Bay Area Lodgings Industry Finds Room For Growth

[tampamobster21]

Bay Area Lodgings Industry Finds Room For Growth

By TED JACKOVICS The Tampa Tribune

Published: Aug 14, 2007
TAMPA - The bustling construction site just south of Tampa International Airport certainly seems like an ideal location for a new hotel. It's within five minutes of the airport's terminal, two regional shopping malls and West Shore, Florida's largest office market not in a downtown area.

Not so, said John McKibbon, chief executive officer of Tampa-based McKibbon Hotel Management, which manages 50 hotel properties in eight states.

The 19-acre site actually is an ideal spot for three new hotels.

By next year, McKibbon, which is developing the hotels on the site, plans to add a Marriott, a Hilton Garden Inn and a Homewood Suites as part of Avion Park of Westshore, a retail, restaurant and office complex rising on West Spruce Street.

The three hotels are among more than 20 new lodgings projects either under way or planned for the Tampa area. Those include six hotels under construction, 12 more scheduled to break ground in the next 12 months, and four others in early planning stages, according to a recent report by The Plasencia Group, a national hotel investment and consulting firm based in Tampa.

Driving the development interest: rising room rates, strong profit potential, and increased willingness from banks to finance hotel and motel projects in cities with solid convention and business trades.

If all of the lodgings projects are built, Tampa will gain almost 3,000 rooms, The Plasencia Group estimates. That would be a 30 percent increase in the inventory of 10,770 rooms at 57 hotels.

"We're looking at a multimillion-dollar injection of new construction into the community," said Bob Morrison, executive director of the Hillsborough County Hotel & Motel Association.

No one's estimated how many jobs the new hotel projects could create, but the shot to the job market will be significant. The added inventory of rooms also should give Tampa an edge in recruiting larger conventions, Morrison said.

The lodgings industry has its sights on other cities, too. In New York, 11,000 rooms are under construction, and 4,100 rooms are under construction in Orlando.

"Development activity has picked up a good bit over the past year, both nationally and locally," said Daniel Peek, senior vice president for The Plasencia Group. "Many projects have moved from the early planning stages to the active development stages, and more projects are under construction than were 12 months ago."

Hotel brands range from the Ritz-Carlton hotel planned on Rocky Point to budget-oriented motels including the Days Inn near Busch Gardens.

Development interest is strongest in three areas: eight sites in West Shore, seven in east Tampa and seven in the Busch Gardens area.

Condo Money Now Going To Lodging
The building trend in Tampa is being driven in part by rising average room rates, which are drawing stronger interest in financing hotel projects despite concerns from the Fed about the economy.

Investment money that might have targeted condo and residential development before those segments went into decline is more readily available, and some construction materials have become cheaper. But land for hotel development remains expensive, Peek said.

For people who haven't spent much time on the road recently, higher room rates might catch them by surprise.

The average daily U.S. room rate rose 5.4 percent from June 2005 through June 2006, Smith Travel Research in Hendersonville, Tenn., reports. Average daily hotel rates continue to climb in Tampa, up about 6 percent to $109.81 for the six months of 2007, Smith Travel Research says.

That's good news for local hotel investors and operators, helping counter a 2.7 percent decline in local occupancy, with 68.7 percent of Tampa hotel rooms occupied January through June.

Room rate increases and flat occupancy mirror trends nationwide. Tampa, however, shows strong demand Sundays through Thursdays, continued strength in pricing among the leading hotels, and plenty of development sites from which to choose, Peek said.

In recent years, some higher-end hotel projects were combined with condominiums to leverage economic strengths of both.

When the condo market began to soften in the Tampa Bay region in early 2006, plans for condo-hotels were deferred, like some in Pinellas County, or have fallen through, like the luxury Fairmont hotel-condo on waterfront land near the Port of Tampa.

The decline in condo and residential construction also has created investment and construction opportunities in places such as Tampa, where banks and investors think the local economy has potential for growth.

"There's been a pent-up demand for new hotel product in West Shore," McKibbon said. "Room demand is fairly stable and not growing as fast as a year ago, but rates are growing, which is good."

More Hotels Are In The Hopper
John Moors, Tampa's administrator for the Tampa Convention Center, said the city always needs more hotel rooms, in particular within walking distance of the downtown facility.

A 360-room Embassy Suites opened last year adjacent to the Convention Center, which relies on the nearby Tampa Marriott Waterside Hotel & Marina and the Westin Tampa Harbour Island, in addition to a handful of hotels somewhat farther away.

"As you move a couple blocks away, you might have to arrange transportation," Moors said of attracting convention center groups. "The big trend is big hotels with meeting space under one roof." At least two hotels opened recently in Orlando with more space than the Tampa Convention Center, Moors said.

In addition to the Embassy Suites downtown, a 100-room Staybridge Suites and a 126-room Homewood Suites recently opened in east Tampa.

