Hotel Business Picking Up

Droves of Hog fans heading to the first home football game filled area hotels this weekend, but increased tourist attractions and youth sporting events are pulling more visitors to the area year-round.

Hotel revenue has jumped 14 percent so far this year over last year. A pair of hotels set to open in the next 12 months hope to push revenue even higher.

Kathy Deck, director of the Center for Business and Economic Research at the University of Arkansas, said increased hotel revenue indicates more tourism that’s vital to city coffers.

“When you look at hotel collections, most of the time that is outside money coming in to us,” she said. “When you think about ways a region can expand economically, tourism is one of the easiest ways.”

Each of the area’s four largest cities collects a 2 percent tax on lodging, and all the cities report collection is more than last year.

Hotels in Benton and Washington counties pulled in $73.64 million through the end of July compared to $64.65 million during the same seven months last year, according to STR Report published by Smith Travel Research. The company tracks supply and demand data for the hotel industry.

“People and businesses are spending more and have a lot more confidence in the economy,” said Roger Davis, general manager of the Springdale Holiday Inn. He also is chairman of the Springdale Advertising & Promotion Commission.

The job and real estate markets are two signs the economy is strengthening. The local unemployment rate fell to 5.9 percent in July, down from 6.2 percent in July 2012, according to the U.S. Bureau of Labor Statistics. Area home sales through July hit 695 compared to 598 in the same time last year, according to MountData, a real estate marketing firm.

Allyson Twiggs Dyer, director of the Rogers Convention and Visitors Bureau, said the travel economy is back to pre-recession levels. The recession officially ran from December 2007 to June 2009.

“The corporate business is back to a three- and four-night stay,” she said.

The occupancy rate for hotels so far this year is 53.5 percent across both counties and varies from a high of 60.7 percent in Rogers to a low of 47.3 percent in Fayetteville.

Davis said Washington County’s 51 percent occupancy rate shows room for improvement.

“It’s telling us the demand still hasn’t caught up with the oversupply that happened between 2007 and 2009,” he said.

Developers added almost 2,000 rooms during that two-year time span. The hotel industry constantly changed between January 2007 and May 2009 when the area went from 82 hotels with 6,397 rooms to 101 hotels with 8,266 rooms. Today there are 8,299 rooms in 99 hotels in the two-county area.

Kalene Griffith, president and chief executive officer of the Bentonville Convention and Visitors Bureau, said new attractions such as Crystal Bridges Museum of American Art and new events, including new sporting events, are filling rooms.

“We went from 10 bus tours to more than 300, and the numbers are increasing,” she said. “That is just a massive number of people. They may not all be staying over, but they are all spending money.”

An Athletics Economic Impact report released by the university in October showed visitors to home baseball, basketball and football games in the 2011-12 academic year generated $29.6 million in revenue. The report showed hotel occupancy rates were 5.4 percent higher and hotel tax collection in Northwest Arkansas is typically 14.6 percent higher in the fall than the rest of the year.

The games resulted in renting 35,805 hotel room nights and purchasing more than 1 million meals in Northwest Arkansas, according to the UA report.

“Collections are up, but you always would like to have them up higher,” said Marilyn Heifner, executive director of the Fayetteville Advertising and Promotion Commission.

Fayetteville’s motel tax collection lags behind Rogers and Bentonville. Heifner said events in Fayetteville including Razorback games and Bikes, Blues & BBQ benefit the whole area, and she would like to see the cities to the north create events that send people south.

Fayetteville

When the Hilton Garden Inn Conference Center opens next year it will add 115 rooms and suites and 8,500-square-feet of meeting space to the Fayetteville hotel mix. The hotel is a project of Krushiker Hospitality Group, a hotel management company based in Fayetteville. It will sit adjacent to two other Krushiker Hospitality hotels: Homewood Suites by Hilton and the Holiday Inn Express.

Narry Krushiker, owner and operator, moved to Northwest Arkansas in the 1980s and said the university and home offices of major companies, including Walmart and Tyson, make it a good place to own hotels.

