The Company remains selective and disciplined in its pursuit to acquire assets in markets that will create long-term shareholder value. Houston’s revenue per available room growth of 13.8% in 2012 was the third highest among the top 25 U.S. lodging markets. The Central Business District (“CBD”), the submarket in which the hotels are located, is currently underrepresented with premium-branded, focused-service hotels. Therefore, the Company expects that the hotels’ affiliation with Marriott's strong reservation system and guest loyalty program, as well as their proximity to multiple demand generators, will benefit all three assets and position them for strong growth.
The hotels’ prime location in Houston’s CBD provides access to a wide variety of demand generators. While Houston is known as the energy capital of the world, its economy is well diversified. According to the Greater Houston Partnership, Houston ranks third among U.S. cities for Fortune 500 company headquarters, behind only New York and Chicago. With almost 40 million square feet of office space in the CBD housing companies within the energy, education, healthcare, and transportation sectors, corporate demand is expected to continue to drive future growth for the hotels. Furthermore, the city’s convention center, three major sporting arenas, and four performing arts companies, all located in downtown, create additional sources for group and leisure demand.
Houston serves as a major gateway for Latin America and several other countries. Houston's largest airport, the George Bush Intercontinental Airport, offers nonstop service to approximately 116 domestic destinations, 70 international destinations, and offers service to more Mexican destinations than any other airport in the United States.
Overall, Houston is expected to benefit from continued economic growth in the energy sector as well as expansion of the healthcare, distribution, and trade industries. With limited premium-branded, focused-service hotels in the submarket, as well as the implementation of new efficiencies within the complex, the Company expects that these hotels will be well positioned to outperform.