Hotel Feasibility Study in the Austin-Round Rock-San Marcos, TX Metro Area

The largest hotel tickets in this part of Texas

Hotel lending in the Austin-Round Rock-San Marcos area is defined by scale. SBA approved 62 hotel and motel loans worth $201.6 million between FY2017 and FY2026, and the median loan of $3.4 million is 1.58x the national median for the class, the figure that most separates this cell from the state and nation. Yet hotels are not common here by share: the location quotient is 0.64x, the class is 9 of 39 in the metro while the metro itself is 24 of 807 for hotel loans. Few loans, very large ones.

Programs, brands and the leading CDC

Loans in the middle half range from $2.7 million to $4.5 million. The program split is 50 loans for 7(a) and 12 for 504, the latter a natural fit for property purchases. Flagged franchise units make up 79.0% of loans. Capital Certified Development Corporation leads the certified development companies with 5 loans worth $16.4 million. SBA keeps these entries as records of loans held, which is all they are. County counts show the geography: Travis County has 27 loans, Williamson County 18 and Hays County 11.

Counts that clear the disclosure threshold: 11 loans in FY2017 ($32.0 million), 5 in FY2018 ($15.4 million), 6 in FY2020 ($19.2 million), 9 in FY2021 ($29.5 million), 12 in FY2025 ($31.9 million) and 8 in FY2026 ($32.0 million). FY2019, FY2022, FY2023 and FY2024 sit below the disclosure threshold, and the charge-off rate is held back too. Cancellation after approval struck 14.3% of approvals made in FY2017 to FY2024 at minimum, and a stricter count of undisbursed loans lands on 14.3% again. Resorts and roadside motels share one NAICS grouping here, so the rows blend very different properties. The metro boundary is the 2023 county grouping, applied to each loan's project county.

Justifying an Austin hotel request

Any hotel proposal here must justify a ticket that runs well above the national middle. It has to separate the sources of room demand and test them against the competitive set for rate and occupancy. Construction or acquisition cost per room, brand fees and required improvements all need explicit treatment, as does debt service coverage during a slow ramp-up. Where a 504 loan carries the real estate, the study should show how the building and the operating business are valued separately. Cancellation near the stated floor suggests that timelines for entitlement and construction deserve a plain schedule. None of this implies an approval.