He said the hotel will add more than 300 jobs during the construction phase and 35 to 50 permanent positions once it opens.

“The location of the three hotels together will provide enough rooms for a large convention and give people a choice,” he said.

The Hilton Garden Inn will be a full-service hotel with a full-service restaurant and bar.

“We got the Convention and Visitors Bureau involved, and they talked about the need for meeting space,” Krushiker said. “The project evolved over several years.”

Heifner said the additional meeting space will allow her to recruit larger groups to Fayetteville.

The University of Arkansas also is exploring the idea of building a second hotel on campus. The hotel would help house people at conferences on campus.

David Davies, UA Student Affairs Division’s vice provost for finance and administration, said they are looking for a private partner developer to come in and finance, build and run the hotel and share some of the revenue with the university. University leaders selected two companies that have until Oct. 15 to submit proposals.

“The university was clear in its requests that it did not plan to provide any financing,” he said. “We don’t know what they are going to do.”

The proposed site for the 125- to 150-bed hotel is near the Walton College of Business and is tentatively called the Executive Education Hotel and Conference Center.

The university already has the Inn at Carnall Hall on campus, which opened its 50 rooms in September 2003.

Business has been good at The Chancellor as the downtown hotel approaches its one-year anniversary under new ownership, said Jay Johnson, general manager. Rooms were gutted and updated in the hotel that started as a Hilton in 1981, became a Radisson in 2001 and the Cosmopolitan in 2006.

Bentonville

Four Points by Sheraton at 211 S.W. Walton Blvd. will be open by the end of the year, said Kunal Mody, president and chief executive officer of hotel owner Sree Akshar. Little Rock-based Sree Akshar purchased the Clarion and Motel 6 next door in March for $3.3 million.

Mody said the property is undergoing a complete renovation. The building was painted and the rooms are being gutted.

It will have 105 rooms, Joe’s Italian Restaurant and a bar. It also will have 24,000 square feet of convention space.

The Motel 6 is open, and Mody said the company is exploring other opportunities for the building.

Griffith said the extra convention space is a positive for the town.

“We can recruit some bigger meetings, and we won’t compete with other convention spaces but be an additional option,” she said. “The goal is to keep the business in Northwest Arkansas. We are all going to benefit when people come to the area.”

The 21c Museum Hotel opened Feb. 11. Griffith said the 21c’s art collection changes about every six months, making it like a new place over and over.

“It is a unique experience. It’s really a museum first and then gives a hotel, bar and restaurant option,” she said. “Even though they don’t have a new building going up, they give a new experience with the new art.”

The 104-room, four-story hotel is just north of the Bentonville square on the corner of Northeast A Street and Northeast Blake Street and has 12,000 square feet of art exhibition and event space.

Rogers, Springdale

Business travel accounts for much of the hotel business in Rogers, Dyer said. Hotels fill up Monday through Thursday.

“We have done a ton of marketing telling the story of Rogers being a great place for a weekend getaway, and it’s taking hold,” she said.

She said the opening of Rogers Regional Sports Park earlier this year has helped draw more tournaments to the area and more people to hotels. The $6.7 million complex has four softball/baseball fields and tournaments are usually held on weekends, drawing families to the area.

“When we add more soccer fields we will grow even more,” she said.

Davis said additional sporting events coming to the area helped the Holiday Inn have record-breaking first and second quarters this year. He said the hotel is on track to have a strong second half of the year.

“(Business) has improved drastically over the past six months. People are feeling more confident and spending more money,” he said.

Davis said the area still loses business because it needs more recreation fields.

“We would really like even more new parks to be built, and I understand that is on the drawing board” for several cities in the area, he said.

Springdale passed a bond program that is adding parks. City officials recently bought property for parks at the southeast corner of Don Tyson Parkway and Hylton Road and the corner of West Downum and Ball roads. The city also plans on renovating parks.

The park plan is the early stages, and city officials expect to have the Hylton Road park and renovations complete in three years.