connecticut hotel developers undaunted by possibility of … · 2019-12-09 · extended-stay...
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Connecticut hotel developers undaunted bypossibility of recessionLuther TurmelleDec. 7, 2019 Updated: Dec. 7, 2019 8 p.m.
Hotel construction in Connecticut continuesunabated, even as economists are predictingthat the state and the nation will fall intorecession sooner rather than later.
Nearly every direction you turn, it seems as ifConnecticut is going from becoming TheLand of Steady Habits to the Home of NewHotels. Here are a few examples:
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The Pizza Pay Phone booths to order pizza fromPepe's Pizza or Modern Pizza at the boutiqueGraduate New Haven hotel, formally the Duncan ......
Photo: Peter Hvizdak / Hearst Connecticut Media
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Homewood Suites last week opened itsextended stay hotel on Marsh Hill Roadinterchange off of Interstate 95, adjacent tothe entrance of Yale University’s WestCampus.
Wallingford’s Planning and ZoningCommission has approved two new hotelsthis year for the Exit 15 interchange ofInterstate 91, an area that already has fourexisting hotels, according to Tim Ryan, thetown’s economic development specialist.
New Haven has seen two boutique hotelsopen this year, The Blake and Graduate. TheBlake was new construction, while Graduate
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New Haven was a renovation of the formerDuncan Hotel.
The Elm City also is getting a new gardenhotel on the site of the former Webster Bankbranch on Elm Street. Demolition of theformer bank branch got underway a shorttime ago.
The first new hotel branch in North Havenin at least three decades will be built onUniversal Drive near the Cinemark movietheater.
A new Fairfield Inn is the works on the siteof the former Howard Johnson Lodgeproperty at 1052 Boston Post Road in Milford.
Ginny Kozlowski, executive director of theNew Haven-based Connecticut LodgingAssociation, said the only area served byHearst Connecticut Media publications thatdoesn’t have any real new hotel constructionto speak of is in Stamford. Business travelers,who are mainstays of the extended-stayhotel business, are opting for staying inapartments, accessed either through onlinemarketplace Airbnb or through theircompany’s travel contacts, according toKozlowski.
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“The Shelton area is new development andso is the Danbury area,” she said.
Is Connecticut becoming oversaturated withhotels? Kozlowski doesn’t think so.
“Consumers are very loyal to brands and sodifferent hotels are staking out differentniches,” she said.
For example, The Graduate New Haven andThe Blake are considered boutique hotes,said Randy Fiveash, the director of theConnecticut Office of Tourism.
“People aren’t just looking for a roomanymore,” Fiveash said. “They’re looking forexperiences.”
As an example of that, he cited The Blake’sHigh George rooftop restaurant. Anotherexample, he said, is the hotel space atFoxwoods Resort Casino, which has theHighFlyer Zipline and indoor go-kart track.
New hotel development in Connecticut ismicrocosm of what is happening in theUnited States as a whole.
Analysts at Lodging Econometrics, aPortsmouth, N.H.-based industry consultant,reported last month that the U.S.
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construction pipeline for hotels stood at5,704 projects with 700,496 rooms. That’s up6 percent in terms of the number of projectsand 8 percent by the number of rooms on ayear-over-year, according to the group’sanalysts.
Furthermore, the total number of hotels androoms in the construction pipeline is nearingthe all-time high of 5,883 projects and785,547 rooms, which was achieved in thesecond quarter of 2008.
In terms of projects currently underconstruction, there are 1,729 projectsencompassing 235,278 rooms. Thosenumbers have been growing for eightconsecutive quarters, according to thecompany’s analysts.
The new 121-room Homewood Suites inOrange was developed and owned byHartford Lodging Partners LLC and managedby SBM Hospitality, said Tom Falco, generalmanager of the new hotel. Hartford LodgingPartners also is behind one of the two newhotels that have been approved inWallingford off Interstate 91.
Falco said the companies are bullish on theNew Haven area’s ability to support new
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hotel properties. In addition to spendingbetween $25 million and $30 million to buythe land and build the hotel he is managing,the companies are negotiating to acquireanother property at the Marsh Hill Roadinterchange in order to build another hotel.
“That goes to show just how powerful thismarket is,” said Laura Hutcheon, director ofsales at the new Homewood Suites.
About 30 percent of Homewood Suites’business is expected to come fromextended-stay customers, which Falco said isdefined as customers staying longer thanseven days. So-called “transient” customersare those who stay fewer than seven days, hesaid.
For those worried the new hotels will fold ifanother recession were to hit, Kozlowski saidthat prospect is highly unlikely.
“The companies building these hotels havedone feasibility studies that take that intoaccount,” she said.
But as a local development professional, Ryantakes a different view.
“Do I think about that? Certainly,” he saidwhen asked about what another recession
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might do to newly developed hotels. “Ifyou’re a high-end hotel, you can alwayslower your prices to attract customers. But ifyou’re an economy hotel property and themarket softens, where do you go fromthere?”
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