Texas State University seeks public-private partnership for on-campus hotel

December 1, 2023

The Texas State University System is looking to enter into a public-private partnership (P3) with a developer to design, finance, construct, operate and maintain an upscale, full-service hotel adjacent to its flagship campus in San Marcos.

Plans call for an “upper-upscale” development with 150 to 250 rooms and “amenities typically associated with the scale and size of the hotel,” according to the system’s 57-page Request for Proposal (RFP). The project will also include one food & beverage outlet and a community gathering space.

It will be built on about 3 acres on the northern edge of downtown San Marcos within walking distance to the center of campus. Although there are currently no design or construction guidelines, the aesthetic should complement the university campus and stay consistent with its branding.

The university intends to execute a long-term unsubordinated ground lease that will govern the developer’s responsibilities, including design, development and construction. Ownership will revert to the university when the lease expires. 

“The intent of the Project is to deliver a high-quality, full-service hotel development that will add value to the University and San Marcos communities while generating a longterm revenue stream for the University through ground rent,” the RFP said.

San Marcos sits about 30 miles south of Austin and has a population of more than 70,000. The surrounding area submarket contains 4,600 rooms spread across 79 hotel properties, with an occupancy rate over 66% in 2022, the RFP said. Occupancy is “trending back toward the pre-pandemic peak,” it said.

The hotel market posted $31.6 million in receipts in 2022, a 21% jump in revenue over the previous year. Revenue per available room (RevPAR) climbed to $88.91 last year, while the Average Daily Rate approached $140.

Texas State University boasts an enrollment of almost 39,000 and is one of the largest employers in the region. It is the flagship of the Texas State University System, which includes six other institutions throughout the state.

Interested parties have until Jan. 23 to submit a response to the RFP. Shortlisted candidates selected Feb. 13 will then have until April 12 to offer their final submission. Developer selection is scheduled for May 20.

Strategic Partnerships, Inc. can provide information on contract opportunities, plus existing and future government funding. For more information, contact research@spartnerships.com.

Photo courtesy of Texas State University

Paul Stinson

Paul Stinson has more than 15 years of journalism experience, including a decade covering the legislative and regulatory affairs of Texas, South Africa, and Germany for an affiliate of Bloomberg, L.P. His experience includes covering voting rights and the sectors of environment, energy, labor, healthcare, and taxes. Stinson joined the team in October as a reporter for SPI’s news publications, which include Government Contracting Pipeline, Texas Government Insider, and the newly-launched Government Market News. He is also a Fulbright Scholar to Germany, and an Arthur F. Burns Fellow. He holds a master’s in journalism from Indiana University.   

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