Revenue Rising in Hotel Market

For the seventh consecutive year, the Embassy Suites Northwest Arkansas in Rogers was the top hotel in Northwest Arkansas in terms of room revenue.

The 400-room property overlooking Interstate 540 collected $10.59 million in room revenue in 2011.

That’s a 5.4 percent increase from a 2010 total of $10.05 million. The amount also represents $1 million more than the next three hotels combined on the Northwest Arkansas Business Journal’s annual hotels list.

Rounding out the top five last year were the Holiday Inn Northwest Arkansas in Springdale ($3.39 million), Doubletree Suites by Hilton in Bentonville ($3.16 million), Aloft Hotel in Rogers ($2.98 million) and Courtyard by Marriott in Fayetteville ($2.75 million).

The Embassy Suites, owned by Springfield, Mo.-based John Q. Hammons Hotels Inc. and opened in May 2003, has eclipsed the $10 million threshold in room revenue four consecutive years, with a high-water mark of $12.05 million in 2008.

The property reached 400 available rooms in July 2007 with the opening of a 152-room spa tower, built to accommodate the adjacent John Q. Hammons Center.

Hotels had to make at least $500,000 in room revenue to be included in the list. Totals are based on sales tax figures provided by each city.

The growth enjoyed at the Embassy Suites was reflected throughout the market. Nine of the top 10 hotels in the area saw a room revenue increase in 2011 from the previous year.

Collectively, the 53 hotels ranked in this year’s list combined for $83.06 million in room revenue, an increase of 7.9 percent from 2010.

Of those properties that are ranked on our list, 18 are in Fayetteville, 12 in both Rogers and Bentonville, 10 in Springdale and one is in Siloam Springs.

Of Northwest Arkansas’s four largest cities, ranked hotels in the city of Rogers generated a combined $29.23 million in 2011, an 8.7 percent increase from 2010.

Fayetteville hotels generated $21.95 million (7.49 percent increase); Bentonville hotels brought in $17.12 million (7 percent increase); and Springdale hotels had $13.36 million (11.7 percent increase) in 2011 revenue.

The Inn at the Mill in Johnson declined to provide its revenue figures, so it is included in the list but not ranked.

 

Double Talk

Of the top 10 hotels, two properties enjoyed double-digit increases in room revenue in 2011 — the Holiday Inn Northwest Arkansas in Springdale and the Aloft Hotel in Rogers

The Holiday Inn, also a John Q. Hammons property and located near the junction of Interstate 540 and Highway 412 in Springdale, brought in $3.39 million in room revenue last year, an increase of about 16.5 percent from 2010.

In its third full year of operation, the trendy Aloft Hotel, in the portfolio of Fort Smith-based CSK Hotels, increased its room revenue by 16.4 percent to $2.98 million in 2011.

A few seconds of national exposure could benefit Aloft’s revenue stream even further in 2012.

The hotel received a short plug late in 2011 during a taping of NBC’s “Today” show.

Because of the buzz surrounding the opening of Crystal Bridges Museum of American Art in Bentonville, Nilou Motamed with “Travel & Leisure” magazine included the area as a top travel destination in 2012 while filming the segment with host Matt Lauer.

Aloft was Motamed’s choice of a place to stay for travelers planning a trip, and a handful of photos of the building’s interior and exterior were included in the segment.

At the Holiday Inn, general manager Roger Davis said the hotel’s bottom line improved due to the completion of a large-scale $6.5 million renovation project.

“It’s always easier to sell a hotel that’s been renovated; certainly that did help,” Davis said. “We had the newest rooms [of any hotel] in Northwest Arkansas.”

The 18-month process was completed in February 2011, and modernized the 206 guest rooms, public areas, restaurant and meeting and convention space. The hotel now has just more than 50,000 SF of meeting space to better serve large groups.

“Mr. Hammons always said you need large meeting space to look after your group business,” Davis said. “Our group business significantly improved in 2011 and even [so far] in 2012, it’s significantly higher than 2011.”

