Although their timing could be better, new hotels and resorts are cropping up in prime meetings locations across the land.
With a slew of projects set in motion long before today’s credit crunch and economic meltdown, the world’s largest hotel companies are poised for even bigger growth in the months and years ahead. According to a recent forecast from PKF Hospitality Research, the U.S. at the end of 2009 will have an additional 275,000 hotel rooms—an increase of 6.2 percent—over two years before.
Mark Woodworth, president of PKF Hospitality Research, observes that the hotel industry is expanding just as demand is expected to decline.
“Because of the extended slowdown of the U.S. economy, compounded by the negative consequences stemming from airline capacity cutbacks, we are now forecasting a 0.2 percent decline in lodging demand in 2008, followed by another loss of 1.1 percent in 2009,” he says. “According to data from Smith Travel Research, this is the first time since 1988 that the U.S. lodging industry will experience two consecutive years of decline in lodging demand.”
While limited-service hotels have comprised the bulk of new development in recent years, the major hotel chains are also adding a number of resorts and full-service hotels, including convention properties, to their portfolios.
Among hotel brands with a growing presence is IHG’s InterContinental, which has increased its number of hotels in North America from 13 to 21 in just over two years. The newest is InterContinental’s first resort property in the U.S., the 292-room InterContinental Resort & Spa, which just opened in Scottsdale, Ariz.
In September, IHG unveiled the 556-room InterContinental Chicago O’Hare and the 174-room Presidente InterContinental Puebla in Mexico, while earlier in the year came the debut of two California properties, the 550-room InterContinental San Francisco and the 208-room InterContinental The Clement Monterey. Currently in the development pipeline are the InterContinental New York Times Square and the InterContinental Atlanta Midtown.
Also in a growth mode is Starwood Hotels & Resorts, which opened its 900th property this year and expects to increase its portfolio by 50 percent over the next five years, with about half of the new hotels opening in North America.
Among Starwood’s fastest-growing brands is W, which currently has agreements in place that will triple its locations worldwide to 60 hotels. Within the past few months, new W hotels have opened in Scottsdale, Minneapolis and Atlanta.
Starwood’s Sheraton brand, which has an aggressive plan to complete 50,000 new and renovated guest rooms in North America by the end of next year, got a major boost with the October opening of the 1,000-room Sheraton Phoenix Downtown Hotel. The property, the largest in Arizona, serves as a convention headquarters hotel for the nearby Phoenix Convention Center.
Marriott International, which has some 130,000 hotel rooms in the development pipeline worldwide, is also expanding its convention hotel presence. New developments in this vein include the $425 million, 1,626-room JW Marriott Indianapolis Complex, which will feature several properties and over 104,000 square feet of meeting space. Its largest property, the 34-story JW Marriott Indianapolis, is slated to open in early 2011.
Another big convention center hotel under construction is the JW Marriott Los Angeles, which will open in March 2010 adjacent to the Los Angeles Convention Center. The 875-room hotel, which is part of the L.A. LIVE entertainment complex, will offer 77,000 square feet of meeting space and share a 54-story tower with a new Ritz-Carlton property.
After signing four agreements last summer, Marriott is set to triple its presence in Mexico by adding 29 new branded hotels in the country over the next five years. The projects encompass several resort properties, including two expected to open in 2011: the 450-room JW Marriott Milla de Oro Resort & Spa on the Riviera Maya and the 250-room Puerto Penasco Marriott Resort on the Pacific coast. A 170-room Ritz-Carlton is planned for Mexico City, also opening in 2011.
Hilton Hotels Corp., which added 18 new-build hotels in 2007, has continued its expansion this year, with several full-service properties in U.S. locations. Set on 587 acres at the foot of the Sangre de Cristo Mountains in northern New Mexico, the Hilton Santa Fe Golf Resort at Buffalo Thunder opened in September with 390 guest rooms, a full-service spa featuring Native American therapy elements, 66,000 square feet of meeting space and six restaurants.
Hilton also recently opened a new convention headquarters hotel, the 757-room Hilton Baltimore, located in downtown Baltimore adjacent to the convention center and near the Baltimore Orioles’ ballpark. Baltimore’s largest hotel, the property also features the city’s largest ballroom at 25,000 square feet.
Another new Hilton convention property, the 1,190-room Hilton San Diego Bayfront, is scheduled to open this month adjacent to the San Diego Convention Center. The property offers a whopping 165,000 square feet of meeting and event space as well as pedestrian access to a new 4.3-acre waterfront park that accommodates up to 15,000 people for outdoor events.
Also expanding its full-service product, Hyatt Hotels & Resorts opened the Hyatt Regency Trinidad earlier this year, a 428-room hotel with 43,000 square feet of meeting space, making it one of the largest meetings-oriented resorts in the Caribbean. Two hotels designed to earn LEED certification from the U.S. Green Building Council are currently under construction: the Hyatt at Olive 8, which will open in Seattle early next year, and the Hyatt Regency Toronto Airport, scheduled to open in 2010.
