Kimpton Tryon Park GM on what to expect when uptown hotel opens in October

Robert Hannigan has worked with San Francisco-based Kimpton Hotels & Restaurants for a decade, leading operations for hotels in Washington, D.C.; San Diego; Los Angeles; and Portland, Ore.

He's now come to the Queen City as the general manager for Kimpton Tryon Park Hotel, the 217-room hotel at Third and Church streets that's on track for a late-October opening. Among other duties, Hannigan is tasked with filling about 200 hotel and food and beverage positions, ranging from managerial roles, sous chefs, bartenders, room attendants and banquet chefs.

Hannigan is hoping Kimpton's accolades-earning employee culture and benefits will help draw in the best talent for those positions, though he acknowledges that the competition for labor is fierce, especially with the significant supply of hotel rooms coming online in the next several quarters.

"There’s always a concern about finding not only the right number of people, but the right people themselves," he said. "But we're going to keep looking."

Finishing work is underway at Kimpton Tryon Park, with furniture being loaded in and rooms on floors four to 10 at a significant completion point. Construction remains underway for the hotel's ground-floor Italian restaurant, Angeline's, and a rooftop bar called Merchant & Trade.

Hannigan recently spoke to the Charlotte Business Journal about the upcoming hotel, what the Kimpton brand is about and his take on the local hotel market. Excerpts have been edited for brevity and clarity.

What would you say are some of the key characteristics of a Kimpton hotel?

It’s very entrepreneurial. In a lot of other working environments in the hospitality industry, I was handed a set of rules — "Do this, say that" — and that's good. It taught me consistency and a good foundation for the operational environment. With Kimpton, we have the same benchmarks we have to hit: we have to have happy employees; we have to have a profitable business; we have to have a highly regarded hotel within our community; obviously, we have to have happy guests. But how someone gets there is left up to the individual property within that market.

We say, "OK, how do we make this brand and this hotel successful in Charlotte?" I think the amount of leeway I get to getting us there is very refreshing. That philosophy will trickle down to the employee level. We are not rigid in terms of operating structure. There’s going to be a lot of consistency in important areas — food service, check-in processes, handling guests’ information. There’s going to be a lot of standardization there to make sure that we’re operating in a responsible manner but how we take to the field for service recovery ... we want them to approach it with a lot of heart and a lot of compassion, as opposed to overstructuring the environment.

So what's specific to the Charlotte market in the upcoming Kimpton Tryon Park Hotel?

We have a social hour that’s daily from 5 to 6 p.m. We typically offer poured wines by the glass, we’ll have craft beers, we might have a fun cocktail. We will not say, "You must pour this Californian wine or this beer because it’s the least expensive." We’ll say, "OK, let’s invite Sugar Creek Brewing or Olde Mecklenburg in to collaborate with us with tastings and flights," or "Let’s find a great regional wine partner" — or, in the absence of that, let’s find a business that is female-owned, minority-owned or someone with a really compelling story.

Rather than, "Let’s do a steakhouse because it has X% of profitability," what does Charlotte want? We have found that there is opportunity for a great Italian-inspired restaurant, Angeline's, and Merchant & Trade is going to have a great, fun food menu and cocktails. We’ll look at the market and go, "What do we suspect Charlotte needs? Let’s do some research, let’s get out and talk to the community, let’s go see what’s missing."

In uptown Charlotte, there is a significant number of hotels in different stages of development. What does Kimpton have to offer that is either not here or perhaps is perceived to be lacking?

I think a top-flight culinary and cocktail program is something that the community is very excited about, and a very individualized spirit of service, where our staff is approaching you, wanting to help you on a personal level, as opposed to "This is my role; I’m going to take it so far and hand it off to the next person."

What are your key thoughts or takeaways looking at the hotel market here?

I am very excited about it. I know there are other hotels coming online. I think having a good, broad-based portfolio is important. You can’t have a "one and done" environment. Two or three large hotels is not going to drive additional jobs or help us with city-wide conventions. We actually need a good, healthy inventory of hotels here in the city.

Do you see any potential concerns in the market?

No, not yet. What’s coming online now are smaller key counts. What I’m seeing is 150-key hotels, 250-key hotels ... I believe there is the bandwidth for a convention hotel, something north of 1,000 rooms, but what’s coming to the market now, I think the city is going to be able to absorb without too much trouble.

Would you say we’re behind in supply right now?

It seems to be. That’s the feedback I’ve gotten — whether that was the Great Recession or deals penciling out in due course. These hotels coming online right now seem to be pretty highly anticipated. I think the community is very excited about it — I know we are. It’s going to be great to be part of a new crop of hospitality in the community.

Ashley Fahey
Charlotte Business Journal

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Campaign begins for convention hotel in Charlotte

A new convention center hotel with 800 to 1,000 roomsand paid for at least in part with taxpayer money looks more and more like an inevitability in uptown Charlotte.

Informal discussions among political, tourism and business executives have taken on greater urgency of late. Next week, City Council is expected to approve funding for final design and preparations that would set the table for a $110 million makeover of the Charlotte Convention Center— a project due to be finished in 2021 and one expected to increase the need for a second major hotel uptown.

Charlotte’s largest hotel is the 700-room Westin. It opened in 2003 near the convention center, built for $143 million, including $16 million in local government funding. Industry executives told CBJ that public money typically accounts for 30% or more of construction costs for convention hotels.

