Hotel building binge in Waco continues

Hotel building binge in Waco continues

By MIKE COPELAND mcopeland@wacotrib.com

Waco Tribune-Herald

December 24, 2018

The number 1,268 keeps rolling around in the mind of Carla Pendergraft, director of marketing for the Waco Convention Center.

It reflects rooms that could become available the next three years if hotels planned, permitted or under construction come to pass.

To Pendergraft, it also represents more visits to the Cameron Park Zoo, the Dr Pepper Museum or Magnolia Market, packed sporting events, brimming restaurants and weekend getaways for travelers sampling what Greater Waco has to offer.

Last week, developers announced plans for a full-service Embassy Suites on South Second Street, behind the RiverSquare collection of shops and restaurants and two blocks from the Waco Convention Center.

Pendergraft has added the $35 million, 168-room project to her list. It would have structured parking, 15,000 square feet of meeting space, ballroom space, a full restaurant and a full bar, according to the developers, Waco natives Birju and Harsh Patel, with BH Hospitality Management LLC.

The Downtown 301 Event Center will be torn down to accommodate the Embassy Suites, and construction is set to start next year.

“That was an exciting announcement,” Pendergraft said. “With Embassy Suites, the Hilton, the Courtyard by Marriott and the three hotels planned across the river, we are in an excellent position to move to that next level of convention and meeting business. I am confident we will attract larger clients, and convention planners love to have everything in one hotel.

“Now, we have two hotels near the center. Soon we will have six total, and we should keep this place more heavily booked.”

She has grown weary of losing hotel stays to Temple and Hillsboro when special events tax local hospitality resources beyond their capacity. Hotel stays typically produce dining, entertainment and shopping activities, she said.

Developer Kenny Bhakta, who owns Hotel Indigo downtown, has announced plans to place three four-story hotels on land roughly bounded by Martin Luther King Jr. Boulevard, Bridge Street and Taylor Street in East Waco, all within walking distance of the Waco Convention Center complex.

Construction on the $21.7 million project is scheduled to start early next year and conclude in 2022. Plans call for 361 rooms spread over three brands: Cambria Suites, Even Hotel and Holiday Inn Express.

Bhakta also will place a 105-room extended-stay Element Hotel by Marriott on LaSalle Avenue, near Waco’s traffic circle, said Jacquelyn Baumann, director of sales for Hotel Indigo and a spokesperson for Bhakta’s KB Hotels LLC.

The Element property does not appear in Pendergraft’s calculations.

“We will go forward with our four hotels, won’t alter our plans, but Waco is becoming a very competitive market, especially considering all the hotels projected. It would not surprise me if other hotel developers, those not as far along as we are, will reconsider where they stand,” Baumann said. “There definitely is going to be a shift in the market, and some hoteliers may take a second look at the feasibility of placing another property here.”

Still, Waco has much to recommend it to lodging planners.

Waco’s overall occupancy rate was listed as tops in the state during the second quarter this year, at 82.7 percent, according to Pendergraft.

It has consistently placed in the top five the past two years, running neck-and-neck with oil-booming Midland, the dynamic Austin-Round Rock area and coastal cities whose residents sought refuge after Hurricane Harvey, said Kris Collins, senior vice president for economic development at the Greater Waco Chamber of Commerce, who tracks lodging trends.

Raju Patel, who opened a new 118-room La Quinta Del Sol near South 11th Street and Interstate 35 in mid-October, said the proliferation of new lodging establishments concerns him. He also operates a La Quinta on Woodway Drive, a Best Western in Bellmead and Candlewood Suites on New Road.

“My occupancy rate is less than 20 percent at my new property,” he said. “Things have been pretty slow.”

Asked if Greater Waco is becoming overbuilt, he replied, “I think so.”

He said in his opinion, adding more than two new properties per year is flirting with saturation and reduced occupancy rates.

He said he wonders how long Magnolia Market at the Silos will remain a tourist draw now that Chip and Joanna Gaineses’ hit HGTV show “Fixer Upper” has left the airwaves, except in re-runs, and he would like to see efforts to schedule more events in December and January when lodging activity wanes.

The Gaineses’ announcement last month that they are negotiating with Discovery Inc., the parent company of HGTV, to create their own TV network could offset one of those concerns.

A Springhill Suites is under construction near Second Street and Interstate 35, an Aloft Hotel is going up at 900 S. 11th St., next to Patel’s new La Quinta, and a Hyatt Place is under construction near the Bagby Avenue entrance to Central Texas Marketplace, with an opening planned next year.

And Mississippi-based Heritage Hospitality Group has secured permits to build a Residence Inn and a Tru by Hilton in the 2400 block of Marketplace Drive, near the Hyatt Place, a new retail strip and a Baylor Scott & White Health clinic.

Also, a 111-room Hilton Garden Inn opened in September in Legends Crossing, and an 85-unit TownePlace Suites is going up in Lacy Lakeview.

A 32-room hotel, meanwhile, is part of a Czech-inspired mixed-use development announced last week that will include a brewery, restaurant and bakery on South Eighth Street in Waco’s inner city.

Bland Cromwell, a commercial marketing specialist with Coldwell Banker Jim Stewart Realtors, said he believes there is demand for more.

He said he continues to work for clients who believe Waco could accommodate another high-end full-service property. He represents Clifton and Gordon Robinson, who own the Olmsted-Kirk Paper Co. building in the 300 block of South Sixth Street and have cleared a sizable tract adjacent to it. He said he could not discuss details of what might land there, but he acknowledged the Robinsons would be receptive to overtures from a hotel developer.

The site is just beyond the back fence of Magnolia Market at the Silos, near where several food trucks and trailers do business.

He said a lodging establishment with a twist, a property offering a unique service, would find itself right at home in the burgeoning Waco market.

Reinforcements have also arrived in the push to promote Waco’s convention and tourist traffic, with the introduction last week of Todd Bertka, an industry veteran and transplant from Virginia hired as director of the Waco Convention Center and Waco Convention and Visitors Bureau.

He said the facilities to meet the needs of “the meeting business” are critical to Waco being a year-round destination.

By |2018-12-24T23:16:27+00:00December 24th, 2018|City News|0 Comments

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