New Lodging Options Offer Suite Stays

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Along with the dramatic rise in business travelers heading for Northwest Arkansas in recent years has come a demand for more lodging. Developers are trying to keep up with the need for more rooms, but the point at which the market could become saturated is a concern for some.

Estimates vary slightly, but somewhere in the neighborhood of 1,200 to 1,500 more hotel rooms will be ready in the next year.

Several new hotels have opened already, many of which are extended stay operations seeking to cater to Monday through Thursday traffic.

At the same time, some upscale, high profile hotel developments have experienced setbacks ranging from temporary to terminal.

The Barber Group’s proposed $70 million Divinity project in Fayetteville is dead after a protracted legal battle over how the project was approved by the City Council.

Construction of a $100 million Westin hotel in Rogers – another Barber venture, this one a partnership with Sage Hospitality Resources of Denver and The Pinnacle Group – is up in the air. The original location of the hotel was scrapped and the new site is closer to Embassy Suites. The project was approved by the Rogers Planning Commission May 1, but Brandon Barber and The Pinnacle Group would not comment on the project.

The Renaissance project in downtown Fayetteville has been pushed back for various reasons, including franchising processes with Marriott International Inc. It was originally slated to open this fall.

Developers Richard Alexander and John Nock said Marriott’s corporate review of the hotel plan is 70 percent to 80 percent complete, excavation work is finished and foundation construction should begin within two months.

The deadline for the Renaissance is now set for early 2009, depending on factors such as weather.

“If we’re lucky, it’ll be 18 months, if we’re unlucky it’ll be 22,” Alexander said.

The final project budget is about $45 million. Add to that $24 million for the recent purchase and ongoing renovations of the Cosmopolitan (formerly the Radisson) along with restaurants and adjoining properties in the area, and the pair will have invested between $150 million and $200 million on cultivating what Nock called a “downtown identity” for Fayetteville.

Suite Deal

Several of the newer hotels in the area feature suite-style rooms with kitchenettes, dishwashers, on-site laundry and other such amenities to make the business traveler comfortable.

Some hotels, such as Holiday Inn Express & Suites in Fayetteville and Fairfield Inn & Suites in Springdale, have altered their names in the last year to reflect this focus on extended stay features.

Two Marriott suite-style hotels opened in Rogers in the last few years. Fairfield Inn & Suites and Residence Inn by Marriott opened in 2002 and 2003 respectively.

Fairfield Inn & Suites in Springdale and Country Inn & Suites in Fayetteville both opened in 2003, while La Quinta Inn & Suites in Bentonville opened in 2005.

Others are on the way. Staybridge Suites will be opening later this year in Rogers and Fayetteville.

Aloft – a new hotel brand from Starwood Hotel & Resorts Worldwide – is scheduled to open in Rogers in the first quarter of 2008. Aloft is aimed at younger business travelers. About 30 of the hotels are being developed, but the Rogers location will be the first to open. Starwood also operates Sheraton, W and Westin hotels.

One of the most recent additions to the market is Simmons Suites in Bentonville, which opened in March. Owner Charles Simmons said the $12 million hotel was designed to offer lodgers the comforts of home that aren’t available at many standard hotels.

Simmons’ rooms feature kitchens with full-size refrigerators, stoves, dishes and cooking utensils.

An 18-passenger bus carries customers around the area in style, with limousine luxuries and a 42-inch plasma screen TV in the back.

The hotel is focused on providing a level of comfort for business travelers – especially those in the Wal-Mart vendor community – that goes a step beyond what is offered by the competition, said Simmons team member Drew Daniel.

“Probably 95 percent of our business is vendors or professional travelers,” Daniel said. “And that is what this hotel was built for.”

Business has been very good so far, and is increasing from week to week. Daniel said most of the hotel’s business is repeat customers, adding that many have moved their accounts to Simmons Suites after a single stay.

“We want people to come to the hotel as a guest and leave as a member of the Simmons family,” Daniel said.

Overall Occupancy

Many of these suite hotels are booked solid through the workweek, but tend to empty out on the weekends, except during game weekends and big regional draws such as Bikes, Blues & BBQ.

Nonetheless, occupancy rates for hotels in the area are very good in general, said Tom Reed, owner of Real Estate Market Data and partner in Streetsmart Data Services Inc. of Fayetteville, which publishes quarterly reports on the Northwest Arkansas economy.

For the first quarter of 2007, Reed surveyed about 5,000 rooms scattered along the Interstate 540 corridor, and found occupancy rates in the range of 63 percent to 72 percent.

“That’s why there is so much construction now,” Reed said of the hotel boom. “The facilities are experiencing good occupancy rates.”

Reed estimated that about 1,200 rooms are currently either under construction or in the planning stages in Northwest Arkansas. If all of the proposed rooms end up opening, “we could reach market saturation,” he said.

But it is also important for hotel development to keep up with economic expansion in the area, he said.

As of mid-July, there were 1,630 hotel rooms in Rogers, said Tom Galyon, executive director of the Rogers Convention and Visitor’s Bureau. That number is expected to increase to 2,600 in a year, he said.

Tax revenue from hotels in Rogers in May was up 25 percent from the year before, while receipts for the first five months of 2007 were up 17 percent year over year, he said.

“It’s indicative of the growth we’ve seen in this area,” Galyon said.

In the downtown and Dickson Street areas of Fayetteville, the focus has been on getting up to speed with enough rooms to attract more convention and meeting business.

A large part of that focus is the Renaissance project, which will add 200 rooms to an area that isn’t exactly overflowing with lodging.

“We are waiting with bated breath for Renaissance,” said Allyson Twiggs, director of the Fayetteville Visitor’s Bureau. The hotel will be very important for the area, she said.

“We really need more rooms downtown,” Twiggs said.