Assuming a price in the range of $350 million for a 1,000-room property — in line with current industry trends — taxpayers would be faced with a likely investment of $100 million or more.

The argument for subsidies goes like this: Hotels with anywhere from 600 to 1,000 rooms sacrifice some profitability as convention hubs because those properties guarantee blocks of rooms, often at lower rates, to help lure conferences, meetings and trade shows. Meeting planners want the convenience of being able to put attendees in one or two hotels, reducing possible logistical snags. And tourism executives in Charlotte and other cities crave the certainty of knowing they have enough rooms to pursue large-scale meetings and events without having to scramble to find hotel rooms.

Tom Murray, CEO at the Charlotte Regional Visitors Authority, told me Wednesday during an interview in his convention center office that a large-scale hotel like the one being discussed is unlikely to open for four or five years. But, he said, now is the time to start analyzing how a public-private partnership might be configured. Hotels and developers have expressed curiosity and interest in building a large-scale property here, but no one has made serious overtures to date, Murray told me.

Ambitious expansion and upgrades in peer cities, including Austin, Texas; Louisville, Ky.; and Indianapolis, have gotten the attention of Charlotte’s tourism sector.

“We see they’re winning this race a little bit,” Murray said.

Adding smaller hotels gives business and leisure travelers more options, but tends to shift bookings from one place to another around town rather than create additional demand, Murray and others in the industry told me. In that sense, the 500 rooms added uptown this year among the Embassy Suites, SpringHill Suites and other new properties, will not make much difference when it comes to conventions and conferences.

And, according to STR statistics, the number of sellout nights is rising across uptown hotels. That, in turn, industry executives said, limits the sales potential for the city. In 2014, there were 34 nights when uptown occupancy reached 95% or above. After dipping to 15 nights the following year, it reached 54 nights at 95% occupancy or greater in 2016. Through July of this year, there were 37 nights when 95% or more of the uptown hotel rooms were filled.

There are 5,000 hotel rooms in uptown, including the 500 opened so far this year. By early 2018, another 500 will be added, including the 216-room boutique Kimpton in Third Ward.

Though occupancy rates have dipped slightly with the additional hotels opened in recent months, tourism executives said the market remains healthy. And they pointed to consistent growth in the number of uptown residents and office buildings and tenants as factors that will sustain those increases. About 70% of hotel rooms citywide are filled, on average, a pace that remains well above occupancy that hovered in the low- to mid-60s for much of the 2000s.

Last month, at a trade group meeting, Murray looked on as Heath Dillard, the visitor authority’s director of business insights, made a presentation to local hotel executives outlining why a convention hotel is needed. The underlying message: Even if industry tax money paid by those same hotels winds up being used to help pay for a competitor to add as many as 1,000 rooms in uptown, it would be worthy because of the new events and business that would come with a new convention hotel.

Dillard’s presentation, using industry data from STR, pointed to market-wide gains in Austin, Nashville, Tenn., and Baltimore as examples. In those cases, to varying degrees, long-term trends showed gains for hotels across the board in room occupancy and an industry measure calculating revenue from each available room.

A portion of existing tourism tax money, special tax districts and other funding options are likely to be considered.

James Mitchell, a Democrat who leads the council’s economic development committee, told me Wednesday he is optimistic the city will find a way to attract and fund a new convention hotel.

“I look forward to that discussion,” he said. “We have to look at how Charlotte can remain competitive.”

Jeff Appelbaum, a Cleveland lawyer, has worked with local governments across the country on convention hotels, including a 600-room, $275 million Hilton in downtown Cleveland paid for and owned by county taxpayers. Appelbaum told me there are a number of ways to finance mega-hotels, but noted that attracting one without some form of public subsidy is exceedingly difficult.

Both of Charlotte’s mayoral candidates — Republican Kenny Smith and Democrat Vi Lyles — told CBJ on Wednesday that the upcoming investment in renovations at the convention center will create additional need for another major hotel. They both offered support, with caveats due to the lack of detail about a prospective negotiation between the city, the visitors authority and private developers.

“The question is, how do we pay for it?” Smith said. “It is hard to speculate on a deal that I’m not looking at. And then, if we put public dollars into a new hotel, how do existing hoteliers feel about helping their competition? I don’t see that going over.”

Vince Chelena, executive director of the Charlotte Area Hotel Association, the group that heard the visitors authority’s pitch, couldn’t be reached for immediate comment Wednesday. Earlier this summer, he told CBJthat a large block of rooms like those guaranteed by a convention hotel would be a draw, helping increase the overall amount of hotel business.

Others in tourism and hospitality said the industry would support a convention hotel, but only if it does more than just add room inventory.

Mohammad Jenatian, who runs the Greater Charlotte Hospitality & Tourism Alliance, said a convention hotel paid for in part by using industry tax money works only if it is large-scale enough to add meeting and conference space, too.

Lyles said she generally favors investments in tourism projects. “Anything that brings more bread and butter to our convention center, we ought to participate,” she said. “That kind of an investment makes a real difference. And it’s something we can measure.”

Similar arguments have been made in a number of other cities, where subsidies have partially or entirely helped land convention hotels. Discussions and negotiations for similar projects are underway in Broward County, Fla., Des Moines and Kansas City, among others.

Austin opened a 1,000-room JW Marriott in 2015 and, later this year, another 1,000-room property, the 37-story, $370 million Fairmont Austin, will follow. The Fairmont illustrates what Jenatian, the Charlotte trade group leader, has in mind: it will include 112,000 square feet of meeting space.

