I very much enjoyed the downtown hotel study that took place back in 2015. Here’s the doc for others to revisit if they haven’t seen it but I’d like to share the key takeaways.
DTR_market_hotel_study_2015.pdf (1.9 MB)
Key bullet is “business travel is the primary driver of demand growth.”
It’s only been a few years so let’s just assume that’s still the case. If so, we need to see more downtown office workers as well as new businesses with locations elsewhere around the country or even international. I think that will be the primary driver of getting new hotels out of the ground.
As for bigger and taller hotels, the report suggests that a 400-room hotel is the “magic number” in getting new conventions to consider downtown. There’s risk there so I bet there hasn’t yet been a developer to try and approach that one since we already have the Marriott, the de facto convention hotel number 1 with it’s prime location and underground tunnel into the convention center.
In my opinion, as more office space gets built and the DTR worker population goes up, more of these 10-12 story, 150-200 room hotels will follow. To land a 400-room hotel, I think the city would have to consider some incentives. (that will depend on a bit of politics there too, don’t forget)
Also, $135 a night seems so affordable when you consider business costs. I can’t see it being very attractive to bring a large hotel into a market like this one and having the rates comparatively low compared to other markets. That’s my feeling but would love to see more data on this from someone who knows more.
That’s my take on the state of hotels right now.