Beyond the construction boost, more than $230 million has been spent buying and selling local hotels in the past two years, with an additional $100 million in pending deals, Peek said. Two Wyndhams and a Hilton, Radisson and Marriott are among recent sales.

Plans also have been made to convert the brands of three West Shore hotels. The AmeriSuites Airport will become a Hyatt Place, the Econo Lodge Midtown will become a Quality Inn, and the Wyndham will reopen after a major renovation as an Inter-Continental hotel.

Reporter Ted Jackovics can be reached at tjackovics@tampatrib.com or (813) 259-7817.

[Robert.Maddrey]

Hotels and rental properties are certainly where its at in our current economic cycle. There was a good article last week very similar to this, concerning the resurgence of hotel properties in Pinellas county as well.

[Jasonhouse]

Hotels have been keeping me busy at work lately... All over central Florida, especially in Orlando (which stands to reason, since there are more hotels there). A bunch of them around the OCCC have changed hands in recent months, exemplifying the increased ease with which such projects can be financed (both sales of existing hotels and construction).

[HARTride 2012]

This will certainly help out the tourism industry in the Bay Area. I love it when new hotels and other hospitality entities come around.

[Maxim98]

Don't forget, there is also a new Embassy Suites opening up very soon along 75 opposite Westfield Brandon. Not bad for Brandon.

[Robert.Maddrey]

That brings to mind one change I would like to see with the economy allowing for expansion of hotel accommodations in the greater metro Bay Area; more lodging in suburbs such as Carrollwood, West Chase etc... Their is a deplorable derth of choices for out of town guests or business travelers seeking to stay closer to their friends/family and clients. Perhaps, we will see some positive developments in those sectors as well.

[Jasonhouse]

^What always strikes me is the almost complete lack of large hotels with either resort style amenities, or large amounts of meeting space in the region. The largest hotel still only has 717 rooms.

imo, DT Tampa's tourist industry really needed a project like the Teleconvergence Center thing to add another big block of hotel rooms, and another big chunk of contiguous meeting space, except it needed to be a more sane plan with pricing considerably further 'down market'... And it would be swell if it was on the lot between the arena and convention center, or perhaps just north of the arena, not isolated from the rest of the convention area.

[Robert.Maddrey]

The key there is to integrate things into the existing convention center complex, while allowing for the center's inevitable expansion. Bearing that in mind, the transportation issue is raised and I still miss the monorail/people mover that used to connect the Verizon building and downtown to HI, something along those lines would be invaluable to conventioneers, retailers, hospitality and lodging in today's changing market.

In addressing the resort issue, you are actually very right. I had never really thought about it, but it is odd that there is not an actual resort readily accessible.... Something along the lines of the Westin/Convention complex and golf course in Savannah, GA comes to mind as a viable model, though I am not sure how many rooms is accomodates.

[Maxim98]

^It's a nice complex... Tampa certainly would benefit from something of such a scale, though I'm not incredibly keen on there being so much.... open space in an urban environment. If entertainment venues were to wrap around the expansive base of such a project, surrounding convention space, I think it would be a real winner for DT.

[Robert.Maddrey]

Originally Posted by Maxim98

^It's a nice complex... Tampa certainly would benefit from something of such a scale, though I'm not incredibly keen on there being so much.... open space in an urban environment. If entertainment venues were to wrap around the expansive base of such a project, surrounding convention space, I think it would be a real winner for DT.

Entertainment is a definite key to the equation. In Savannah at least, they have developed a unique approach to getting the conventioneers/tourists from the Westin complex to the entertainment complex just across the river, complimentary water taxis. Its novel, fairly expedient and allows people to visit the local pubs without worrying about having to drive.

Bearing in mind our ample amounts of water, something along these lines may work as well. We certainly, do not make as much use of the water surrounding downtown as we could. Ie. where programs like the Riverwalk come in.

[Jasonhouse]

^I think that an expanded trolley circulator would serve DT very well... If they would just get on with building the thing. (and with speeding up the trolleys)

[jvance75]

Originally Posted by Robert.Maddrey

The key there is to integrate things into the existing convention center complex, while allowing for the center's inevitable expansion. Bearing that in mind, the transportation issue is raised and I still miss the monorail/people mover that used to connect the Verizon building and downtown to HI, something along those lines would be invaluable to conventioneers, retailers, hospitality and lodging in today's changing market.

In addressing the resort issue, you are actually very right. I had never really thought about it, but it is odd that there is not an actual resort readily accessible.... Something along the lines of the Westin/Convention complex and golf course in Savannah, GA comes to mind as a viable model, though I am not sure how many rooms is accomodates.

thats across the river from downtown savannah, hutchinson island, right? Had a family member move downtown for a few months to work on a case with a law firm, had a lot of nights drinking and days walking in downtown...natives thought it was an eyesore. Of course this is a city where most of downtown, including the not too old hilton, is on top of large mass graves(some sections 500+ people) of just about every faith.

