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Sunday, April 11, 2021

Guest Service: Fort Worth looking to grow downtown hotel offerings

Downtown Fort Worth Hotels

Planned (P) or Under Construction (UC)

Aloft (UC) 180 rooms

Hilton Garden Inn (P) 162 rooms

AC Hotel (P) 246 rooms

Marriott Autograph (UC) 164 rooms

Total rooms: 752

Source: Downtown Fort Worth Inc.

Already a popular destination for business travelers and tourists, downtown Fort Worth has also become a magnet for hotel developers.

Within about two years, downtown is expected to add at least six new hotels and possibly more. This growth trajectory follows a prolonged eight-year drought that began with the opening of the Omni Fort Worth in 2009 and ended last year with the addition of two new hotels and a combined total of 359 new rooms.

Despite the growth, downtown still needs more hotel rooms although the deficit is not as steep as it was in 2014 when a Fort Worth Convention & Visitors Bureau study found it to be an underserved market in need of at least 1,400 more rooms.

“There is definitely room for more hotel growth,” said Andy Taft, president of Downtown Fort Worth Inc. “We’re working with several developers to find available land downtown.”

While finding land for ground-up building is a challenge, some developers are eyeing existing properties such as the XTO Energy buildings that the company is selling off as it relocates most of its operations to Houston.

XTO has already sold four of its seven Fort Worth buildings and has its corporate headquarters, the WT Waggoner Building, on the market. Built in 1920, the 20-story double-tower building has historic significance as one of the earliest skyscrapers in Texas and the Southwest.

XTO has two other downtown buildings and plans to keep one for employees remaining in Fort Worth and sell the other. It has not announced plans for either yet.

“We’re getting quite a lot of inquiries,” Taft said of the XTO buildings. “It’s mostly coming from apartment and hospitality developers looking for land.”

Bob Jameson, president and CEO of the Fort Worth Convention & Visitors Bureau, now known as Visit Fort Worth, said that development of up to seven hotels in downtown indicates the strength of the downtown market.

“We still need a 1,000-room convention center hotel for those large, prestigious conventions that do not want to contract with many multiple, smaller hotels,” Jameson said.

The newest hotel properties to open are the Hampton Inn & Suites with 245 rooms and Fairfield Inn and Suites, 114 rooms, downtown and Marriott Courtyard in the Stockyards, 124 rooms.

Downtown Fort Worth currently has 2,881 hotel rooms, which produced more than $116 million revenue in 2017, according to Downtown Fort Worth Inc. data. Another 752 rooms are either planned or under construction.

The newcomers will include an Aloft hotel, with 180 rooms, a Hilton Garden Inn with 162 rooms, an AC Hotel with 246 rooms and a Marriott Autograph in at the historic Sinclair Building, with 164 rooms.

The collection includes full-service, limited service and boutique hotels. AC Hotel is one of the newest and most unique brands in the boutique hotel market.

Despite the need for a large convention hotel, that does not seem to be on the radar currently and could be tied to the expansion and redevelopment of the Fort Worth  Convention Center, Taft said.

“That’s probably in a seven- to 10-year time frame,” he said.

The supply of hotels in downtown Fort Worth accounts for only 3.2 percent of the Dallas-Fort Worth market, edging out on Richardson with a 3.1 percent market share, according to 2017 Downtown Fort Worth Inc. data

Dallas has the largest market share at 42.5 percent. Irving has 16.8 percent, Arlington has 8.2 percent and Grapevine has 6.4 percent. Fort Worth, excluding downtown, claims 12.9 percent of the market.

Downtown with its abundant shopping, dining and entertainment opportunities is a magnet for staycationers and daytrippers and will become even more so when Trinity Metro’s 27-mile commuter rail line debuts later this year, opening a convenient mass transit option for visitors to get from Dallas Fort Worth International Airport and the Dallas area to downtown Fort Worth, Taft said.

Hotel occupancy in downtown Fort Worth was 74.4 percent in 2017 compared to 65.3 percent in downtown Dallas and 65.9 percent nationwide. Hotel revenue per room rose to $123.24 in 2017 up from $114.23 in 2016. By comparison, downtown Dallas’ rate rose from $106.28 in 2016 to $109.18 in 2017. The national rate increased from $81.19 in 2016 to $83.57 in 2017.

Fort Worth’s high occupancy and revenue rate is driving interest in hotel development in downtown as well as other parts of the city.

San Antonio-based Source Strategies, a research and consulting firm for the Texas hotel industry, reported that room nights sold increased 6.5 percent the first quarter of 2018, double last year’s rate for the entire Fort Worth-Arlington market, which includes all of Tarrant County. Room revenues for the first quarter grew 8.6 percent to $244 million, according to the report.

The Dallas metro area’s room nights increased 5 percent in the first quarter with revenues rising 7.9 percent to $566 million.

Although Dallas is a much bigger hotel market, Fort Worth’s percentage growth is higher, according to Todd Walker, president of Source Strategies.

The entire city has become a magnet for hotel growth tied to new developments such as Dickies Arena, Clearfork and in established corridors such as Hulen/Southwest Fort Worth and Alliance, Jameson said.

“There are more than three dozen hotel projects being considered for Fort Worth Jameson said. “As with most real estate negotiations, many of these are confidential or not firm enough to announce publically.

“As a rule, we don’t count hotel projects until the dirt is actually turning,” he said.

Unique properties such as the Magnolia in the Near Southside area and a Spring Hill Suites under construction in the Stockyards that will feature a food concept by celebrity chef Tim Love will also become attractions for visitors, Jameson said.

In 2017, 9.1 million people visited Fort Worth, with about 70 percent coming for leisure and 30 percent for business, with some blending the two together. Those visitors generated a $2.3 billion economic impact and supported 23,000 jobs, according to Visit Fort Worth.

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