotel analytics firm STR. And more are coming: Austin at the end of the second quarter had 125 projects totaling 14,600 rooms in its hotel development pipeline, according to Lodging Econometrics, the former figure the fourth-highest in the United States.
Volume has softened throughout the year in a macroeconomic environment that challenged business travel demand throughout the United States. The city's 2025 revenue per available hotel room through August declined 6 percent year over year, according to CoStar. Total inbound passengers at Austin-Bergstrom International Airport in 2025 through September declined 2.5 percent year over year (although they increased 4.2 percent in September itself).
The Approach: The influx of supply without the commensurate increase in demand is starting to be reflected in BTN's Corporate Travel Index. Austin's average CTI hotel cost, which represents aggregated hotel rates booked by corporates in multiple tiers, was $196, a figure down from $220 in the third quarter of 2024. That represents an 11 percent year-year-over year decline, far larger that the aggregate 1 percent decline in third-quarter hotel rates by the 100 tabulated U.S. cities as a whole.
Austin's overall Q3 CTI total cost was $344, down 2.9 percent quarter over quarter and 6 percent year over year, compared with the overall Q3 CTI U.S. total cost of $350, which was down 2.1 percent quarter over quarter and up less than 1 percent year over year.
Those figures underscore the possibility of a favorable Austin negotiating market for buyers, but keep in mind that despite the closure of the convention center, the city in 2026 remains set to host major business and sporting events like the SXSW conference and show, along with Grand Prix and NASCAR races along with a new PGA Tour golf tournament.
Keep in Mind: Despite the decline in air passenger count this year, Austin is a competitive airline market, particularly between Southwest Airlines, which has the largest footprint at Austin-Bergstrom International Airport, and Delta Air Lines. Southwest CEO Bob Jordan in August told the Austin Business Journal that the carrier could "make Austin the largest airport and largest service we have in the whole state of Texas." Both carriers are launching new service at the airport, with Delta this month adding flights to Denver and Miami and Southwest adding Jacksonville, Fla., and Palm Springs, Calif., service but ending flights to Chicago O'Hare, according to Austin's KUT News.
What's Happening in Austin
The Austin Convention Center, which opened in 1992, closed in April with demolition completed last month. Construction is set to begin in December with a planned opening date in the spring of 2029. The new Austin Convention Center will be much larger, with 620,000 square feet of rentable space compared with the former 350,000 square feet. A 2 percent increase in Austin's hotel occupancy tax, approved in 2019, will help to fund the $1.6 billion project.
Hotels that have opened in the past two years include Downright Austin, a 367-room downtown property that is part of Marriott International's upper upscale Renaissance Hotels portfolio. The property is the rebranded and renovated former Sheraton Austin Hotel at the Capitol. The 80-room Atwell Suites Austin Airport opened in March 2024. The all-suites property is one of six U.S. hotels under IHG Hotels & Resorts' upper midscale Atwell brand, which it introduced in 2022.
Planned hotel openings include 1 Hotel Austin, a downtown 251-room luxury lifestyle hotel in a 74-story mixed use development which its developer says will be the tallest tower in Texas. That hotel is slated to begin accepting bookings in 2026. Other planned projects include the 123-room Element North Austin Tech Ridge, part of Marriott's extended-stay portfolio, set to open in December 2025, and the Hotel Trinity, a 258-room downtown luxury hotel set to be part of Marriott's Autograph Collection and debut in late 2026.