Airport hotel sees increased revenue, many staff vacancies

The Hilton hotel at Austin-Bergstrom International Airport has experienced better-than-expected recovery since the early days of the Covid-19 pandemic and repaid the loan it received from the airport in 2021.

Members of the City Council Audit and Finance Committee heard the news from Rajeev Thomas and Tracy Thompson at the committee’s meeting on Tuesday. Thomas is Austin-Bergstrom International Airport’s deputy chief for finance, and Thompson has two titles – chief officer for administrative and external affairs for the airport, as well as vice president for Austin-Bergstrom Landhost Enterprises, Inc. (ABLE), which oversees the hotel.

Like many other hotels, the airport Hilton saw its occupancy drop from 80 percent in 2019 to 33 percent in 2020 as the pandemic took its toll on travel-related businesses. But Thomas reported that occupancy rose to 82 percent in 2022. Revenue per available room rose to $135 on average; in 2020, it was $40.

That increase was somewhat less than had been projected but still enough to allow ABLE to repay its loan with interest. That loan for $1,350,000, which came from the airport and not the city’s General Fund, was repaid in April, Thomas said.

Thomas also told the committee that year-to-date occupancy at the hotel has been 88.1 percent. He noted that the Hilton’s occupancy rate is considerably higher than the Austin hotel market in general and a competitive set of local hotels. The Austin market is reporting a 69.8 percent occupancy rate and comparable hotels are at 62.8 percent, he said. He noted that the airport hotel benefits from use by staff from various airlines who need a convenient place to spend the night.

Thompson detailed a variety of renovations at the hotel, many of which have already been completed. Future renovations include upgrades to the lobby check-in desk, restaurant and lounge, which will be done as separate projects when funding is available, she said.

The hotel’s governing board approved the city’s living wage requirements for hotel employees effective in February 2022. In September, the governing board and the management group Prospera formally agreed to adopt the city’s living wage requirements. In October, wages of non-tipped employees increased to $20 an hour. However, that amount has not been sufficient to fill all of the hotel’s staff vacancies, he said.

In response to questions from Council Member Alison Alter, who chairs the committee, Thomas said the airport has an overall staff vacancy rate of 35 percent, which is down from 37 percent. As a result, the airport also is contracting out some jobs, he said. Alter said she has concerns about the city’s staff vacancy rate overall, but this was the first time she had heard about the rate at the airport. She said she expects airport staff to report on the situation during budget sessions coming up next month.

Both Alter and Council Member Vanessa Fuentes expressed their appreciation for the hotel’s agreement with the union UNITE HERE Local 23. The union and hotel management, Boykin Prospera LLC, entered into a labor peace agreement in April 2022. They currently are working on a new collective bargaining agreement that is expected to be ready for ratification in August.

The current management agreement between ABLE and Prospera will end on October 31, 2024. Any new contract will come to Council for final approval.

Photo made available through a Creative Commons license. 

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