A CBRE study of Charlotte’s response to the opening of the Westin found that, despite the hotel’s 700 rooms increasing uptown inventory by 21%, occupancy kept growing in center city hotels until the recession arrived in 2008.

Nashville, like Austin, poses bigger and constant threats to Charlotte in competition for conventions, trade shows and other major events. In 2013, a new $623 million convention center opened in Nashville. Known as the Music City Center, it covers 2.1 million square feet, nearly four times the size of the 550,000-square-foot Charlotte Convention Center. According to The Tennessean, the new convention center failed to reach initial projections, raising questions about the public investment.

For rival cities in the Southeast, including Charlotte, the rise of Nashville has made it harder to recruit events, a circumstance exacerbated by the opening of a $270 million, 800-room Omni convention hotel in October 2013. Close to half the cost, $128 million, will be borne by taxpayers.

Louisville, another comparable city to Charlotte, is also upping its convention game with a two-year, $200 million overhaul of the city-owned convention center.

Erik Spanberg
Charlotte Business Journal

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A look inside the dual-branded hotel now open in SouthPark

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The dual-branded Hilton Garden Inn and Homewood Suites opened on Wednesday near SouthPark mall on Sharon Road.

Click through the accompanying photo gallery for a virtual tour of the property.

The project includes 270 rooms total, with 160 rooms in the Hilton Garden Inn and 110 rooms in the Homewood Suites.

A variety of communal areas throughout the dual-branded hotel provide space ideal for both business and leisure travelers. The hotels have two separate lobbies and dining areas, a 24-hour fitness center, an outdoor heated pool and 2,500 square feet of flexible meeting space.

The Homewood Suites has studio and one-bedroom accommodations complete with full-kitchen and living areas for extended stay travelers.

As of Monday morning, websites for the properties showed single-night room rentals priced in the neighborhood of $250 and up.

Melissa Kay
Charlotte Business Journal

View photos here

New hotel is open near a busy SouthPark intersection

There’s a new hotel open in SouthPark, on Sharon Road just south of Fairview Road: A dual-branded Hilton Garden Inn/Homewood Suites by Hilton.

Totaling 270 rooms split between the two brands, the new hotel expands the inventory of rooms in an area that’s growing rapidly denser. It also includes 2,500 square feet of flexible meeting space. The hotel is owned and managed by Chartwell Hospitality LLC.

“Whether visiting for business or leisure, our dual-brand property provides diverse accommodations for visitors with varying needs, and our convenient location and value-added amenities deliver 

savings and quality that today’s guests demand,” said John Bensing, general manager of the dual-branded property, in a statement.

Dual-branded hotels, with two separate hotels in one property, have become more popular in recent years. They allow hotel operators to appeal to more guests on the same site with different offerings, such as suites and smaller rooms, while sharing some amenities, overhead and behind-the-scenes facilities. For example, a combined AC Hotel and Residence Inn by Marriott are under construction in one tower atop the EpiCentre uptown.

In SouthPark, the hotels will have separate lobbies and dining areas, and a shared pool and 24-hour gym.

Ely Portillo
Charlotte Observer

Construction underway on first hotel at Stonewall Station

The first of two hotels planned for an uptown mixed-use development site began construction this week.

On Sept. 5, Whiting-Turner Contracting Co. broke ground on a Home2 Suites by Hilton at the corner of Stonewall and Caldwell streets within Crescent Communities' Stonewall Station project. The 181-room hotel is being developed by Doradus Partners — formerly Yedla Management Co. — out of Huntsville, Ala.

The 10-story hotel will include a meeting room on the top floor, a lobby on the second floor, fitness center, gathering space and an outdoor pool deck, according to Richard DeMarco, chief development officer at Doradus Partners. The flag — the first one of its kind in uptown — is an all-suite, extended-stay brand by Hilton.

In addition to the hotel, current plans call for about 13,500 square feet of ground-floor retail, DeMarco said. An agreement is in place to sell back the retail portion to an entity arranged by the master developer of the site "upon substantial completion of that portion of the building," DeMarco said. The Home2 Suites has an expected construction timeline of 18 months.

The second hotel site, which is immediately south of the Home2 Suites, was recently sold to an affiliate of Georgia-based Mayfair Street Partners. In a joint venture with Sefira Capital, MSP will develop a 181-room Even Hotel. That hotel, which is being built with modular construction, is expected to open in the first half of 2019.

A good chunk of development is nearing completion at Crescent Stonewall Station. Charlotte-based Crescent Communities is building 459 upscale apartments and 64,000 square feet of retail, the majority of which will be leased by Whole Foods Market.

Whiting-Turner is the general contractor on the Home2 Suites. The RBA Group is the project engineer and architect.

Kurt Schoenhoff at Selwyn Property Group represented Doradus Partners and Crescent Communities in the Home2 Suites transaction as well as MSP and Crescent in the second hotel deal that closed last week.

View the full article here

 

Another new uptown hotel is opening in February, featuring a rooftop bar and restaurant

The new, dual-branded hotel under construction atop the EpiCentre plans to open in Feb. 2018, the project’s developers said Wednesday.

The AC Hotel and Residence Inn, both in the 22-story tower, will total 300 rooms. The new hotel will also include a rooftop bar, retail space that’s available for lease, a “super suite” to rent and meeting space.