I miss the people mover too....felt more like something in a large city instead of these historic trolleys-which i think is actually hurting ridership due to speed and the jerking feel...hope they upgrade to modern soon

[FloridaFuture]

Hillsborough hotel occupancy off in June
Tampa Bay Business Journal - 11:46 AM EDT Wednesday, August 15, 2007

Hillsborough County hotels took a bit of a hit in June as occupancy plunged to 59.4 percent, compared with 65.5 percent a year ago, based on a report by Smith Travel Research. Rates were up 3 percent to $93.46, but that wasn't enough to keep RevPar, the revenue per available room, from dropping 6.7 percent to $55.51 per room.

Group business declined 4.2 percent, according to the Tampa Bay Convention and Visitors Bureau. There were 3.4 percent more rooms available this year, and with slower transient business, it makes for a down month in occupancy, said Steve Hayes, executive vice president.

http://tampabay.bizjournals.com/tamp...l?surround=lfn

[Tallaman]

I've used the Doubletree in Westshore and the Hilton in St Pete for weeklong conventions involving about 500 people. The Doubletree has restaurants nearby, but you have to drive to get there - autocentric. The Hilton was nice because attendees could walk to excellent downtown restaurants in Baywalk and along the waterfront. Parking was fairly limited and we had some people had windows smashed out overnight in the Mahaffey parking lot. None of them exactly provided any kind of on-site entertainment (like golf, beaches, etc.). Saddlebrook in Pasco has some meeting space and is a pretty nice resort.

I'll have to say that Orlando has plenty of options with meeting space and onsite entertainment (but it's very autocentric and expensive) - Yacht Club in Disney, Sheraton Safari, many hotels near the convention center on I-drive, Florida Mall hotel and so on.

The site of the proposed Hillsb River Tower might be a good option (or something in that area) if it had adequate transportation options (like a trolley or a people mover type of thing) to connect it to DT restaurants and the convention center area. Twelve and Grand Bohemian present intriguing possibilities. Something could be developed on one of the vacant lots in DT, especially near the convention center or the C-side area. Fairmont in TTC was also intriguing. It would be nice to have more options for small conventions in the Bay area.

[HARTride 2012]

Originally Posted by Jasonhouse

^I think that an expanded trolley circulator would serve DT very well... If they would just get on with building the thing. (and with speeding up the trolleys)

And making DT a fare free transit zone would help too, along with bus/trolley connectors. I don't like the scaling back of DT transit thanks to you know what. That I mean the scaling back of the existing DT trolleys on tires.

[Jasonhouse]

I don't think it should be free actually, because I think that riders should pay a chunk of the cost, but folks should be able to get unlimited daily, weekly and monthly passes for a cheaper price than the 'full price' cards a rider can buy now.


But the topic is hotels... Let's stick to it.

[HARTride 2012]

Originally Posted by Jasonhouse

I don't think it should be free actually, because I think that riders should pay a chunk of the cost, but folks should be able to get unlimited daily, weekly and monthly passes for a cheaper price than the 'full price' cards a rider can buy now.


But the topic is hotels... Let's stick to it.

Yeah. But that's just a small point. As for the hotel/convention center combo thing. That I think is a great idea...if the property is supplimented by entertainment venues. I had the opportunity to go to the Gaylord Plams in Kissimmee a few years back to visit my aunt who works for Princess House (the company was holding a convention there). The facility is awesome in my opinion and I think that type of concept will work in Tampa.

[Robert.Maddrey]

Originally Posted by wslupecki

Yeah. But that's just a small point. As for the hotel/convention center combo thing. That I think is a great idea...if the property is supplimented by entertainment venues. I had the opportunity to go to the Gaylord Plams in Kissimmee a few years back to visit my aunt who works for Princess House (the company was holding a convention there). The facility is awesome in my opinion and I think that type of concept will work in Tampa.

Affordable land in the volume needed for something like that is going to be hard to come by unless you build way-out, in say Orlampa. LOL Though, I agree that something along those lines offering resort amenities, entertainment and convention space would be good for the Tampa market.

Actually, the more I think about it, the hotel accommodations at the I-Mall are actually pretty good in terms of readily accessible entertainment, dining, etc... That had slipped my mind previously. Too bad, the executive golf course over there is long gone, it would have played into a resort feel even more if it had been done correctly, even in its close proximity to TIA.

[Jasonhouse]

A smart developer will one of these days buy something in the Gateway area (like the Airco golf course off of Ulmerton) and then they will build something nice there... There is room there to build both out and up (to a degree), and the location is great for access to everything in the region.

[HARTride 2012]

Oh yes, one of the sole areas in Pinellas that still has a little breathing room left. With Carillon growing, that place will soon get its fame as a competitor to WestShore.