Strong economy said drive hotel projects in area

Posted: November 21, 2017 at 2:34 a.m.

A strong economy has sparked hotel construction in Northwest Arkansas.

“We have plenty of hotels in Northwest Arkansas. Now you’re seeing a few being built because the economy is so good,” said Tim Freeman, president of United Hotel Management. “We have decent occupancy, but it’s not just crazy knock-it-out-of-the-ballpark occupancy. It’s a healthy occupancy.”

Occupancy rates for Benton and Washington counties’ 7,971 rooms were at 67.5 percent for the first nine months of this year, which is a slight increase from 67 percent for the 7,901 rooms in the same period in 2016, according to the Smith Travel Accommodations Report. STR, a company that monitors and analyzes the hotel industry, publishes the report.

“You want to see around a 60 or 70 percent minimum,” Freeman said of a healthy occupancy rate. His company manages revenue for 12 hotels in Arkansas, two of which are in Rogers and one in Fayetteville.

The number of hotel rooms in Washington County has remained the same over the past few years at 3,482 while those in Benton County have increased by 171 since 2015 to 4,490, according to the report.

The construction and planned hotels are following the trend as two new hotels will be in Benton County and one in northern Washington County. Another is nearing completion in north Fayetteville.

Occupancy rates in Washington County are at 70.5 percent through September for this year while Benton County’s is 64.5 percent.

The four-story, 107-room Element by Westin is under construction at 3400 Medlin Lane in Bentonville and is expected to open this year, according to its website.

Rogers’ Planning Commission approved plans for a 78,100-square-foot Creekside Courtyard by Marriott at 4201 W. Green Acres Road in September.

KGH Hotels is building Home2 Suites at 1519 S. 48th St. in Springdale, according to Patsy Christie, director of planning and community development for the city.

Messages to KGH Hotels weren’t returned.

Construction on a Fairfield Inn and Suites is nearly completed at 755 Van Ashe Drive in Fayetteville, said Molly Rawn, executive director of Experience Fayetteville. The four-story building will have 94 rooms and 1,000-square-feet of meeting space. It’s slated to open early next year.

Freeman said there has been an increase in weekend travelers, especially in Benton County, since Crystal Bridges Museum of American Art opened in November 2011. Specific numbers on how many people come to town for business versus leisure are difficult to find, but a good measurement is to look at weekday versus weekend bookings, he said.

“It used to be just really dead on the weekends five years ago,” he said. “Now you have some pretty decent weekends up there.”

Northwest Arkansas’ hotel market continues to be dominated by the business traveler but the weekend visits are getting stronger, according to industry insiders.

Josh Morey, general manager of Four Points by Sheraton on Southeast Walton Boulevard, said the hotel’s busiest days are Monday through Wednesday. Four Points opened in April 2015 and used to be a Clarion Inn.

Events such as the Great American Conference softball tournament, special exhibits such as Chihuly at Crystal Bridges and smaller niche events such as car shows have caused a year-over-year increase in Friday and Saturday night stays, he said.

“It’s not going to sell out the market, but it definitely helps in occupancy,” Morey said.

Other amenities such as good restaurants and leisure activities are needed to keep groups and events coming back, which Bentonville has and is developing, he said.

“If the city presents itself well, then you get that repeat booking,” he said. “The city has done a good job of getting first-time events, but the rest of the community has done a good job of reselling that event.”

Kalene Griffith, Visit Bentonville president and CEO, said more events and cultural amenities have helped the occupancy rates in Bentonville more than double from 20 to 25 percent to 40 to 60 percent over the last decade.

Visit Bentonville was involved with 10 to 15 events when Griffith started with the organization 10 years ago. Now, they assist with bringing more than 50 sporting events, about 50 meeting groups and around half a dozen special events such as the Bentonville Film Festival and the Power of Music Festival, she said.

Fayetteville hotels have typically had more people on the weekends because of events at the University of Arkansas, including Razorback football games, Freeman said.

The team’s 4-7 record — 1-6 in the Southeastern Conference — this year is a contributor to the dip in occupancy rates in Fayetteville this fall, he said, adding when the Razorbacks win, hotels fill up.

More than 1 million spectators attended Razorback athletics in 2015, according to a report from the Center for Business and Economic Research at the university. Of those 440,377 came from outside Northwest Arkansas.

“The university is clearly our biggest driver,” Rawn said of Fayetteville hotel occupancy.