The hotel is the latest to plan an opening in Charlotte, adding to the city’s rapidly growing inventory of uptown hotel rooms. Next to Romare Bearden Park, the Kimpton is opening a 217-room hotel this fall. Already this year, an Embassy Suites, Springhill Suites and boutique hotel named Ivey’s have opened uptown, adding about 500 rooms to the market.

The rooftop bar will be independently run and open to the public. Hotel developer McKibbon Hospitality is partnering with Asheville chef Peter Pollay on the project. He owns the Posana restaurant, a farm-to-table eatery in downtown Asheville. At McKibbon’s AC Hotel in Asheville, Pollay is a consultant on a rooftop tapas bar called Capella on 9. He’ll be the consulting chef for the Charlotte rooftop restaurant, McKibbon said.

The company also named two hospitality veterans to be managers for the Charlotte hotels. Don Lockhart will serve as general manager for the AC Hotel Charlotte City Center and Maxine Elleby will be market director of sales for the AC Hotel and Residence Inn Charlotte City Center.

“Both Don and Maxine have experience working in the Charlotte hospitality market, and we are confident they will each play a key role in the overall success of the AC Hotel and Residence Inn Charlotte City Center,” said Karl Oates, vice president of lifestyle hotels for McKibbon.

The new hotel tower will be split, with the AC Hotel’s 184 rooms on floors five to 12 and the Residence Inn’s 116 extended-stay suites on floors 14 to 21. A 1,350 square-foot, two-bedroom “super suite” will be on floor 22, adjacent to the bar. Catering to high-rollers, the suite will be available to rent directly from McKibbon.

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CRVA: Tourism a big economic driver for Charlotte region in 2016

Tourism figures released this week by the state show the Charlotte region raked in record dollars last year from spending generated by visitors.

That economic impact is to the tune of $6.7 billion across the Charlotte region — of which the bulk, $5.16 billion — came from visitor spending in Mecklenburg County.

The Economic Development Partnership of North Carolina, a public-private partnership, released on Tuesday a county-by-county breakdown of the $22.9 billion spent by domestic travelers across the state in 2016. The report showed that visitor spending increased in 97 of North Carolina's 100 counties, led by Mecklenburg County. Wake County (Raleigh) generated about $2 billion, while Guilford (Greensboro/High Point) Dare (the Outer Banks) and Buncombe County (Asheville) counties brought in $1 billion each, according to the report, which is conducted annually by the U.S. Travel Association on behalf of Visit North Carolina — the state's tourism branch.

In 2015, North Carolina generated $21.9 billion in spending from domestic travelers, a record at the time.

But the tourism figure reported earlier this year for 2016 topped that amount despite the state's controversial House Bill 2, a piece of legislation controversial for provisions deemed discriminatory against members of the lesbian, gay, bisexual and transgender community. The law, which was replaced this spring, had passed through the N.C. General Assembly in March 2016 and caused myriad sporting events, concerts and other arts performances to pull out of Charlotte and the state.

"Charlotte's visitor economy has strengthened year after year,” Charlotte Regional Visitors Authority CEO Tom Murray said in a statement Wednesday. “2016 presented both challenges and opportunities for our city and state, and we have worked hard to recruit and host impactful events that continuously enhance our city’s quality of life. We wholeheartedly believe that visitor spending enriches our community for not only those who visit here but also for all who call this community home.”

The local tourism agency said visitor spending in the region increased 2.8% from 2015 to 2016. Employment in the sector rose 2.1% year-over-year to 64,490, as payroll increased 3.6% to nearly $2.1 billion.

The CRVA pulled research from the South Carolina Department of Parks, Recreation & Tourism for the Charlotte region's counties located in South Carolina.

While Mecklenburg County overwhelmingly captured the most local tourism dollars and had the most employees in the sector (50,770), Cabarrus County ranked second at $433 million and 4,500 tourism-sector employees. Gaston and Iredell counties came in next, with visitor spending of $251.7 million and $247.26 million, respectively. Tourism employment there was nearly matched ranging between 1,910 and 1,950 workers.

Citing data from research firm Longwoods International, the CRVA said that one million more visitors came to the Charlotte region in 2016 from the previous year, totaling 27.8 million. It also used data from travel research firm STR that showed a 3.3% increase in the number of hotel rooms sold in the Charlotte region from 2015 to 2106, totaling 9.6 million and generating $993 million in hotel room revenue.

To determine the impact of visitor spending in North Carolina, the U.S. Travel Association study accounts for sales and tax revenue data, employment figures as well as other industry and economic data.

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Big new hotels are popping up all over uptown. Are there too many?

Developers are rushing to open new hotels uptown and gearing up to start construction on more, betting that even as supply surges there’s enough demand from travelers to fill the hundreds of new rooms.

And long-simmering talk of a new, 1,000-room hotel – considered the gold standard for luring big conventions and mega-events – appears to be gaining momentum. Such a hotel, which could require a potentially controversial public subsidy, has long been a dream for Charlotte boosters.

Developer Johno Harris said this week that he thinks there’s enough room, and enough demand, for such a hotel at the huge new development Lincoln Harris is building on Stonewall Street.

“I think that Charlotte is at a stage in its career that the demand for a large convention hotel is there,” Harris told the Observer. “We’ve got the land. I think there’s a lot of opportunity to do that.”

Michael Smith, CEO of Charlotte Center City Partners, declined to comment specifically on what he’s hearing about a new convention hotel. But he agreed with Harris’ general premise.

