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Hotel business heating up; growth in NM tourism spurs demand for lodging

ALBUQUERQUE, N.M. — SpringHill Suites by Marriott, Albuquerque’s newest hotel, finally opened in mid-May along the Paseo del Norte corridor – adding nearly 100 rooms to the local lodging pool.

The $10 million, four-story hotel at 5910 Holly NE was more than a decade in the planning; its development was delayed when the recession hit.

With the state’s economy now showing improvement and New Mexico’s tourism numbers rising, construction of new hotels during the past year has boosted the number of rooms in the metro area by nearly 500.

And while that might seem like a lot, it represents growth of less than 1 percent in the Albuquerque area’s lodging supply, according to CBRE Americas research of hotel supply expansion in selected U.S. cities.

Compared to hard-charging metro areas like Nashville, Austin and Miami, where new hotels are being built at a breakneck pace, the Albuquerque area is seeing a very modest influx of new rooms coming into the hospitality pipeline, said Tania Armenta, president and CEO of Visit Albuquerque, a destination marketing organization.

The 94-room Marriott-branded SpringHill Suites recently opened for business at 5910 Holly NE. (Steve Sinovic/Albuquerque Journal)

The new SpringHill Suites location bolsters parent company Total Management Systems’ lodging portfolio of six properties in the state, including several Hilton and Marriott brands that are targeting both business and leisure travelers, usually along or near heavily traveled interstates. The Holly property sports a clean, contemporary look, mid-level rates that start at $129 a night, a fitness center, a breakfast buffet, a saltwater pool and a guest lounge offering evening light fare and beverages. The hotel provides 40 full- and part-time jobs.

Because it’s new, the hotel is bound to generate interest among visitors, especially those attending the Albuquerque International Balloon Fiesta come fall and shoppers checking out New Mexico’s lone Cabela’s store nearby, reportedly a tourist draw in its own right, Assistant Manager Kayla Thomsen said.

“But our hotel won’t be new forever. So it has to be our customer service and amenities that keeps them coming back,” she added with a smile.

The new business will be competing for lodgers against longtime existing chains and boutique hotels, other new properties that have recently opened and additional hotels that are on the drawing boards, especially on the limited-service front. Limited-service hotels, like SpringHill, offer many of the same high-quality amenities that guests expect from full-service hotels with one significant difference: They lack the dedicated revenue-producing food, beverage and catering components.

The new landscape includes:

• A Marriott-branded Fairfield Inn & Suites, which opened an 89-room hotel in the North Interstate 25 corridor in January.

• Another SpringHill Suites by Marriott, which will be part of the mixed-use Highlands project across Central Avenue from Presbyterian Hospital. Once built, the Titan Development project will have all the amenities expected of a modern hotel, including a large glass vestibule and lobby area overlooking Central. The hotel’s third floor will be the home of the Ronald McDonald House of New Mexico. A room count, groundbreaking date and construction costs are pending,

• Albuquerque’s first Tru by Hilton, which is slated to break ground later this year after the new owner tears down a long-shuttered restaurant at Jefferson and I-25 where Landry’s Seafood and Claim Jumper once did business. On the site, an 85-room hotel will rise.

Attracting lodgers also is important to the bottom lines of New Mexico’s tribes and pueblos, which draw visitors to tribal attractions, casinos, resorts, museums and cultural events. Several are investing heavily in hotels, mostly the limited-service product, which typically range from 75 to 100 rooms.

The Sandia Mountains are the backdrop to the recently opened Santa Ana Star Casino Hotel, a 204-room property.

Clearly not in that category, Santa Ana Pueblo spent $85 million to build a seven-story, 204-room hotel next to the Santa Ana Star Casino Hotel, and it recently spent $5 million on renovations to guest rooms at its Hyatt Regency Tamaya Resort & Spa.

And Indian Pueblos Marketing Inc. is moving forward with plans to open a new hotel and restaurant at Avanyu Plaza, near the Indian Pueblo Cultural Center. A four-story Marriott Town Place Suites is expected to break ground this fall for an 89-room extended-stay hotel, which will be the organization’s second foray into the lodging business.

Armenta said some of the recent arrivals provide more options for travelers, especially for a brand like Marriott, which brings loyal customers to the area with its rewards programs. Benefiting the future pipeline are the high-profile nods Albuquerque has received from Sunset Magazine and USA Today, which spotlighted the city’s culture, cuisine and attractions. “That kind of raises our profile from a hotel development standpoint,” Armenta said.

