Business

How new hotels are changing Downtown Boise

This is a golden era for hotels in Downtown Boise.

Three new hotels have opened this year, the latest on Oct. 19. They have increased the number of Downtown hotel rooms by more than one-third.

When the Hilton Garden Inn opens at Front and 13th streets in 2018, the Downtown’s room supply will have climbed by 621 rooms, or 48 percent. That will top the 580 rooms needed to meet demand identified in a study two years ago.

All three new hotels report brisk sales. “Business is great,” said Lindsey McCalla, director of sales and marketing at the Hyatt Place Boise/Downtown.

The stepped-up flow of convention and other visitors is bringing new business to restaurants and $1 million in new room-tax revenue to Boise’s convention-center district.

The hotels supply rooms for visitors to the expanded Boise Centre, which can now host conventions with up to 1,600 people, compared with 600 previously. Boise Centre already has 50 conventions booked for next year, including eight that could not have been held before the expansion, spokeswoman Mary Michael Rogers said.

These changes mean Boiseans will encounter more conventioneers than ever walking Downtown streets, visiting local attractions and patronizing bars and restaurants, sometimes increasing wait times. The new hotels will also provide more options for businesses, residents, youth-sports groups and Boise State University to lodge visitors.

They’re also bringing jobs to Boise. The three hotels employ 155 people, from housekeepers to front desk clerks to sales professionals.

“We’ve really needed more hotels in this area, period,” said Amy Parrish, director of sales at Inn at 500 Capitol, a luxury hotel where a penthouse suite this Thursday night will set you back $745.

Downtown room and occupancy rates are rising.

Boise saw its occupancy rate fall from 70 percent in 2006 to 56 percent in 2008, the first full year of the Great Recession. Occupancy climbed back to 70 percent by 2012. For the year that ended in August 2017, it was 80.4 percent — a profitable level for most hotels.

In June 2014, the average cost of a hotel room Downtown was $82.15 per night. In 2017, the average cost of a Downtown hotel room has remained above $100 a night since March. In August, it reached a record $120.

The trend raises a question: Will even more hotels be built?

1. Inn at 500 Capitol

When it opened in February, the Inn at 500 Capitol was the first hotel to open Downtown since 2008. Hyatt Place Boise/Downtown followed in May. The Residence Inn Boise City Center opened last Thursday, Oct. 19, just across Myrtle Street from the Inn at 500 Capitol.

The Inn at 500 Capitol hired 65 workers, the most of the three.

The hotel has stayed busy. Parrish said she does not expect the opening of the Residence Inn to affect occupancy.

“We’ve been very well-received,” Parrish said. “We continue to get comments, especially from people who have never been to Boise, that they would not expect a hotel of this caliber to be in Boise.”

On Wednesday, you could book a room Thursday night, Oct. 26, for $225. For Friday, Nov. 24, Booking.com listed a room for $164.

2. Hyatt Place

Hyatt Place, at 1024 W. Bannock St., was booked solid the week it opened, bolstered by X Game Qualifier participants and other groups. Demand has remained high since, said McCalla, the sales director.

“We have exceeded our own expectations and our budget,” she said.

Hyatt Place had to train many of its 40 employees, who came without a lot of hotel experience but had “amazing” customer-service skills, McCalla said.

On Wednesday, Expedia.com offered a room on Thursday, Oct. 26, for $159. For Friday, Nov. 24, TripAdvisor.com had one for $129.

3. Residence Inn

On its opening night last week, the Residence Inn, 400 S. Capitol Blvd., was half-full, with full-price rooms going for $279. It filled up Friday and Saturday nights, with Boise State University hosting Parent and Family Weekend.

The combination of a busy Downtown and guests looking for a Marriott-branded hotel created instant interest, said Aimee Tylor, the general manager. “It’s kind of the perfect storm for a hotel in Boise,” she said.

Several were extended-stay guests who stay five nights or more. About 40 percent of Residence Inn’s guests fall into that camp, she said. With full kitchens, the hotel caters to out-of-town workers in town on a job.

The hotel is hiring 50 people. It still has some open positions.

On Wednesday, Expedia.com offered a room Thursday, Oct. 26, for $229. Travelocity offered a room on Friday, Nov. 24, for $125.

4. Hilton Garden Inn

A fourth new Boise hotel is under construction southeast of 13th and Front streets. The 175-room Hilton Garden Inn, developed by Gardner Co., will include a separate parking garage. The 644-space garage will include 250 spaces for public use.

