New Fort Smith hotels not expected to saturate market

Recent and ongoing hotel construction in Fort Smith will not likely result in an oversupply of hotel rooms, according to Claude Legris, executive director of the Fort Smith Convention & Visitors Bureau.

The city of Fort Smith recently issued a $4 million building permit for construction of an 81-room Best Western hotel at 6500 Rogers Ave. Lisa and Tim Whitten of Russellville are building the hotel and also plan to operate it.

It is a project that was difficult to get past city planners because that portion of Rogers Avenue has sight restrictions and numerous points of entry and exit that make traffic conditions difficult.

Lisa Whitten said the hotel should open no later than early 2010 and is confident the business will be good.

“We do love the area” and believe it is a good market for hotels, Lisa Whitten said.

Legris said Fort Smith has 2,551 total hotel rooms, and 2,094 rooms that are full-service rooms marketable to business travelers and tourists.

Of the 2,094 marketable rooms, 556 were built between 2002 and 2008, Legris said. Those additions are:
• Holiday Inn Express, 2002, 63 rooms
• Residence Inn by Marriott, 2003, 78 rooms
• Howard Johnson (renovation), 2004, 129 rooms
• La Quinta, 2007, 71 rooms
• Courtyard by Marriott, 2007, 138 rooms
• Candlewood Suites, 2008, 87 rooms

“The Fort Smith market has absorbed the new rooms pretty well,” Legris explained, “because they (new rooms) were spread out reasonably. We’re not seeing a huge influx of rooms at one time.”

Homewood Suites, a relatively upscale hotel at the main entrance of the Fort Smith Regional Airport, will open in a few months and add 88 rooms to the marketable mix, Legris said.

The relationship between hotel room supply and demand is seen in figures provided by the Fort Smith CVB.

In 2006 there was no increase in the supply of hotel rooms in Fort Smith, and the average daily rate increased 10.4% that year.

In 2007 there was 7.9% increase in the supply of rooms with a 6.3% increase in the average daily room rate.

In 2008 there was a 4.7% increase in the supply of rooms with a 3.2% increase in the average daily room rate.

Legris said the national economic downturn will not be a big hit on area hotels. He said some hoteliers in the area anticipate seeing minor dips in business travel, but are hopeful the group travel business will help keep things steady.

Fort Smith’s hospitality tax (3% of a room rate) collections in 2008 were $790,638, up more than 108% from 2001 collections of $379,347. The city raised the hotel tax from 2% to 3% in August 2001.