“There has been interest expressed from the market to look at our center city,” said Smith.

Even without a single new mega-hotel, the growth of uptown’s hotel market has been dramatic, with about 1,000 new rooms set to open in a one-year span. That’s more than a 20 percent increase.

Almost 500 new rooms have been added uptown already this year, with the Embassy Suites, Springhill Suites and Ivey’s opening their doors. Another 217 rooms are coming this fall, when the new Kimpton opens next to Romare Bearden Park, and 300 more rooms will follow in early 2018 when the dual branded AC Hotel/Residence Inn by Marriott opens atop the EpiCentre.

After that, developers plan to start construction on another round of new hotels.

The Grand Bohemian, a 254-room luxury hotel on West Trade Street next to the Carillon building, is planning to break ground by the end of the year. A 270-room Intercontinental hotel is part of the Carolina Theatre renovation underway on North Tryon Street, expected to open in 2019. On Stonewall Station, a new Home2 Suites by Hilton that will add about 150 rooms could also start construction later this year.

“These construction booms on the hotel side come in waves,” said Vince Chelena, executive director of the Charlotte Area Hotel Association. “I think developers see they can make some money.”

“We’ve absorbed it pretty well, so far,” he said.

And it’s not just uptown that’s seeing more hotels. A 219-room Tru by Hilton/Hampton Inn & Suites broke ground last week near the airport. A 188-room Marriott hotel is opening next spring near Northlake Mall, and a 270-room Homewood Suites/Hilton Garden Inn is opening next month in SouthPark.

Figures from the Charlotte Regional Visitors Association show the new supply is starting to have an effect on occupancy. As of April, hotels in Mecklenburg County were averaging 70.2 percent occupied, down from 72.6 percent as of the same month last year.

But despite that, the average daily rate travelers paid was actually up slightly from 2016, reaching just over $113 a night. And revenue per available room, a key metric of health in the hotel market, was flat at just below $80 a night. That means that even though the number of rooms is going up, hotels aren’t lowering rates yet, because demand is still strong enough to make up for it.

Vinay Patel, president of SREE Hotels, opened a new Springhill Suites across from the Spectrum Center in April. He said that so far, the hotel is doing better than his company’s projections. And though Patel is keeping a wary eye on the number of new hotels hitting the market, he said business demand remains strong.

“Supply is definitely an issue, a concern, but the corporate transient market is sill pretty robust,” said Patel. “The fundamentals are still OK. Unless something really crazy happens and the fundamentals drop off, we’ll be OK.”

Tom Murray, head of the CRVA, agreed.

“A temporary flattening of occupancy doesn’t seem to be a main concern,” he said. “What we’re also seeing is still strong revenue growth. All in all, I’m comfortable with the market trends.”

A 1,000-room hotel?

Uptown’s hotel market has grown up with the city. From 1,676 rooms in 1985, the number of rooms had nearly tripled to 4,568 by 2015, according to Charlotte Center City Partners. There are now just over 5,000 hotel rooms uptown.

Right now the closest Charlotte has to a 1,000-room hotel is the Westin, with 700 rooms, which opened in 2003. The city invested about $16 million in the project.

Tom Murray, head of the CRVA, said the 150- to 300-room hotels that have made up most of the new supply in Charlotte so far don’t generate new demand, because they don’t have the meeting space and mega-blocks of rooms that help lure large conventions.

“They tend to use the existing demand,” said Murray. “They don’t bring demand generators like large meeting space.”

In recent years, Austin opened a 1,066-room Fairmont hotel, Houston added a 1,000-room Marriott Marquis and Boston announced a 1,000-room Omni Hotel.

“We’re falling behind them in large hotel development. We need another large, convention center hotel in our community,” said Murray.

Depending on the amount of public money involved, such a proposal could be controversial – just look at the dispute over public funding for a Major League Soccer stadium in Charlotte. The CRVA is also seeking about $100 million to renovate and upgrade the Charlotte Convention Center, adding more meeting spaces in addition the large exhibit halls.

Ely Portillo
Charlotte Observer

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Uptown's newest luxury hotel has an opening date this fall

The Kimpton hotel under construction next to Romare Bearden Park is planning to open Nov. 17 to guests, the company said Wednesday.

The 18-story, 217-room hotel is officially called the Kimpton Tryon Park. The hotel is offering specials of up to 20 percent off for some stays through April 30, and has launched its website, TryonParkHotel.com.

It’s adjacent and connected to the 300 South Tryon office tower being developed next door, where tenants are expected to start moving in this month. The 25-story tower is nearing completion.

The Kimpton Tryon Park will include a ground-floor restaurant, a 1,400 square-foot rooftop bar and event space, and 9,000 square feet of meeting space. It will join a surge of new hotels opening this year uptown, including the Embassy Suites (250 rooms), Springhill Suites (195 rooms) and the boutique Ivey’s Hotel (42 rooms). A dual-branded Residence Inn/AC Hotel by Marriott (300 rooms) is under construction atop the EpiCentre and should open by early 2018.

Ely Portillo
Charlotte Observer 

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CAHA Hires Housekeeping Graduates

We would like to congratulate the new graduates of the CPCC housekeeping certificate program. A graduation ceremony took place today at the CPCC training center and each proud graduate received their certificate from Vince Chelena, CAHA executive director. Then CAHA member HR managers interviewed each graduate. It looks like all will be hired! Congratulations graduates and welcome to the hotel business!

