Monday Morning Scoop - A Wave Of Forthcoming Resorts Highlights Developer Confidence In Houston’s Maturing Tourism Market

A Wave Of Forthcoming Resorts Highlights Developer Confidence In Houston’s Maturing Tourism Market

As more people move to and visit the Houston metropolitan area, developers are identifying what the region is missing. Lately, they’ve seemed to think that means more places to vacation and live it up resort-style.

Great Wolf Lodge, Sports Illustrated Resorts and Margaritaville are all setting up shop in the Houston-Galveston area. Developers and tourism professionals say the influx signifies the Houston area’s growth and its potential to attract visitors beyond weekday business travelers.

Houston is the second-fastest-growing large metro area in the nation, according to Site Selection Group, and its population is projected to exceed 8 million by 2028.

“We’re the fourth-biggest MSA in the United States, but we really lack resorts,” said Uri Man, CEO of The Lagoon Development Co. “We don’t have enough tourism resorts to meet the growing demand.” 

Man saw a need for more recreational options in the Houston area when he began building large lagoons with beach and watersport options for master-planned communities and as stand-alone attractions in various suburbs. 

Last month, Sports Hospitality Ventures and Lagoon Development announced a joint venture to build Sports Illustrated Resort at Lago Mar in Texas City. Lago Mar is a 2,033-acre master-planned community that is home to a 12-acre, 24-million-gallon lagoon. The resort will include a nine-story building with 200 rooms, some offering a view of the lagoon.

Man met Sports Illustrated Resorts executives through a search for a property management company, which led him to American Resort Management, the company that manages Sports Illustrated Resorts. That’s when he learned that Sports Illustrated Resorts was looking to set up shop in locales beyond the college towns it had already announced, but in beach areas too, he said.

“They wanted to have a beach club and the stars kind of aligned because our plans were to have a beach club that’s open to the general public on the shores of the lagoon,” Man said. 

Groundbreaking for Sports Illustrated Resort at Lago Mar is slated for the third quarter of this year.

Less than 10 miles away, Great Wolf Lodge in Webster is gearing up to open in October, according to its website. The 532-room resort with a 95K SF indoor water park and a 58K SF Great Wolf Adventure Park is being built on a 27-acre parcel adjacent to Flyway Texas, an 80-acre dining and entertainment development along Interstate 45 south of the NASA Bypass.

Webster’s centrality between Houston and Galveston made it a standout choice for Great Wolf’s first Houston metro location, Katie Vela, marketing and tourism specialist for the City of Webster, told Bisnow in a statement.

“The emergence of resorts like Great Wolf Lodge has garnered significant attention, even among the local population,” Vela said. “Families are drawn to the opportunity for an ultimate vacation getaway with minimal travel time.”

With the forthcoming resorts plus NASA’s Space Center Houston, Topgolf and the Tanger Outlet Houston, I-45 between Houston and Galveston is emerging as a significant entertainment corridor, Man said.

“It’s becoming the place that you want to go for entertainment in the Houston market,” he said.

In Galveston, a 300K SF Margaritaville Beach Resort with a 2.5-acre elevated water park, restaurants and 334 guest rooms is set to break ground early this year and deliver in 2026.

The developer, RREAF Holdings, previously told Bisnow it was enticed by Galveston’s recent increase in tourism. The island saw 8 million visitors in 2022, a 25% increase from 2021, which brought a record $1.2B in tourist spending, according to Visit Galveston.

“We love drive-to leisure,” RREAF Holdings CEO Kip Sowden said, adding that “when you think about where Galveston is located, you’ve got 21 million people in a four-hour drive and 8 million in a one-hour-or-less drive.” 

RREAF closed on the 95-acre site in November 2021, but began due diligence to determine the right plan for the land long before, Sowden said.

“We looked at a number of different options for that location,” Sowden said. “But it became clear to us that the Margaritaville overall concept on the beach in Texas was hands down the best option to guarantee the success of that development.” 

Houston has long had a reputation as a city that mostly attracted business travel, but that is no longer the case, Man said.

“There’s an uptick in demand for weekend visits. People are coming, the market is changing,” he said. “It’s becoming more mature and there’s more room for tourism.” 

Houston’s hotel market ended 2023 strong, Houston First reported, with occupancy, average daily rates and demand all seeing annual gains of between 5%-6%. Occupancy landed at 59.8%, up 5.6% year-over-year, and ADR reached $113.24, an uptick of 6.3%, according to the report. 

By: Maddy McCarty
Source: BisNow