Lakeway's Anchor Hotel Is Getting Rebuilt, and City Hall Is Paying Part of the Bill
"There are very few properties where the sense of place is so profound. Its relationship to Lake Travis, to the landscape, to the story of this community, that's what drew us to this acquisition."
That's Jake Lamstein, founder of Trestle Studio, talking about why his firm just spent $37.8 million on a hotel most of Lakeway has driven past a thousand times without giving it much thought. The Lakeway Resort & Spa has sat on its 11-acre peninsula since 1963, the first resort of its kind in the community, 168 rooms and two restaurants overlooking water that stretches across 65 miles of shoreline. Trestle Studio, working with Sopris Capital, closed on the property in May 2026 and is now pouring roughly $29 million into refreshing more than 24,000 square feet of indoor and outdoor gathering space, rebuilding the food and beverage program, and modernizing the guestrooms.
None of that is unusual for a hotel that age. What is unusual, and what most people driving past the construction fencing this fall probably don't know, is that the city of Lakeway is helping pay for it.
City documents reviewed by Community Impact this summer lay out something worth sitting with: the Lakeway Resort currently generates 48 percent of all hotel occupancy tax collected by the city. Not 48 percent of hotel revenue at the resort itself. Forty-eight percent of every hotel tax dollar Lakeway takes in, from one building.
That dependency is exactly why the resort's recent slide mattered to more than just its owners. The property's HOT contribution dropped from $730,000 in fiscal year 2022-23 to $485,000 in fiscal year 2025-26, a decline city documents attribute to deferred maintenance, outdated rooms and common areas, and pricing decisions. When a single hotel accounts for nearly half your hotel tax revenue and that hotel starts losing ground, the city's budget feels it too.
| Fiscal Year | Lakeway Resort HOT Revenue |
|---|---|
| 2022-23 | $730,000 |
| 2025-26 (current) | $485,000 |
| 2031 (city projection, post-renovation) | $875,000 |
That's the context behind the city's decision to back the project: Lakeway approved more than $2 million from its hotel occupancy tax fund to help Trestle Studio with rehabilitation costs, new signage, and what the city is calling a "reintroduction" marketing campaign. The first $1 million was dispersed in July 2026, with two more $500,000 allotments set to follow in July 2027 and January 2028. Assistant City Manager Ashby Grundman told council the renovation is projected to push HOT revenue to $875,000 by 2031, with the city expecting 95 percent of its investment repaid through increased collections by 2033 and full payoff by 2035.
Trestle Studio's own language matches the city's framing. "We already started retelling the story," said Bridgette Summers, the firm's investment officer, in the same council session. "As we do that, there's a certain elevation of the guest experience that's going to come with that." It's a hospitality pitch, but it's also, functionally, a fiscal projection that the city has bought into with public dollars.
Lakeway Marina, a three-minute walk from the resort, asked for its own piece of the same fund, more than $1.1 million for building and parking lot upgrades, a new boat ramp, and signage designed to match the resort's rebranding. Council approved the signage and historical restoration money outright and pushed the parking lot, boat ramp, and advertising requests to a later meeting for further review. The marina's request was built around matching the resort's new branding, which places the two properties side by side in the city's planning.
The scope Trestle Studio has laid out isn't a paint job. Guestrooms and common areas are being modernized. The food and beverage program, which currently includes the lakefront Sixty Three Restaurant & Bar among the property's on-site dining, is being redeveloped around what the company describes as locally driven concepts. Wellness and recreational programming is expanding. None of this has a public completion date yet. Trestle Studio and Sopris Capital have said additional details on the renovation timeline will come later, and industry coverage of the deal has noted that pacing will depend on permitting and financing, the same variables that slow every project like this.
For a hotel that opened in the Kennedy administration and has functioned as a regional wedding and meeting venue for six decades, that's a lot of moving parts to land at once. The city's willingness to attach public money to the outcome is a bet that the story Lamstein and Summers are telling, about restoring what the resort has meant to the people who love it, translates into occupied rooms and recovered tax revenue on a specific schedule.
While the resort sat behind fencing, the surrounding area didn't pause to wait for it. The Fall Pecan Street Festival returned to Hill Country Galleria on September 12 and 13, free admission and parking, local vendors and artists, kids' rides, and a full weekend music lineup. On September 26, the Taste Lake Travis Food and Beverage Festival ran its third year, spotlighting dozens of local food and drink businesses across the greater Lake Travis and Hill Country area.
Smaller openings and departures filled in the rest of the picture. A recent roundup of business changes in the area included:
Further out toward Spicewood, Austin Surf Lodge opened its lakefront cabins and suites on Memorial Day, offering paddle boarding, kayaking, a sauna, and wakesurf and pontoon charters to overnight guests and the general public. Closer in on Fitzhugh Road, Little Spark Studio celebrated its grand opening in June, a creative space for kids built around open craft hours and themed birthday parties.
None of these openings depended on the resort. The farmers market at Lohmans Crossing still ran on Wednesday evenings. The festivals still drew crowds to the Galleria and around the lake. What the resort's renovation adds isn't a missing piece of the neighborhood's social calendar so much as a bet that the largest, oldest anchor on that calendar can be brought back to the level of everything that kept showing up around it.
Whether that bet pays off on the timeline Lakeway wrote into its budget projections is something only the next few renovation seasons will show. For now, the peninsula looks like a construction site with a 1963 cornerstone and a City Hall spreadsheet riding on the outcome.
If you're watching how these shifts might reshape what the lake looks and feels like a few years out, Grimes Group Austin keeps an eye on changes like this one as closely as we track anything else in the neighborhood. Feel free to reach out if you want to compare notes on what's next for the peninsula.
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