Charlotte convention hotel likely to need hefty taxpayer subsidy

In the spring of 2013, just as a new convention center was about to open in Cleveland, local government and tourism boosters began rallying for a major hotel to boost the project. They had their eyes on recruiting more events, including what became a successful bid to host the Republican National Convention last summer.

By the time the RNC arrived last year, the political convention’s headquarters hotel just happened to be a newly opened 600-room, $275 million Hilton connected to the convention center. Cuyahoga County taxpayers are footing the entire construction bill — and counting on future conventions and other events to make the hotel a financial success.

As the Cleveland example shows, the convention business continues to be a high-stakes affair not just for cities, but often for taxpayers, too. Convention centers almost always require subsidies and are viewed as loss leaders for hotels, restaurants and other tourism industry businesses. Critics contend the investments too often fail to yield a return and, because of national arms races similar to sports stadiums and arenas, require additional taxpayer money to fund renovations and upgrades. And, in many cases, companion hotels.

Charlotte City Council this week heard the beginning of a similar debate likely to gain momentum in the months ahead. In August, council is expected to vote to spend $100 million, using a portion of existing tourism taxes, to pay for renovations and expansion at the 21-year-old convention center. The taxpayer-funded convention center cost $150 million to build.

The Charlotte Regional Visitors Authority listed a convention hotel among its funding priorities for the next six years during a presentation to council. Council member James Mitchell, a Democrat who leads the economic development committee, told CBJ a convention hotel is needed sooner rather than later to take advantage of the convention center upgrades as soon as possible.

Ron Kimble, who is advising the visitors authority as a special assistant to the city manager, listed a convention hotel as a potential target for existing tourism taxes along with more NFL stadium upgrades, an amateur sports complex and the convention center expansion.

So far, reaction has been muted. Mohammad Jenatian, head of the Greater Charlotte Hospitality & Tourism Alliance, a prominent industry trade and lobbying group, told me had heard little about the latest talks to build a convention hotel. Mostly, he said, the emphasis needs to be on any types of projects that can help bring in events and promote visitor spending, a middle-of-the-road statement from a group that usually is entrenched in such negotiations.

A high-profile Charlotte hotel executive who spoke on background said more detail is needed on how much public funding might be involved before determining whether such an investment makes sense. There are roughly 1,000 hotel rooms being added this year in the uptown area and another 2,000 under construction or in the planning stages.

In 2003, The Westin Charlotte opened next to the convention center. The 700-room hotel cost $143 million, including $16 million from the public sector. Tourism executives have said the city needs another major hotel, in the range of 800 rooms or more, so that large-scale conventions can concentrate attendees at one or two hotels rather than being forced to book rooms at smaller, scattered hotels.

“It is a draw if you have a large block of rooms,” Vince Chelena, Charlotte Area Hotel Association executive director, told me. “If meeting planners can utilize one or two hotels, it keeps everybody under a couple of roofs. ... We’ve got a lot of hotels coming online right now — we’re absorbing growth pretty well.”

Occupancy rates have ticked downward in recent months, but average room rates and revenue generated by each available room — two benchmark measures — have held steady.

One of the architects of the Cleveland convention hotel told me this week that it’s all but impossible to lure a convention hotel without providing some public investment.

In Cleveland’s case, the hotel is currently forecast to generate in the range of $43 million annually. Beyond operating expenses such as labor and equipment, and the cost of maintaining and repairing the hotel, $9 million per year will be dedicated to paying back the construction cost, said Jeff Appelbaum, a Cleveland lawyer, who has worked with a number of city and county governments to build sports venues, convention hotels and other projects.

Appelbaum told CBJ it’s possible the county could reap $1 million to $2 million in profit shares if the hotel stays on its present course. Cleveland enjoyed a strong tourism season as the convention hotel opened. In addition to the RNC, the NBA’s Cavaliers won the 2016 championship, an extended playoff run that brought media and other visitors, and baseball's Indians reached the seventh game of the World Series in the fall.

Industry consultant John Kelley cited visitor trends in several cities that have recently opened convention hotels as proof that such investments can generate a return for local tourism.

Appelbaum, the attorney, said one of the first things Charlotte tourism and government executives will need to do is determine what kind of deal they hope to negotiate. In some cases, including Cleveland, the city or county develops the hotel and then hires an operator. Appelbaum estimated Cuyahoga County saved $12 million by not using an outside developer. Other models include hiring a developer to build the hotel and then turning it back over to the public entity to hire an operator or having a developer who owns the hotel and hires an operator.

Subsidies on convention hotels usually add up to 30% of the cost or more, Appelbaum told me. Almost every convention center hotel is publicly owned or subsidized, he added.

Examples abound. In Kansas City, a $310 million, 800-room convention hotel scheduled to open by 2020 includes $35 million in public money as well as free land for the developer. Public money accounts for $74 million, or 31%, of the $240 million, 600-room convention hotel planned in Portland. Nashville taxpayers pumped $128 million into an 800-room Omni convention hotel completed in 2013. And so on.

Risks range from the competition among cities to land conventions and conferences to the volatility of the overall economy. And, of course, convention hotels always require extensive trade-offs, starting with a commitment to block off large chunks of rooms for conventions and meetings — and often at discounted rates.