The reception area at the Hotel Chaco near Old Town features native-themed art and decor. New Mexico-based Heritage Hotels & Resorts developed the property. (Adolphe Pierre-Louis/Albuquerque Journal )

Air travel is also on the rise, and an increase in flights to the city will benefit all categories of hotels, suggested Armenta. As of June, the Albuquerque airport recorded a 12.2 percent increase in passenger traffic over the previous year.

The upbeat coverage dovetails with initiatives by tourism agencies at the city and state levels to promote travel here, either vacations by out-of-towners or staycaytions by locals.

Albuquerque’s hotel occupancies have risen each year since 2012, and the average daily rate is also climbing, according to Smith Travel Report. “We’re well-supplied,” Armenta said of the lodging choices available for travelers of all budgets. That includes Hotel Chaco, a 118-room luxury hotel in Old Town that a national publication saluted as one of the 10 best hotels to have opened in the U.S. in 2017.

Charlie Gray, executive director of the Greater Albuquerque Innkeepers Association, an industry trade group, said some of the new product coming into the market is to satisfy demand for the upgraded amenities people are looking for today, which means existing properties are facing more competition as they vie for the same customer pool.

Some of the association’s members are refreshing aging hotel stock in order to keep heads in beds, said Gray. “If they are affiliated with chains, they absolutely have brand standards,” he said.

In the past year, Albuquerque Marriott Pyramid North completed a $3 million renovation, Hotel Cascada rebranded as Wyndham Hotel & Conference Center following a $5 million renovation and the Sheraton Airport underwent a $4.5 million renovation by its new ownership.

Owners of Los Poblanos Historic Inn & Organic Farm invested in a $15 million upgrade, which included expanding its room count from 22 to 50. (Marla Brose/Albuquerque Journal )

One homegrown operator, Los Poblanos Historic Inn & Organic Farm, invested in a $15 million upgrade, which increased its room count from 22 to 50, tripled the size of its Farm Shop and moved James Beard Award-nominated chef Jonathan Perno’s restaurant to a newly renovated barn space.

Providing a home away from home is one lodging provider’s approach. Late last year, The Siegel Group, a Las Vegas, Nev.-based real estate investment and management company, acquired a 244-unit property previously operated under both the Travelodge and Super 8 motel brands. Purchased for $4 million, the property, now called Siegel Suites Select, is at the Big-I. It is the second extended-stay location the Siegel Group has opened in Albuquerque since first entering the market in 2015.

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Pueblo center flourishes thanks to its lodging

An example of a Towne Place Suites by Marriott, which will soon be rising on pueblo-owned property at Avanyu Plaza at 12th Street and Indian School Road. (Courtesy of Indian Pueblo Cultural Center)

One hotel has brought so much business to the Indian Pueblo Cultural Center that the pueblo-owned organization is expanding its lodging portfolio to accommodate more visitors.

With 400,000 visitors a year, the cultural center already operates the Holiday Inn Express & Suites Albuquerque Historic Old Town.

“The Holiday Inn is doing really well, but it’s mostly one-night” lodgers, many of whom take in the nearby museum, gift shop and restaurants, said Michael Canfield, president and CEO of the entity that manages the cultural center and nearby businesses. It is also redeveloping other portions of the 80 pueblo-owned acres near 12th Street and Indian School NW.

The convenience of a nearby hotel is one reason revenue at the cultural center’s museum rose 20 percent from last year, said Canfield.

Ground is expected to be broken later this year on the Marriott Towne Place, with a projected opening in fall 2019. It is expected to create 75 construction jobs, and nearly two dozen more operational jobs after opening.

Canfield said the hotel properties will complement and not compete with each other. The new Marriott will be geared to the longer-term visitor, mostly business travelers. While the suites come with kitchenettes, Canfield expects many of the visitors to patronize the nearby Starbucks, Laguna Burger and a new eatery by restaurateur Myra Ghattas, well-known for her Slate Street Café. She plans to open the restaurant Sixty-Six Acres next to Laguna Burger.

Canfield said the Indian Pueblo Cultural Center is close to lining up financing on the project, the total cost of which he declined to reveal, but he did say it would feature “some native flair” in the decor and interior design.

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