Davis, a member of the Springdale Advertising & Promotions Commission, said the renovation rejuvenated the hotel’s signature atrium, turning it into more of a focal point for guests

The lobby, pool, business and fitness centers were also revamped.

“We’ve had corporate groups coming in once again,” he said. “When the market leaders are buoyant, business groups once again start to build. Your Tysons, Wal-Marts, J.B. Hunts — when they get busier, the whole economy is busier. And better.”

 

Establishing a Presence

In total, 22 of the 53 hotels ranked in this year’s list realized a revenue increase of at least 10 percent in 2011.

Comfort Inn & Suites on Steamboat Drive in Fayetteville increased its room revenue by 54.5 percent.

Three properties in Rogers saw a revenue increase of at least 20 percent — the Holiday Inn and Suites, Country Inn & Suites and MainStay Suites.

TownePlace Suites by Marriott, opened in 2009, jumped about 38 percent in its room revenue to $1.37 million.

Leah Hendricks, the hotel’s director of sales, said a concerted effort was made to clearly establish and market the property’s location.

TownePlace has a physical Springdale address — which hasn’t always been the case, Hendricks said — though it’s located just off Interstate 540 at the Johnson exit.

“As a matter of fact, we thought we were in Johnson [when originally opened],” Hendricks said. “It wasn’t our decision to change it. It was the city [of Springdale].”

The Inn at the Mill, directly across Greathouse Springs Road from TownePlace, even has a Johnson address.

“There for a while, people were not really aware of our hotel,” Hendricks continued. “Local people may, but not nationally on a corporate level. A business traveler in Denver trying to book [a room] in this area is not going to look in Johnson.

“It’s a unique situation; this address is even [classified] in the Fayetteville School District.”

Simmons Suites in Bentonville more than doubled its revenue in 2011 with $901,676, an increase of 114 percent after an uncertain 2010.

Simmons First Bank of Northwest Arkansas took ownership of the property, built in 2007, in March 2010 after a legal dispute involving the previous owner.

Beechwood Hospitality was hired to manage the hotel at that time. One month later, Bryan Rose was hired as the general manager.

Rose said the remainder of the year was a “re-ramping” process.

“Almost like a re-opening,” he said. “We started fresh with our marketing and everything from the ground up.”

While 2011 was good, Rose said 2012 is shaping up even better. Starting in April, revenues, he said, have been skyrocketing.

“The main thing we are looking for is a continued month-over-month increase and we’ve been lucky enough to see that,” he said.

Not surprisingly, Rose said the hotel is enjoying a big jump in tour business this year.

The hotel sits near the exit at the junction of Interstate 540 and Highway 72, a primary entryway to the Crystal Bridges Museum of American Art.

“We’ve had several tour bus groups come through,” Rose said. “There were a lot of tour companies that were doing Branson- or Eureka Springs-type tours. Now with Crystal Bridges, they’ve added Bentonville into that mix. We’re now part of the touring circuit.”

 

Counting Carnall

The 50-room Inn at Carnall Hall, on the northeast corner of the University of Arkansas campus at Arkansas Avenue and Maple Street, had total revenues in 2011 of $2.08 million.

That figure reflects a combination of both room revenue and food and beverage revenue.

The property includes a popular formal restaurant, Ella’s.

Norm Toering, hired as the Inn’s general manager in June 2011, said the room revenue in 2011 was $1.25 million, up 13.6 percent from the previous year, and that is the total reflected in our list.

In terms of revenue per room, that total ranks the Inn at Carnall Hall No. 2 among all Northwest Arkansas hotels with $25,000 per room in 2011 (see chart).

Toering said the boutique hotel’s occupancy rate is up markedly from this time a year ago, which is leading to even higher revenues this year.

“This year is 10 times better than 2011,” he said. “To give you an example, last year we ran at 62 percent occupancy in the month of June. This year in June we were at 80 percent [occupancy].”