TBO.com: Tampa Bay Online, The Tampa Tribune and The Tampa Times - breaking news and weather.
Friday, Sep 19, 2014
Business News

Hotel projects lining up as demand, financing grow

By
Published:   |   Updated: May 5, 2013 at 08:14 AM
TAMPA -

A handful of boutique hotels under development in downtown Tampa and St. Petersburg are creating a promising post-recession niche in the area’s mainstay hospitality economy.

Four-hundred boutique hotel rooms are due to come available as soon as 2014 in downtown Tampa alone, including Starwood brand Aloft, the Epicurean and Le Meridien. More than 100 boutique rooms will have opened in St. Petersburg by early summer.

The unconventional hotels, which represent some of the most aggressive hotel growth in Tampa since the recession, target the younger professional market accustomed to alternative brands elsewhere such as Starwood’s W hotels. The business generated by the new rooms won’t be at the expense of existing hotels, industry observers say.

In fact, they point out, there’s room for more new rooms in Hillsborough and Pinellas counties.

“We see Tampa as a very ripe market for new development, in particular the downtown area with what is going in and around the Forum,” said Lou Plasencia, chief executive of The Plasencia Group, a Tampa-based consultant involved in hotel and resort deals across North America.

“We see some really neat things happening in the next five to 10 years,” Plasencia said. “Clearly there’s demand, and with the bonding capacity about to become available for the Tampa Convention Center, we hope that facility can be updated to attract larger events.”

The small to midsize hotel projects relying on distinctive accommodations and service reflect the most noticeable trend in local hotel development, following the refurbishment and reopening last year of the 1920s-era Floridan Palace Hotel in Tampa.

The Floridan’s 213 rooms are furnished in the Beaux-Arts style, with gold-painted overlays, multiframed panels of rosette medallions, and hand-tailored draperies and bedding adorning the guest rooms.

The first of the three boutique hotel projects scheduled to open in Tampa is the Epicurean, a 140-room resort partnership between David Laxer of Bern’s Steak House and Tampa-based Mainsail Lodging and Development.

It will be the first newly constructed U.S. property to become part of Marriott’s Autograph collection of independent hotels, which puts the Epicurean in the company of the Brown Palace in Denver and the Carlton Hotel in New York.

It is expected to open in December and is adjacent to Bern’s, the landmark restaurant in South Tampa’s Hyde Park.

The Epicurean project, halted a few years back because of the slow economy, exemplifies a hotel with a culinary theme that should draw visitors from around the world, said Joe Collier, president of Mainsail Lodging and Development.

“Through job creation and other positive economic impact, the Epicurean will certainly contribute to pulling the Tampa area out of the recession,” Collier said. About 120 new jobs will be created, he added.

The Aloft, a 130-room Starwood Hotels & Resorts Worldwide Inc. boutique, is scheduled to open in early 2014 along the Tampa Riverwalk in the former Mercantile Bank office building on Kennedy Boulevard.

A 4,000-square-foot rooftop meeting and outdoor terrace is planned, along with a waterfront pool and 24-hour fitness center.

The 130-room Le Meridien Hotel also is expected to open next year in the renovated century-old Federal Courthouse downtown in a project Mayor Bob Buckhorn said will help anchor Tampa’s core. It will feature stone, marble and oak trim, along with outdoor dining and a 2,400-square-foot ballroom and meeting space.

Like the hotels in Hillsborough, Pinellas also has new boutiques, which are close to downtown attractions and business centers, that are expected to appeal to a young and hip clientele. The Birchwood Inn, with 18 rooms in an early 1920s building on Beach Drive in downtown St. Petersburg, is expected to open within a few weeks.

The Hollander Boutique Hotel opened in late November with 100 rooms and rates in the range of $88 to $148.

“The original Hollander was built in 1933, and we have restored it to reflect our history,” general manager Nick Herring said.

The boutiques will create a new hotel niche and are unlikely to affect conventional hotels’ business, said Bob Morrison, executive director of the Hillsborough County Hotel & Motel Association.

“This is probably as aggressive time as we have had in the past five to seven years,” he said. “With the ongoing discussion of what may be going on in the Channelside area, all of a sudden you are not hearing any new development strategy without a hotel being included.”

