Business Dollars Spur Hotel Boom

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Visitors to Northwest Arkansas have more options than ever when it comes to lodging and 2008 will likely stand as the biggest single-year increase of hotel rooms in Northwest Arkansas for some time.

Between January 1 and June 30, 711 guest rooms were added at seven hotels and another hotel, Mainstay Suites in Rogers, is slated to add 96 more rooms in late August.

That’s near double the 461 rooms that debuted in 2007, and more than triple the 236 that became available in 2006. In all, there are more than 7,360 rooms for let in Benton and Washington counties.

Some in the hotel industry said the region has reached saturation, and advised any new would-be hoteliers to hold off for the time being.

“I definitely don’t think there should be any building for a while,” said Chris Clifton, general manager of Holiday Inn & Suites in Rogers, which opened June 10.

Weekends are still tough times for many hotels, with the exception of certain University of Arkansas football games and events such as Fayetteville’s thunderous Bikes, Blues & BBQ.

The economic slowdown has also been a concern for an industry that relies heavily on business travel. Many businesses are cutting back on expenses, and travel, meetings and conventions have sometimes been scaled back or even cut completely.

There is, however, somewhat of a silver lining to the downturn. When consumers are looking to save money, many turn to Wal-Mart Stores Inc. More business for Wal-Mart means more business travel to Bentonville and surrounding cities.

“Due to the economy, there could be a slowdown,” said Pam Mock, general manager of Aloft in Rogers, which opened June 26. “But with Wal-Mart, [retail suppliers] still have to come to Northwest Arkansas.”

Reception to the trendy, $13 million upscale hotel has been “amazing,” Mock said. Typically, business slowly starts building with a new hotel, but the staff at Aloft has been keeping busy, she said.

During the hotel’s third week open, its rooms were completely booked, she said.

Big Business

Vendors and business travel are also a big part of business at Doubletree Guest Suites in Bentonville. The hotel opened February 23.

“It’s been going well,” said Tammy McDaniel, marketing director for the hotel. “Of course, like most of Northwest Arkansas, we benefit from business travel. Weekends have been a little bit slower, but we’re very pleased with how we have opened.”

Stephen Salay, general manager of Doubletree, said weekends have been “hit or miss.”

“With the close proximity to the home office of Wal-Mart, a great deal of our guests are vendors, and that continues to grow daily,” Salay said.

Weddings and receptions have helped fill rooms over the weekends, as have visiting sports teams such as the University of Tulsa Golden Hurricane, which will bring in players, plus coaches and staff, for a total of about 67 rooms.

But sporting events don’t carry the day for every hotel.

Business on football weekends largely depends on which team the Hogs are playing and whether it’s an afternoon game or an evening game, Salay said.

The idea that all of the hotels in the region automatically fill up during a football weekend is “a bit of a misconception,” he said.

Another factor in football weekend business is price. Doubletree has lowered its weekend rates from $109 to $99 to try to attract out-of-towners, but it can be hard to compete with other hotels that can offer rates of $59 or less, Salay said.

The hotel has also begun selling weekend packages, such as “golf,” “spa” and “stay-and-play,” which is aimed at families that are opting to vacation closer to home. The “stay-and-play” package includes tickets to area attractions and perks like pizza and popcorn in the rooms.

Sporting Chance

Although it wasn’t really designed to cater solely to weekend athletic business, the Staybridge Suites on 15th Street in Fayetteville – which opened in March – is perfectly positioned to take advantage of its proximity to the UA.

Though it’s an extended stay format, track and baseball events have “made for consistent bookings,” said Abby Hobbs, acting general manager for Staybridge.

An average stay at the hotel is 15 days to 30 days, but there have also been a lot of one- to two-night stays, she said, adding that “our bread and butter is 30-plus days.”

Hobbs has been handling general manager duties at Staybridge, but is also on the sales team at the Bentonville Doubletree, which is also owned by Tom Bhakta.

Demand for hotel rooms has dropped off recently, and is not as aggressive as it was a year or two ago, she said.

“It’s not coming toward you as much,” and sales directors really have to work to get business, Hobbs said.

But Fayetteville is a bit different, and there will always be a certain amount of demand because of the UA, she said.

Another new addition to the Fayetteville hotel market is Candlewood Suites, on Sixth Street. It too is a suite-style hotel that is just a short walk or bus ride away from UA athletic venues. The hotel has 78 guest rooms and opened in April.

Nonetheless, most weekends will likely remain a challenge to hotel operators. The addition of so many new hotels will make it harder on older ones, Clifton said. Hotels will have to rely on outstanding customer service and maintaining quality, as well as incentives like customer loyalty programs.

Clifton has been in the hotel market in Northwest Arkansas for more than three years, and said that though weekends are tough, conferences and events at the John Q. Hammons Convention Center and upcoming attractions such as Crystal Bridges Museum of American Art in Bentonville, will help fill hotels on Saturday and Sunday.

 In addition to more rooms, the new hotels are also adding more meeting space to the market. Between six of the new hotels, 13,788 SF of meeting area was made available, with most at the Doubletree, which has 8,690 SF on hand.

Other new hotels include a Microtel in Bentonville and one in Rogers, both owned by Jagtar Dhaliwal, and Mainstay Suites in Rogers. Mainstay is owned by Jam Group LLC.