Baltimore taxpayers paid the entire cost for a $300 million, 750-room Hilton convention hotel that opened in 2008. Since then, according to sister paper Baltimore Business Journal, the city-owned hotel has lost $80 million. The losses prompted the head of the Baltimore council to recommend selling the hotel two years ago, but, as of now, it is still owned by local government.

 

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City eyes publicly funded convention hotel

For years, rumors have popped up about whether and when the time might be right to build a convention center hotel in the range of 800 to 1,000 rooms. On Wednesday, Charlotte City Council member James Mitchell, who leads the economic development committee, told CBJ the time is now.

During an interview about prospects for the city to help pay for a Major League Soccer stadium— an issue that resurfaced on council’s agenda on Monday— Mitchell explained the need for a convention hotel as one of several reasons the city is reducing its possible investment in the stadium by $14 million.

Obviously, $14 million isn’t going to build a hotel. Mitchell pointed to possible tourism tax funding for a hotel, an amateur sports complex and other projects as the basis for trimming the soccer proposal to $30 million from $43.75 million. In January, council was asked to vote on committing $43.75 million for soccer, but instead backed away altogether, citing other priorities and an upcoming budget negotiation.

A different portion of tourism tax money would be used for a convention center hotel than the one eyed for an MLS stadium.

The budget passed this month in a unanimous vote, leading to the resurrection of the soccer talks. A convention center hotel proposal is sure to stir debate about how best to use taxpayer money as well as the risk of spending additional money on the convention industry, a loss leader in just about every city in the nation.

“We have to upgrade now,” Mitchell said of considering a hotel. In large measure, he said, beginning discussions this summer about a hotel that would include public funding makes sense because council is expected to approve a proposed $100 million upgrade to the convention center in August. “We need a convention center hotel to separate us” from similar-sized cities, Mitchell added.

His sentiments dovetail with a presentation on hospitality projects delivered to council by Ron Kimble, a former city manager who now is a special assistant to the city manager. As part of a detailed explanation of the four sources of tourism tax revenue, and how each of those sources can be used, Kimble listed “Convention Center hotel partnerships” among target projects over the next six years.

An internal study by the Charlotte Regional Visitors Authority two years ago found that a lack of meeting space, a need for updating the look of the convention center and a lack of large-scale hotels are the largest hurdles for recruiting events against rivals such as Tampa, Nashville, Baltimore and Indianapolis.

Mitchell didn’t disclose any potential funding scenarios for a convention center hotel beyond saying it could, and likely would, include public money.

Cities including Indianapolis, Dallas and Cleveland have used tax money to help pay for similar projects aimed at boosting convention bookings. A 1,000-room JW Marriott in Indianapolis next to the convention centeropened in 2011. The $450 million project included $60 million from local government.

Also in 2011, Dallas opened a 1,000-room Omni hotel tied to its convention center. Public money paid the $500 million tab for the city-owned hotel. And last summer, as Cleveland hosted the Republican National Convention, a 600-room Hilton convention hotel opened. It cost $276 million, with Cuyahoga County paying the construction tab. The county owns the hotel.

Adam Jones, a convention and meetings expert at consultant PwC, said that while the industry has rebounded from the recession, growth across the country is nominal because of a heightened awareness of higher travel costs, among other factors. Cities are also focusing more on finding ways to make their destinations unique and more convenient. The convention center renovations project here includes improved pedestrian access to a nearby development on Stonewall Street that will be anchored by a Whole Foods grocery store and an emphasis on making it as easy as possible for convention-goers to reach uptown attractions on foot.

The largest uptown hotel, the 700-room Westin Charlotte, opened in 2003. City funding accounted for $16 million of the $143 million project cost. In return, the city received 500 spaces in the adjacent parking deck as well as access to use conference rooms in the hotel.

According to the 2016 visitors authority annual report, the convention center hosted 522 events last year, most of them for local groups and meetings. Of that total, 31 events were conventions and trade shows — the ones that bring in regional and national attendees and generate tourism spending through hotel room bookings and other visitor spending. Like most cities, Charlotte’s tourism and convention industry is heavily subsidized through taxes on hotel rooms, restaurant meals and rental cars, money used to help pay for marketing campaigns, offset operating losses and pay back construction and maintenance costs on various arenas, museums and theaters.

The visitors authority reported revenue of $15.2 million for the convention center last year, a figure 8% higher than budget forecasts, but down 12% from revenue of $17.2 million in fiscal year 2015.

Mohammad Jenatian, head of the Greater Charlotte Hospitality & Tourism Alliance, an industry trade group, said he hasn’t been involved in preliminary talks about a convention hotel. In general, he said, “Our position has always been that we need to invest dollars in demand-generators” to help tourism expand.

Occupancy rates, room revenue and demand for hotels in Charlotte all made gains last year, according to various industry measurements and studies. This year, 1,000 new hotel rooms will be added uptown and 2,000 are under construction or in the planning stages.

An industry study by consulting firm PwC found that the number of conventions, group conferences and trade events nationwide stayed steady from 2009 to 2012 at 1.8 million. During that period, attendees increased to 225 million from 205 million and direct spending from those events grew to $280 billion from $263 billion.

Erik Spanberg
Charlotte Business Journal

'Brunch bill' for Sunday morning alcohol sales is headed to the governor

RALEIGH-- The “brunch bill” to allow alcohol sales at 10 a.m. on Sundays – instead of noon – passed a final Senate vote on Wednesday night and now heads to Gov. Roy Cooper, who’s expected to sign it.