But other plans may follow as a key segment of the area’s economy hit by downturns in travel and lending for construction becomes revitalized.

“There’s a very strong argument for new high-end development in the University of South Florida and Busch Gardens area, but looking at the Tampa Bay area, downtown Tampa has the most attractive, unaccommodated markets,” Plasencia said.

Plasencia is less sanguine about projects discussed for Clearwater Beach, which in recent years has gained two large luxury hotels, the Sandpearl Resort and the Hyatt Regency Clearwater Beach Resort & Spa, along with smaller, new hotels that complement the popular Beach Walk promenade that opened in 2008.

“There are several projects that we don’t believe will come out of the ground any time soon, until financing becomes more available,” Plasencia said about the northern Pinellas beach area.

“We think there are growth opportunities in downtown St. Petersburg that are much more attractive for construction financing than waterfront projects.”

He said there’s a perception among developers throughout the country that St. Pete Beach does not want more construction and that hurts the community with fewer opportunities for upscale offerings that would enhance the bed tax.

Plasencia’s observation is shared by others who are reluctant to speak openly about conflicts over zoning strategies in the southern areas of the county’s beaches.

Ten years ago, the buzz in Tampa’s visitors industry was that Westin, Hilton, Omni and Renaissance brands were likely to expand when interest rates for construction were low.

In Pinellas County, condominiums and townhouses were displacing mom-and-pop motels along the beach, creating concern about the impact on the visitors industry when no major hotels were envisioned on Clearwater Beach and points south.

“The market really grew in the early 2000s with an explosion of limited service in the New Tampa, Brandon, Hidden River and West Shore areas,” the hotel association’s Morrison said. Among those brands were LaQuinta, Courtyard by Marriott, Residence Inn and Hampton Inn.

In 2007, hospitality officials reported more than 20 lodgings and more than 3,000 rooms were planned or underway in Tampa.

But the recession’s impact on travel and investment in construction projects took a toll on hotel construction in both counties.

The numbers of rooms in Hillsborough and Pinellas counties remained flat in the past six years, and some hoteliers cut room rates in an effort to draw more business during the recession.

Hillsborough County’s inventory rose by 1,988 rooms, to 22,081, from January 2007 through December 2012, a report by Smith Travel Research of Hendersonville, Tenn., shows.

The annual average daily rate declined from $102.42 to $93.01, and annual revenue per available room dropped from $64.85 to $59.78.

Pinellas County over six years gained 296 rooms, to 18,508, Smith Travel Research said. The annual average daily rate increased from $110.57 in 2007 to $113.40 in 2012, while revenue per available room rose from $66.10 to $72.48.

Pinellas County’s visitors industry enjoyed its best year ever in 2012, with 5.4 million overnight visitors, a 3.8 percent gain over 2011, Research Data Services Inc. of Tampa reported.

“We had a lot of pent-up demand for travel, we drilled down on the core New York City and Chicago markets with massive wintertime campaigns, and the one thing we did not cut was international representation,” said David Downing, deputy director of Visit St. Petersburg/Clearwater.

Hillsborough County also posted visitor gains in 2012, with a 2.2 percent increase in visitors, including day trips, to 14.8 million. That included 6.8 million overnight visitors, Tampa Bay & Company, the county’s visitors’ bureau, reported.

The only gap in the Tampa Bay area’s marketplace is for a five-star property in Hillsborough or Pinellas, Morrison said.

Plans for a Ritz-Carlton in Tampa on the Courtney Campbell Causeway fell apart in 2008 as the economy faltered. Despite classy hotels in Tampa, St. Petersburg and St. Pete Beach, the area lacks a signature property that would enhance the image of the region worldwide.

“I’m generally pretty conservative until I see dirt turning or signs of construction,” said Alex Kaptzan, vice president of convention sales and services with Tampa Bay & Company.

“Part of me was disappointed over the minimal supply of growth the past several years, but part of me was thankful there wasn’t a glut of hotel rooms just as demand wasn’t there.”


tjackovics@tampatrib.com

(813) 259-7817

Subscribe to The Tampa Tribune

Comments