Downtown adds five hotels, more than 2,000 rooms
St. Louis Business Journal - by Rick Desloge
In the next 18 months, downtown St. Louis will see more than 2,000 new hotel rooms created from five area hotels.
That might be enough to cause some hotel operators to lose sleep worrying about room vacancies -- or price-cutting by competitors. Yet most downtown hotel operators view the growth as a sign of economic vitality.
"The hotel development is a precursor to residential development. People staying in hotel rooms and people living downtown are two ways to get that vibrancy after 5 o'clock," said Robert Bedell, president and chief executive officer of the St. Louis Convention & Visitors Commission.
Smaller hotels will go after smaller meetings, business and leisure travelers, he predicted, not conventions.
What is more likely than price slashing is that the older hotels will be forced to upgrade their rooms, said hotel developer Don Breckenridge. He is converting the mural-covered Edison warehouse overlooking U.S. 40 into a Crowne Hotel and expects construction to start this year.
However, Fred Kummer, the chief executive of HBE Corp., which owns the 910-room Adam's Mark, predicted the planned convention hotel alone would be disastrous for the St. Louis economy.
"The occupancy will be going up and down like a yo-yo. Who ever is carrying the mortgage on that hotel better get ready to take it back. It's going to be empty a lot of the time, and that's going to provide unstable employment," said Kummer. The Adam's Mark Hotel currently is downtown's largest hotel.
The five new downtown hotels are:
• The $244-million Marriott Renaissance Hotel, designated as a convention headquarters hotel by a mayoral committee which selected the development team, Historic Restoration Inc./Marriott Hotels. It will renovate the historic Gateway and Lennox hotels, along Washington Avenue across from the America's Center, into a 1,070-room hotel complex.
• The Drury Plaza, with 364 rooms, will open near the end of the year at Market and Fourth streets.
• A $79-million Westin St. Louis hotel is under construction at 811 Spruce St., and includes converting part of the Cupples Station complex into 224 hotel rooms.
• Crowne Plaza, a $50-million plan from Breckenridge-Edison Development, will convert the Edison warehouse, overlooking U.S. 40 at 400 S. 14th St., into 292 hotel suits and three floors of condominiums. Construction should begin by the end of the year.
• Homewood Suites, is converting part of the Merchants Laclede Building, 410 Olive St., into 81 units.
In addition, downtown likely will be affected by a new hotel across the Mississippi River. The Crown Hotel, a $14.5-million project under construction in East St. Louis will add 157 rooms, though primarily to serve the gaming boat crowd for the nearby Casino Queen.
Westin, a luxury chain, appeals to travelers willing to pay a higher rate for premium service. The hotel here, next to Busch Stadium, will have a total of 5,000 square feet of meeting space and probably will compete with the Ritz-Carlton in Clayton.
"Most of the people we'd appeal to probably are not staying downtown now anyway. There's a backlog of people who want to stay at Westin Hotels," said Stan Mulvihill, vice president of McCormack Baron & Associates, the Westin developer.
"At most, (The Westin) will be able to hold a meeting for 170 people," said Gary Andreas, an analyst with Tellatin, Louis, Andreas & Short Inc. in Chesterfield, who follows the hotel industry. "The Adams Mark, Hyatt and Ritz-Carlton will notice the competition.
"If you take a look at the Westin, they're building a quality of hotel that's not currently downtown. They'll probably pull business from the Ritz-Carlton (in Clayton)."
Andreas predicted the Westin will help all the downtown hotels notch up their nightly rates. Rooms in most of the larger hotels now typically run $90 to $130 a night.
Downtown St. Louis hotels consistently fill to between 70 and 71.5 percent of capacity, Andreas said, with the figures running lower in winter and higher in summer -- much higher when the St. Louis Cardinals are in town.
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