The bid will now go to another company.
Houston Mayor Sylvester said if procedure is followed, Pappas should lose the bid.
It was between Pappas Restaurants and Areas JV, which is an out-of-town company that represents some local food establishments.
Pappas launched a public campaign to stay at Hobby, even launching an online petition that got tens of thousands of signatures.
However, before the vote, Mayor Sylvester Turner gave a long speech saying a team evaluated all the bids and made a recommendation and that sticking with Pappas would not be the best and most profitable option for the city.
He strongly encouraged a vote against awarding the Pappas restaurants a 10-year contract at Hobby Airport.
Despite several council members questioning how fair the process is, that is what happened with the 10-6 vote going against Pappas restaurants.
“This is a competitive process, not a popularity contest," the mayor said. “Pappas chose not to go up. In fact, what Pappas is offering the city for the next 10 to 20 years is less than what they’re giving the city right now.”
Councilmembers who voted against pushing Pappas out argued the process was flawed.
“Hobby Airport is a five-star Airport and to bring somebody new like that when we just recently got the designation of a five-star airport is concerning," said Councilmember Robert Gallegos.
A spokesperson for Pappas restaurants said they are disappointed in the city council’s decision.
He said all employees working at Hobby Airport will be offered jobs at other restaurant locations around the city
The vote came a week after the city council heard public comments on the new restaurants coming to the southeast Houston airport.
Last week, supporters of the Pappas restaurants, including a member of the Pappas family, spoke about why the restaurants should stay while those who disagree said other restaurants should be given a chance.
A separate 10-year contract awarded in January to Houston-based LaTrelle's Galley will bring Common Bond Bistro and Bakery, Velvet Taco, Pinks Pizza and Dish Society to Hobby.