The final vote was 39-7, an easy approval despite objections from some conservative legislators who worried it could affect church services and lead to more drunken-driving accidents. There was no debate on the bill Wednesday night.

The bill would allow restaurants to begin serving alcoholic beverages at 10 a.m. on Sundays, a major priority for the restaurant and hotel industry. Retail stores could also begin selling alcohol at 10 a.m. Local governments would have to agree to the earlier hours.

The N.C. Restaurant and Lodging Association praised the bill’s passage in a news release. “This is an exciting new option for the hospitality industry,” CEO Lynn Minges said. “North Carolina joins 47 other states that allow some form of early Sunday sales of alcohol. The passage of SB 155 will help restaurants to better meet the needs of their guests, particularly where tourism drives business or where local residents demand more choices.”

The bill also includes a provision allowing craft distilleries to sell up to five bottles of their liquor to visitors who tour their facility, up from one bottle under current law. Distilleries could also offer quarter-ounce samples at festivals, trade shows and other events, if they obtain a permit.

A provision allowing distilleries to ship their products to consumers in other states was removed from the final version of the bill in the House.

Other provisions include looser regulations on craft breweries. The new version of the bill would allow breweries located on farms to sell their beer even if they’re located in a dry county where alcohol sales aren’t allowed outside city limits – as long as the local government agrees to issue a permit.

The bill also would allow the sale of “crowlers,” which are 32-ounce sealed cans of beer. It would allow home brewers of beer and wine to offer tastings at home brewing events. And it would allow breweries to offer “guest taps” of beverages produced elsewhere – something that many already do under an unclear law.

The majority of the bill, including the Sunday morning alcohol sales, would take effect as soon as the governor signs it.

Colin Campbell
The News & Observer

New details out on Kimpton's uptown hotel (RENDERING)

San Francisco-based Kimpton Hotels & Restaurants has unveiled the name of its 18-story hotel under construction in uptown Charlotte: Kimpton Tryon Park Hotel.

The 217-room hotel at Third and Church streets — part of a larger mixed-use development that includes a 630,000-square-foot office tower by The Spectrum Cos. and Barings — is on track for an October opening, according to the company. Kimpton Tryon Park will include a ground-floor restaurant, more than 9,000 square feet of meeting and event space (including a 4,000-square-foot ballroom), and a 1,100-square-foot rooftop bar.

Robert Hannigan, who joined Kimpton in 2007, has been appointed as Kimpton Tryon Park Hotel's general manager. Hannigan was previously general manager at Kimpton Hotel Monaco Portland, a 220-room hotel in Portland, Ore.

“I’m tremendously excited about the opportunity to open Kimpton’s first hotel in Charlotte,” Hannigan said in a statement. “Our company is proud to bring its pioneering approach to boutique hospitality to the Queen City, and we can’t wait to introduce Kimpton Tryon Park Hotel to the community this fall."

Ashley Fahey
Charlotte Business Journal

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CIAA Releases Impact Numbers

Estimated economic benefit from staging the Central Intercollegiate Athletic Association basketball tournament dipped this year by $10 million, or 17%, according to figures released by the conference Monday afternoon.

The men’s and women’s basketball tournament generated $47.4 million and brought in an estimated 103,000 to 138,000 visitors, the CIAA said. In 2016, the tournament added $57.4 million worth of spending and spin-off benefits to the local economy and $31.5 million in direct spending on meals, hotel rooms and other expenses. Direct spending for 2017 was $27 million, or 14% below the previous year.

Economic impact for this year was the fourth-highest since the CIAA tournament came to Charlotte in 2006, according to the conference. Local government and agencies contribute $2 million annually to the CIAA tournament through scholarship donations, use of city-owned venues and other in-kind donations.

The CIAA split between venues for the first time in 2017, playing the first part of the tournament at 8,600-seat Bojangles’ Coliseum and ending in the 19,000-seat Spectrum Center. No other annual tourism event in Charlotte has a larger impact than the CIAA, executives at the visitors authority have said.

Next year, the tournament runs Feb. 27 through March 3. The conference, comprised of 12 historically black colleges and universities, including Johnson C. Smith University in Charlotte, is under contract with the city to play the tournament here through 2020.

City Council is examining how to increase attendance and also exploring whether and how to cordon off larger areas of uptown for CIAA-sanctioned events while making changes to permit policies for pop-up events. The latter discussion stems from concerns over shootings and altercations each of the past four years during tournament week. In each case, the incidents occurred near CIAA sites, but not at conference-sanctioned events.

Some on council asked CIAA and tourism executives after the 2017 event to consider putting the week-long tournament at Spectrum Center, the NBA area uptown, and scrapping the games at Bojangles’, the format used from 2006 through 2016. Tom Murray, CEO of the Charlotte Regional Visitors Authority, told the city economic development committee the current split arrangement is better because it saves money — the NBA arena costs more to operate — and because it gives the NBA Charlotte Hornets greater schedule flexibility.

Erik Spanberg
Charlotte Business Journal

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Marriott Center City Sold

The newly renovated Charlotte Marriott City Center is changing hands in an acquisition by Carey Watermark Investors 2 Inc. The uptown hotel has been touted as a "hotel idea incubator" or "live beta hotel" — the first of its kind when renovations were unveiled in October — that allows customers to test new product and service concepts first-hand all while giving feedback in real-time. A news release on the property sale this morning offers few details on the deal.

Jen Wilson
Charlotte Business Journal

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