I worked with a GM once in a mid-size Texas market who kept a running spreadsheet he called "The Neighbors." Every time a new hotel broke ground within five miles, he'd add a row... estimated room count, projected open date, flag, rate tier. He updated it quarterly. His ownership group thought it was overkill until the day he walked into a budget meeting, pulled it up, and said "We have 1,200 new rooms opening within 18 months of each other. Our rate ceiling just dropped $15 and nobody in this room has priced for it." Dead silence. He was right. That was eight years ago. I think about that spreadsheet every time I watch a market do what San Antonio is doing right now.

Downtown San Antonio has added 42% more hotel rooms since 2019. Forty-two percent. In the same window, room nights sold have dropped over 12% and occupancy has fallen from the mid-70s to 59%. RevPAR for Q4 2025 was down nearly 9% year over year. Revenue across the broader market fell 7% to roughly $342 million in the same quarter... the steepest decline of any major Texas metro. And here's the part that should make every operator in that market uncomfortable: they're still building. A $185 million luxury property just opened in March. There's a 160-room hotel tied to a new ballpark in the pipeline. The Thompson San Antonio just went to foreclosure with a $40.6 million credit bid from its lenders. One hotel opens, another one fails, and the supply count keeps climbing. That's not a market correcting. That's a market that hasn't admitted what's happening yet.

The demand side isn't complicated. Convention business hasn't recovered nationally since the pandemic... it's just true, and cities that bet heavily on convention-driven midweek occupancy are feeling it the hardest. International inbound travel to the U.S. has softened (Canadian boycotts, European advisories... pick your headline). And the leisure traveler who kept hotels alive in 2021 and 2022 has moved on to the next Instagram destination or pulled back spending entirely. None of this is unique to San Antonio. But San Antonio made a choice a lot of markets made... they kept approving supply as if 2019 demand was coming back. It didn't. And 42% more rooms competing for 12% fewer guests is arithmetic, not opinion.

What makes this genuinely painful is the economic weight. Tourism pumped an estimated $23.4 billion into San Antonio's economy in 2024 and supported over 150,000 jobs. That's not a rounding error. When occupancy at 59% means hotels are cutting shifts, deferring maintenance, and negotiating rate floors they never imagined, the ripple goes way beyond the lobby. Housekeepers lose hours. Restaurants lose covers. The convention bureau pitches harder for smaller groups at lower rates. And the owners who borrowed against 2019 performance to build or renovate? They're staring at debt service against a RevPAR that's sliding in the wrong direction. The Thompson foreclosure isn't an outlier. It's a preview.

Look... San Antonio is a great city with legitimate tourism assets. The River Walk, the Alamo, the Spurs, the culture, the food. This isn't a market with a demand problem because nobody wants to visit. It's a market with a supply problem because too many people wanted to build at the same time, and nobody blinked. The recovery path is straightforward in theory and brutal in practice: supply has to get rationalized, either through conversions, foreclosures, or properties going dark. Demand has to be rebuilt with realistic convention calendars and rate strategies that don't chase the bottom. And the next time a developer walks into city hall with renderings for a 200-room lifestyle hotel in a market already sitting at 59% occupancy, somebody needs to pull up the spreadsheet and ask the hard question.

I sat in a conference room once with an ownership group that managed four hotels across three segments. Two were upper-upscale in urban cores. Two were select-service in secondary leisure markets. Same management company. Same operator discipline. Same ownership. In the same year, the urban properties posted record GOP and the select-service pair missed budget by 11%. The owner looked at the management company and said, "How can you be this good and this bad at the same time?" The answer, of course, was that they weren't either. The economy had split in half, and their portfolio was sitting on the fault line.

That's 2025 in a sentence. Occupancy dropped to 62.3%. RevPAR slid to $100.02... a 0.3% decline that doesn't sound like much until you remember it's the first full-year drop since 2020. ADR managed a 0.9% crawl upward to $160.54, which means operators were holding rate while losing heads in beds. And CBRE's forecast went from 1.8% growth to 0.1% over the course of the year, which tells you everything about how fast the ground shifted. But those are portfolio-level numbers. They're averages. And averages lie. New York and San Francisco held strong. Las Vegas... ADR down 4.3%, RevPAR down 10.9%. Houston got hammered. If you ran a luxury property in Manhattan, 2025 was fine. If you ran a 150-key midscale in a secondary market dependent on government travel and Canadian cross-border traffic, you got hit from three directions at once... and nobody at the brand's quarterly call was talking about YOUR hotel.

Here's the phrase I keep hearing: "K-shaped economy." The top of the K (luxury guests, corporate group, international leisure spending on upper-upscale) went up. The bottom of the K (value-conscious domestic travelers, budget-sensitive families, government-related demand) went down. Pebblebrook's Jon Bortz basically said as much... his upper-upscale and luxury portfolio outperformed because the people who stay at those hotels got wealthier in 2025. The people who stay at your 120-key select-service outside a military base did not. International inbound from Canada and Mexico dropped over 25%. Europe and UK visitors fell 11%. Government travel froze, then the shutdown hit in Q4. Business transient RevPAR was down 2.1% in the fourth quarter alone. And here's the part that should keep you up at night: wage growth hit 4.2% while CPI was at 2.9%. Your labor costs are rising faster than the prices your guests are willing to pay. That math doesn't fix itself.

I've seen this movie before. I saw it in 2008, I saw a version of it in 2001, and I saw the early innings of it in 2019 before COVID rewrote everything. What happens is this: the industry talks about "headwinds" and "normalization" for about two quarters while margins compress. Then the management companies start sending memos about "cost containment initiatives" that are really just code for cutting hours. Then the GMs who actually understand their buildings start making the hard calls... which vendor contracts to renegotiate, which positions to restructure, which capital projects to delay without destroying the asset. The operators who act in the first 90 days of recognizing the shift come out the other side intact. The ones who wait for a corporate playbook don't. And right now, with 2026 forecasts ranging from flat to maybe 3% RevPAR growth (Summit's Stanner is saying Q1 is going to be ugly... January was down 3% from a winter storm alone), you don't have the luxury of waiting.

Look... the FIFA World Cup and the 250th anniversary celebrations are real demand drivers for specific markets later this year. If you're in a host city, you should be pricing aggressively and booking group now. But if you're not in one of those markets, and most of you aren't, stop waiting for a macro tailwind that isn't coming. Your comp set is dealing with the same pressures you are. The question is whether you're going to manage through this with precision or hope. Margins have compressed for three consecutive years now. The operators who survive the bottom of the K aren't the ones with the best brand affiliation or the newest lobby. They're the ones who know their cost per occupied room to the penny, who renegotiate vendor contracts before the contracts expire, who cross-train their staff so a call-out doesn't crater the guest experience. I've watched operators turn down-cycles into competitive advantages because they moved faster and thought harder than the property across the street. That's the opportunity buried in all this "uneven disruption" talk. Uneven means someone's winning. Make sure it's you.