NOTABLE METRO ATLANTA HOTEL PROJECTS:
Hotel: Homewood Suites by Hilton
Where: Downtown Atlanta
Rooms: 129 suites
Status: Planning stage
Hotel: Hyatt Perimeter Atlanta at Villa Christina
Where: Dunwoody
Rooms: 177
Status: Opened in June
Hotel: Hotel Indigo
Where: Downtown Atlanta
Rooms: 200
Status: Planning stages
Hotel: Hyatt House
Where: Downtown Atlanta
Rooms: 150
Status: under construction
Hotel: Hotel at Georgia World Congress Center
Where: Downtown
Rooms: 800-1,000
Status: Still in the discussion phase
Hotel: Hilton Garden Inn Buckhead
Where: Buckhead
Rooms: NA
Status: NA
Hotel: Aloft
Where: Downtown
Rooms: 254
Status: opened in April (replaced the Days Inn Atlanta)
Metro Atlanta is back in the hotel construction business, six years after the segment all but flat-lined because of the recession.
At least eight hotels, including the Hyatt Atlanta Perimeter at Villa Christina, Aloft in downtown Atlanta and Hilton Garden Inn Buckhead, have either been completed or are in the construction or planning stages.
Hospitality leaders and hotel operators attribute the uptick inside and along the perimeter to a boom in visitors — a record 45 million in 2013 — and the return of the business traveler, the bread-and-butter of metro Atlanta’s $13 billion hospitality business.
They add that the recent opening of the National Center for Civil and Human Rights and the upcoming debut of the College Football Hall of Fame, along with the high-end shopping mecca of Buckhead, is driving more business for hotels.
It’s a construction surge unparalleled since the heady days between 2004 and 2007 when money flowed freely for new hotels amid an easy-credit economy and the promise of new attractions such as the Georgia Aquarium and the World of Coca-Cola.
At about 95,000 rooms across the 16-county area, metro Atlanta is the seventh largest hotel market in the country, and proceeds from booked rooms contribute billions to city and county coffers. That includes an earmark of $200 million from hotel tax collections for the cost of the new $1.2 billion stadium for the Atlanta Falcons, hospitality leaders said.
“We’ve become more attractive as a destination because of all the attractions that we have set to open,” said Paul Breslin, principal at Horwath HTL, a hospitality consulting company. “All of that is creating a buzz for advanced bookings.”
But if past is prologue, there is reason to temper that enthusiasm. Hospitality leaders acknowledge that in the past metro Atlanta’s supply outpaced demand and that the construction pause caused by the recession was necessary to better align the number of rooms with demand.
A handful of properties were adapted for other uses, including the Wyndham Garden Hotel and Baymont Inn and Suites on Piedmont Avenue, which were taken over by Georgia State University for dormitories.
There also is concern about Atlanta’s long history of overbuilding during booms and suffering longer than similar-sized cities during the busts.
The Atlanta Braves move to Cobb County is expected to affect downtown hotels, which count on the team’s fans to fill rooms during the summer months when convention and business travel slows.
William Pate, president of the Atlanta Convention and Visitors Bureau, is unfazed. He said the lure of downtown attractions such as the aquarium will keep most Braves fans in town, especially since the team’s new home will only be a few miles away.
“We will lose some value-oriented customers,” said Pate. “But I believe 80 to 85 percent of the business will stay.”
Overall, Pate said, metro Atlanta hotels are doing well. Room occupancy has hit 73 percent and the ACVB has booked 21 “citywides” for this year and 23 for 2015. Those are big conventions that fill rooms from downtown to the Perimeter area.
Good press of late has helped, Pate said. The New York Times listed Atlanta as one of its 52 places to visit in the world in 2014 while USA Today readers ranked the city the fifth best convention town.
Helping to calm jitters about the construction surge this time around is the type of hotels in the pipeline. The properties, which also include Homewood Suites and Hotel Indigo, are moderately priced and more affordable to consumers still struggling despite the improving economy.
That is in contrast to the last boom when the city added marquee luxury brands such as three W hotels, a boutique Palomar in Midtown and a St. Regis and Rosewood (later reflagged as a Mandarin Oriental) in Buckhead. The properties were greenlit because the metro Atlanta market was considered to be under-represented by luxury brands.
Jim O’Connell, director of sales and marketing for the Hyatt Atlanta Perimeter at Villa Christina, said opening a hotel is all about timing. The lodger — which started construction in the fall of 2012 and welcomed guests last month — has come online at a time when bookings are close to their 2007 peak because of increased business travel and more conventions.
The property also benefits from strong weddings business at Villa Christina, the events center next door, he said.
“Corporate America is a lot more stable and all the indicators are pointing in the right direction,” he said. “Middle America is still taking staycations, though that is starting to come back, too.”
Property availability also is prompting hotel development, said Mary Dogan Winslow, director of brand management for Hotel Indigo. The brand will turn the second- through ninth floors of the 27-story 230 Peachtree building in downtown Atlanta into a Hotel Indigo.
The Hotel Melia in downtown Atlanta also is being reflagged as a Crowne Plaza and Staybridge Suites co-branded hotel.
“This is what we do best,” Winslow said of the Indigo project. “Because we don’t have a prototype design, we are able to come to the table with a creative solution.”
The new Indigo, the third property in the brand’s hometown of Atlanta, will benefit from an attachment to the AmericasMart building, home to one of the biggest twice-annual retail conventions in the nation. The other floors of the building will remain as offices, another source of guests for the brand.
“The great news is demand is back and consumers have higher discretionary income and they are willing to spend again,” she said.
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