The hotel is expected to open next May, said Angie Mago, director of sales and marketing for B&T Hospitality of Idaho Falls, which will manage it. She said the company is still evaluating what it will charge for rooms.

What other hoteliers say

The 39-room Modern Hotel, 1314 W. Grove St., where rooms start at about $142, hasn’t seen any impact from the new hotels.

“The only thing it’s given me is new choices to send other people,” said Polly Evett, the hotel’s front desk manager. “Our occupancy has still been very strong.”

Likewise, the Budget Inn at 2600 W. Fairview Ave., has not been affected. The motel has 44 rooms that cost about $52 a night.

“This is a budget property, so there is no effect on us,” front desk clerk Kanti Patel said.

But the 300-room Riverside Hotel, at 2900 Chinden Blvd., has noticed the difference.

“Anytime you get that much new supply into a smaller market like ours, everyone is going to feel the impact,” said Kathy Pidgeon, the general manager. “We saw it coming and it’s no big surprise. We’re ready for a little bit of a drop, but we hope it isn’t too drastic.”

Pidgeon, who has worked at the hotel for 30 years, said the Riverside, where rooms cost about $116 a night, has enjoyed several good years. During that time, both the occupancy rate and room rates have risen steadily.

The Riverside recently upgraded its entrance, adding a granite walk that features 88 piano keys, fountains and a new covered entrance. Guest rooms are currently undergoing upgrades that are expected to be finished by June 2018.

And what about the Grove Hotel, the 234-room, 20-year-old luxury hotel at Front Street and Capitol Boulevard? Repeated Statesman requests for comment from the Grove were unsuccessful.

Little impact on parking

The added hotel rooms do not appear to have hurt Downtown parking, said John Brunnelle, executive director of the Capital City Development Corp.

CCDC, Boise’s urban renewal agency, owns six parking garages with space for 2,567 cars.

“Hotels have a great compatibility with our public parking,” Brunelle said. “Our peak use is weekday daytime, and hotel need is usually evening and weekend. So those things marry out nicely.”

Hyatt Place, Inn at 500 and Residence Inn all provide on-site parking for a fee.

Still more conventioneers

Convention revenue has risen over the past few years and is expected to climb even more with this year’s completion of the three-year, $47.5 million expansion of the Boise Centre. The expansion increased floor space more than 80 percent.

In 2016, convention revenue totaled $4.7 million, up $300,000 from the year before. The district’s 5 percent room tax brought in $6.3 million in 2016, up from $5.6 million in 2015.

Last year, 144,000 people attended 270 conventions and events, an increase of 5 percent over the year before. Fifty-one more events were held last year than the year before.

The number of multiday conventions increased from 47 last year to 55 this year, Rice said. The goal for 2018 is 60.

The convention center is now big enough to accommodate three-fourths of the conventions held in the country, Rice said. Previously, it could compete for about 20 percent.

The convention center also expects to pick up more business from smaller gatherings.

“Going from 18 meeting rooms to 31 has provided the extra room for us to be able to accommodate multiple events at the same time,” Rogers said.

Are more hotels coming?

Though the 2015 hotel-room study suggests the four hotels will meet the need estimated then, the study also found that Downtown Boise has far fewer hotel rooms than downtowns in similarly sized cities.

The study said downtown Spokane had 2,745 rooms; Little Rock, Arkansas, had 2,314; Greenville, South Carolina, had 3,023; and Madison, Wisconsin, had 2,547.

Jeff Lowe, an assistant planner in Boise’s Planning and Development Services Department, said there has been talk of another Downtown hotel, but he has seen no applications.

Pidgeon, of the Riverside, said there are more than enough rooms for now.

“I think some was needed, but, of course, in my opinion, since I run a hotel, we probably got too much,” she said.

Pidgeon said supply and demand will even out eventually in Boise’s strong economy.

“There is nothing we can do with what other people build. I wish them well,” she said. “The best thing we can do here is just make sure our guests feel welcome and give them great service.”

The original version of this story misstated the title of Kanti Patel, front desk clerk at the Budget Inn.

John Sowell: 208-377-6423, @JohnWSowell

Get a room

Hotel rooms added Downtown since Jan. 1:

Inn at 500 Capitol: 111

Hyatt Place: 150

Residence Inn: 185

Total: 446

Downtown’s grand total: 1,735 rooms in 13 hotels

Future total: 1,910, when Hilton Garden opens

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