California Hotel Development Heating Up

As seen on Atlas Hospitality Group
By Alan X. Reay, President:

Hotel developers and their lenders have come charging back, a strong sign that the California hotel market has truly rebounded from the deep recession.

Within the last 45 days, no fewer than 21 new hotel projects were announced. Some examples include:

  • San Diego: There are plans for 650 rooms in three properties at Liberty Station, a 252-room all-suite hotel, a 215-room residence-style hotel and a 183-room hotel with a mix of suites and standard rooms.
  • Berkeley: A planned 16-story mixed-used downtown will include a 290-room hotel; three floors of office space and 180,000 square feet of ground-floor retail.
  • Arcadia: Two Marriott hotels are planned near the Santa Anita Park race track, a Residence Inn and a Fairfield Inn & Suites.
  • Santa Barbara: Fespar Enterprises, owner of the Fess Parker DoubleTree Resort, plans to build a 50-65 room hotel with 160 parking spaces.
  • Palm Desert: The city council voted 4-1 to approve $1.8 million in tax sharing with the developer of a 154-room boutique hotel with a restaurant and spa. The estimated cost of the project is almost $34 million.
  • Healdsburg: A 39-room hotel is planned for downtown that will be a sister property to the nearby h2hotel and Hotel Healdsburg.
  • Santa Monica: There are plans for a $300 million mixed-use project that includes a 225-room hotel, a block from the Third Street Promenade.
  • Irvine: A former office building was demolished to make room for a 156-room Hilton Garden Inn.
  • Petaluma: There are plans for a 54-room luxury boutique downtown.
  • Fountain Valley: Ayres Hotels just opened a 127-room full-service hotel, minutes from Huntington Beach.

It was difficult to imagine that hotel development would come back so strong, just three short years after one of the worst recessions ever experienced by the industry.

If we needed any more convincing that the market is back, developers are once again announcing plans for “condo-hotels” in markets such as New York, Miami and Waikiki.

For those who were convinced that we would never see another condo-hotel, the market continues to surprise.

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