Why Downtown Boise may be ripe for more hotels

A proposed convention space expansion would increase demand for beds, and not just Downtown.

sberg@idahostatesman.comFebruary 24, 2014 

Between 2007 and last fall, Pat Rice didn’t take a single call from anyone interested in a major Downtown Boise hotel project.

Over the past six months, however, the executive director of the Greater Boise Auditorium District has fielded seven or eight such calls. Rice said the people he hears from are just looking for basic information such as hotel occupancy rates and how much money customers are paying for rooms.

A decade after Boise’s last hotel-building spurt, even basic queries are exciting, Rice said. Looking into the future, he sees reasons to believe new hotels will pop up in Boise soon.

First, there’s the latest news in the district itself. Late last month, the district announced a partnership with the Gardner Co., the developer that built the Eighth & Main building — Idaho’s tallest — and bought U.S. Bank Plaza in Downtown Boise. Gardner plans to develop the plaza by putting two buildings that have retail, office, meeting and ballroom space south and west of the U.S. Bank tower.

The auditorium district plans to pay for the new development’s ballroom and meeting space. The district also would renovate Boise Centre, a convention center it owns at 9th and Front streets. Together, the projects would let the district handle events of up to 1,000 people, making Boise a candidate for 70 percent of the nation’s conventions, Rice said.

If the auditorium district builds the new space as planned, and if clients start booking more and larger conventions, all those people coming to Boise will need places to stay. Right now, Rice said, Downtown Boise doesn’t offer enough hotel space to support the extra convention business. He said there are about 1,000 hotel rooms within a mile of Boise Centre and just 500 between the three closest ones: The Grove Hotel, Hotel 43 and the Downtown Hampton Inn and Suites.

Another looming demand is the Simplot World Headquarters, under construction between 9th, 11th, Myrtle and Front streets. Once the agricultural giant’s headquarters are complete, Rice said, the number of people coming to Boise on business will increase. They, too, need beds.

The Simplot family is building Jack’s Urban Meeting Place on the same lot. It, too, will have event space that will bring visitors Downtown.

A few blocks to the north, at 12th and Main streets, the former Owyhee Plaza hotel is being remodeled into a condominium, office and retail complex named Owyhee Place. When it’s done, the building will have about 12,000 square feet of ballroom and other event space at 11th and Main streets.

A RISING TIDE?

David Johnson, who owns the Riverside Hotel in Garden City, said he checks Boise’s hotel occupancy rates and prices every day. He wouldn’t give details on his formula, but on both metrics, he said, Boise is approaching thresholds that warrant new hotel construction.

Johnson agreed with Rice that new convention space and Simplot’s headquarters will increase demand for hotel rooms, especially midweek, the peak time for business travel. Both developments would lure guests primarily to Downtown hotels, but Johnson said those hotels would fill up, pushing more guests into hotel rooms farther from the core.

“All businesses like that bring people in. It’s not just going to be one. It’s going to be an accumulation of many,” Johnson said.

Efforts to contact managers of the Grove Hotel and Hampton Inn and Suites in Downtown were unsuccessful.

WEEKDAY VS. WEEKEND

So far, the only tangible response to Boise’s expected demand for new hotels is Gardner’s own proposal to build a 150- to 160-room hotel on the corner of 9th and River streets. Gardner is one of six developers who submitted proposals to develop that lot, which Boise’s urban renewal agency owns. Other proposals offered housing concepts such as apartments, condominiums and student housing.

David Wali is in a unique position to judge Boise’s hotel demand, particularly Downtown. For years, Wali has been a driving force in Boise’s commercial real estate scene. He’s part owner of Hotel 43, a 112-room hotel just west of Boise Centre. He’s also Gardner’s executive vice president and a major force behind Gardner’s hotel proposal.

Like Rice and Johnson, Wali believes an expansion of Boise Centre would bring more people Downtown, but he sees a problem. If the expansion happens, he said, it will bring in the same kind of guest Boise already has: business travelers who show up between Mondays and Thursdays.

What Boise hotels really need, Wali said, is weekend business. Unlike Las Vegas, Boise doesn’t bring in droves of pleasure-seekers on weekends that supplement midweek demand from business travelers. Here, weekend demand is sporadic. Soccer tournaments, football camps, triathlons, bike races and other sports events are what sell hotels on Fridays and Saturdays.

To make that area of business more consistent, Wali suggests the auditorium district, after completing the Boise Centre expansion, focus its resources on things like a multisport stadium, improvements to Taco Bell Arena and cultural events, such as weekend theater performances.

HOW MANY BASKETS?

Sooner or later, Rice said, the auditorium needs a major hotel — think 350 to 400 rooms — within a block or two of Boise Centre.

“The Centre needs a big hotel if we’re really going to deliver on that expected economic impact that we want,” Rice said.

Johnson looks at the issue from a different perspective. He likes the idea of several smaller hotels that together add more rooms in Boise as demand ramps up. It’s harder to fill a big hotel, he said, especially one that depends on conventions as its main source of guests.

“As a hotelier, I would never count on one thing. You can’t do that. You’re going to be out of business,” Johnson said. “You’ve got to have a lot of different opportunities because not everybody is traveling every single week all year. It’s got to be a combination of leisure and group travel and business travel.”

Sven Berg: 377-6275

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