Real Estate

Oldest San Antonio River Walk Hotel to Get $46M Renovation by 2026

El Tropicano River Walk Hotel to undergo $46M renovation, transforming 308-key property into upscale lifestyle destination.

By Tal Alexander

5/22, 18:03 EDT
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Key Takeaway

  • El Tropicano River Walk Hotel in San Antonio is set for a $46 million renovation, transforming it into an upscale lifestyle destination.
  • The 308-key property, closed since April 2020, was acquired by Trestle Studio and partners after previous owners faced financial issues and lawsuits.
  • Renovation completion is expected by February 2026, aligning with predictions of high hotel occupancy in San Antonio.

Historic Hotel's New Lease on Life

The El Tropicano River Walk Hotel, the oldest hotel on San Antonio's iconic River Walk, is set to undergo a $46 million renovation. This ambitious project is spearheaded by a joint venture between Trestle Studio, the Town Lake Company, and Sopris Capital. The renovation aims to transform the 308-key property into an upscale lifestyle destination, complete with event spaces and a rooftop deck. This redevelopment marks a significant investment in San Antonio's hospitality sector, particularly as the city is predicted to have the highest hotel occupancy rate in Texas this year.

Financial and Legal Hurdles Overcome

The journey to this renovation has been fraught with financial and legal challenges. The previous owners, Alamo Equity and Phoenix Hospitality Group, had planned a $50 million renovation, but the project stalled due to lawsuits and financial mismanagement. A retired broadcasting executive, Emilio Nicolas Jr., sued Alamo’s CEO over these issues, and lender Weston Urban initiated foreclosure proceedings due to unpaid loans. The property was eventually sold to Trestle and its partners in an off-market deal, allowing the new owners to move forward with their plans.

San Antonio's Growing Hospitality Market

San Antonio's hospitality market is experiencing a surge, driven by its relatively low hotel inventory compared to cities like Dallas-Fort Worth and Houston. According to Marcus & Millichap, the city's average room rate is $40 lower than Austin's, making it an attractive destination for budget-conscious travelers. This renovation of El Tropicano is timely, as the city is poised to draw more visitors, further boosting its hospitality sector.

Broader Implications for Development

The renovation of El Tropicano is part of a broader trend of increased development costs in San Antonio. The city council recently passed an ordinance to increase utility connection fees for new developments, effective in July. These fees, which will rise by an average of 23 percent, are intended to offset the costs of capital improvements needed to support the city's rapid growth. This increase in development costs could impact future projects, making the successful renovation of El Tropicano even more significant.

My Perspective on the Market

The renovation of El Tropicano River Walk Hotel is a testament to the resilience and potential of San Antonio's hospitality market. Despite the financial and legal hurdles, the new ownership's commitment to transforming the property into an upscale destination is a positive sign. However, the increased development costs and utility fees could pose challenges for future projects. Balancing these costs with the city's growth and demand for hospitality services will be crucial for sustaining this momentum.