HVS Market Pulse: Baytown, TX
 February 6, 2017
 By Austin LaPoten
More than 500 years ago, Álvar Núñez Cabeza de Vaca, the famous Spanish explorer,
shipwrecked on Texas’s Galveston Island. De Vaca’s subsequent trek across the area’s
marshes most likely took him through what is now Baytown, which was founded
through the forging of three separate cities in 1948. Today, Baytown is one of the most
important oil and gas centers in the U.S., as reflected in its motto: Where water and oil
Summary
really do mix.
The following article gives a brief overview of Baytown’s economic drivers, hotel demand generators,
Billions of development
dollars are at work in
Baytown, Texas, including
the massive Cedar
Crossing Industrial Park,
the largest on the Gulf
Coast and the fifth largest
in the world. As the energy
market recovers, Baytown
hotels stand to benefit.
and the recent dynamics of the local lodging market.
The Oil Industry in Baytown
 943 Views
 Comments
In 1919, the Humble Oil and Refining Company built the Baytown Refinery, which is currently owned and
operated by ExxonMobil. The refinery is part of the largest integrated refining and petrochemical
complex in the United States.
FILED UNDER
CATEGORIES
When the refinery first opened in 1920, it
processed roughly 10,000 barrels per day
of crude oil. Today, the ExxonMobil
United States
Baytown complex has the capability to
[1]
North America
process up to 584,000 barrels per day.
Baytown, TX, United States
The Baytown plant is currently
Texas, United States
undergoing ExxonMobil’s first major U.S
chemical expansion since 2001. The $6‐
billion project, which will create 350
direct jobs and lead to the production of
1.5 million tons of ethylene, is slated for completion in 2017.
Baytown is also home to the Chevron Phillips Chemical Cedar Bayou facility. The facility is located on
1,800 acres, with 33% devoted to petrochemical manufacturing.
[2]
The plant’s expansion will reportedly
expand the facility’s normal alpha olefin ﴾NAO﴿ production by at least 20%. The $6.5‐billion expansion,
which began in April 2016, is scheduled for completion by mid‐year 2017.
Economic Outlook
Despite the decline of the global oil and gas market over the past several years, which has resulted in a
slight increase in unemployment throughout the area, Baytown continues to prosper, with growth
underway in the residential and support‐services sectors in the immediate area.
According to the September 2016 CDS Market Research Baytown Analysis and Update, 22,000 skilled
construction jobs are projected to be created in Baytown over the next five years. Furthermore, in 2016,
IKEA announced plans to lease one million square feet of distribution space at the nearby Cedar
Crossing Industrial Park. The area’s distribution, shipping, and transportation industries, which are the
prime drivers of the local Baytown economy, benefit from a proximate infrastructural network that
includes Interstate 10 and the Port of Houston.
Leisure Demand Generators
The San Jacinto Mall was purchased by an affiliated acquisition partnership of Houston‐based Fidelis in
July 2016, and a $110‐million redevelopment of the property has already begun. The plan for the mall,
which was in decline and only 70% occupied as of July 2015, includes a one‐million‐square‐foot open‐
air center on the property.
The initial demolition phase began on
April 28, 2016. According to B.J. Simon of
the Baytown‐West Chambers County
Economic Development Foundation, a
preliminary study estimated the regional
economic impact related to the
construction of the mall project to be
from $70 million to $210 million,
resulting in the creation of up to 845
direct jobs and up to almost 1,000
[3]
indirect jobs.
The City offered over $22
million in cash incentives and sales tax
rebates, plus a ten‐year tax abatement, if
Fidelis can open the revamped mall by
[4]
2020 and create $50 million in property value.
Mr. Simon also noted that Super Bowl LI, which will take place on February 5, 2017, at NRG Stadium in
Houston, should further boost leisure demand in the area, reaching as far as Baytown.
Impact on Baytown Hotel Industry
Despite the decline of the global oil and gas market in late 2014, limited‐service hotels in Baytown
reportedly did not experience a noticeable decline in hotel occupancy and RevPAR until 2016. The
primary reason behind the downward trend was attributed to the reliance on turnover business from
work at the nearby petrochemical facilities, which subsided in 2016. However, the billions of dollars in
petrochemical projects, along with the aforementioned projects, should lead to a reversal of this
negative trend, as growth is expected in 2017 and beyond.
Conclusion
The overall outlook, including prospects for leisure demand for area hotels, remains bright for Baytown.
Local hotels will benefit from demand compression from the February 2017 Super Bowl in Houston,
while major projects in the petrochemical industry and the redevelopment of the former San Jacinto
Mall should support expanded economic growth in and around the city over the long term.
[1]
"Baytown." ExxonMobil's Careers. N.p., n.d. Web. 16 Jan. 2017.
[2]
Chevron Phillips Chemical Company, Corporate Communications. "Baytown." Baytown. N.p., n.d. Web. 16 Jan. 2017.
[3]
Aubespin, Eleska. "San Jacinto Mall Sale Final, Major Makeover next." The Vindicator. The Vindicator, 16 July 2015. Web. 16 Jan.
2017.
[4]
Collette, Mark, and Erin Mulvaney. "Booming Baytown Props up Houston's Economy, for Now." Houston Chronicle. Houston
Chronicle, 12 Mar. 2016. Web. 16 Jan. 2017.
About Austin LaPoten
Austin LaPoten, Project Manager with HVS Houston, graduated from college as
one of the top hospitality students internationally. Austin’s prior experience in
hotels and hospitality includes working at the Atlantis, The Palm resort hotel in
Dubai, where he helped research and create concept statements in preparation
for future hotel openings, including plans for all facilities and amenities. Austin
earned a BS in Hospitality Management from Florida International University’s
Chaplin School of Hospitality & Tourism Management. He also holds a diploma in
German and European Union Studies from the University of Edinburgh. Contact Austin at ﴾267﴿ 640‐
9781 or [email protected].