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Monday, April 12, 2021

Room for More Rooms: Downtown Fort Worth wants to book more hotels

Hotels Planned (P) or Under Construction (UC) in Downtown Fort Worth

Hampton Inn & Suites (UC) – 245 rooms

Aloft (UC) – 180

Hilton Garden Inn (P) – 162

AC Hotel (UC) – 200

Marriott Autograph (UC) – 164

Fairfield Inn (UC) – 114

Total: 1,065 rooms

Source: Downtown Fort Worth Inc.

Not since the Omni Fort Worth Hotel introduced its brand of luxurious Western chic to downtown Fort Worth in January 2009, has another new hotel moved in as a neighbor.

That changes soon, as a renaissance of hotel development will bring 1,065 new hotel rooms to downtown within the next few years.

A 2014 study commissioned by the city and the Fort Worth Convention & Visitors Bureau labeled downtown as an underserved market for hotels. Yet the popularity of downtown with both business and leisure travelers has boosted the supply-demand balance to an average 70.4 percent occupancy with $114.23 revenue per available room in 2016.

Three new downtown hotels are expected to open by the end of 2017 or early 2018 with three more in the planning pipeline.

Even with all the new development, downtown Fort Worth will still be short of recommendations in the 2014 joint study.

“We need to erase our hotel deficit with a minimum 1,400 more hotel rooms downtown,” said Bob Jameson, president and CEO of the Fort Worth CVB. “This is not a sudden phenomenon.”

“Our hotel deficit is a reflection of the great development happening in downtown, anchored by Sundance Square, the upward trajectory of our economy and the growth of attractions and quality of life across the city,” Jameson said.

At the top of the list for Jameson and other civic and business leaders is a convention hotel with 1,000 rooms that would make Fort Worth even more attractive and competitive to host large, lucrative conventions.

“Without it, meeting planners have to contract with as many as 15 different properties,” Jameson said.

A convention center hotel is a long-range goal tied to the opening of the new Dickies Arena in two years and the replacement of the downtown convention center arena with more reconfigured convention space that provides greater flexibility. The reimagined convention center would be able to accommodate larger conventions than possible in the current space or two mid-size meetings simultaneously, Jameson said.

“It’s on the 10-year horizon,” said Andy Taft, president of Downtown Fort Worth Inc.

In the meantime, the six new hotels planned or under construction are expected to become their own economic boon for travelers drawn to downtown for business or the dining, culture and entertainment options available in downtown as well as the Stockyards and the Cultural District, where, Jameson said, there is also hotel development interest.

In 2016, downtown had 2,522 hotel rooms, 20.7 percent of the total rooms in Fort Worth. Downtown room nights sold in 2016 topped 680,000 for an occupancy rate of 70.4 percent, according to Downtown Fort Worth Inc.’s 2016 annual report. The report also showed that downtown hotels generated more than $107 million in revenue last year.

The strong numbers are a reflection of the overall increase in growth in room nights sold and room rates in the Dallas-Fort Worth market, according to Source Strategies, a San Antonio-based consulting and research firm for the Texas hotel industry.

In the first quarter of 2017, the D-FW area led Texas’ major metropolitan areas with 28.5 percent share of the total Texas hotel market. First quarter 2017 hotel revenue in the D-FW area rose 3.3 percent over 2016, from $720,569,000 to $744,260,000.

Source Strategies data of the Fort Worth-Arlington area (which includes all of Tarrant County) shows room nights sold rose 2.9 percent in the first quarter this year and room rates rose 3.1 percent. Revenue increased 6.2 percent to $108 million.

“Fort Worth and the D-FW metro area are doing very well compared with the rest of the state,” said Paul Vaughn, senior vice president of Source Strategies.

Vaughn said room supply has risen in the Fort Worth-Arlington area and across all of D-FW, which indicates “a good balance between supply and demand.”

Downtown Fort Worth’s room supply appears to be the exception to that.

Downtown Fort Worth Inc.’s analysis shows downtown’s 2016 room supply in the D-FW market at 3.6 percent, slightly above Richardson’s 3.1 percent, but well below Dallas’ share at 41.9 percent. Fort Worth’s share (not including downtown) was 13.7 percent and Arlington’s was 8.1 percent.

Downtown Fort Worth’s 2016 share of the hotel revenue pie was 5 percent compared to 42 percent for Dallas, 9.3 percent for Fort Worth (not including downtown), 12.2 percent for Grapevine and 16.3 percent for Arlington, according to the Downtown Fort Worth Inc. report

But downtown’s revenue per available room is the all-important figure that is drawing top national brands to open new hotels in downtown Fort Worth. Downtown Fort Worth’s 2016 revenue per available room was $114.23 compared to downtown Dallas’ of 106.28 percent and the nation’s of $81.16, according to Downtown Fort Worth’s annual report.

The new brands slated for downtown are Hampton Inn & Suites, 245 rooms; Aloft, 180 rooms; Hilton Garden Inn, 162 rooms, AC Hotel, 200 rooms, Marriott Autograph, 164 rooms and Fairfield Inn, 114.

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.

Opening by the end of the year or beginning of 2018 are Fairfield Inn, Aloft and Hampton Inn & Suites.

Downtown’s 2016 inventory included 10 hotel properties, ranging from Etta’s Place, a bed-and-breakfast, with a capacity of 10 to the Omni Fort Worth with a capacity of 614.

Civic leaders and downtown planners see the demand for more hotel rooms continue to grow as a result of the opening next year of TEXRail the 27-mile commuter rail line that will stretch from downtown Fort Worth to Dallas-Fort Worth International Airport. The line will make it easier for out-of-town travelers to get to downtown Fort Worth for a visit, meeting or special event.

“Downtown is very appealing to Fort Worth visitors because it is clean, safe, friendly, walkable and has lots of restaurants and shops,” Taft said. “Our hotel inventory is very good and the quality is strong and that makes downtown a great place to stay.”

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