Tuesday, Nov. 06, 2012

Raleigh’s hotel market heating up

Glenwood South’s first hotel makes its debut this month, and merchants hope the 126-room inn opens a new pipeline of business for nearby restaurants, galleries and shops.

Visitors flock to the avenue for dining and nightlife, especially on the weekends, but they don’t have a place to stay within easy walking distance.

That will change with the Nov. 20 opening of a Hampton Inn & Suites at the corner of Glenwood Avenue and Johnson Street – the first new hotel in the downtown area since the Marriott opened along Fayetteville Street in July 2008.

Hampton Inn now uses a boutique concept for its center-city hotels, said Loren Gold, executive vice president of the Greater Raleigh Convention and Visitors Bureau.

“The new model for that product is very upscale, very urban,” Gold said. “People will be pleasantly surprised when they walk into the hotel.”

The Hampton Inn isn’t the only news on the local hotel landscape.

On Fayetteville Street downtown, the Sheraton Raleigh Hotel will undergo renovations to create a more modern restaurant space, lobby and common areas. The 353-room hotel was acquired by Oaktree Capital Management and Northview Hotel Group last month for $20.236 million.

Elsewhere downtown, the 202-room Clarion Hotel on Hillsborough Street is slated for a renovation in the next year after it was purchased by Miami-based Sound Hospitality Management in September for $9.35 million.

Longer term, N.C. State University is working with developers on plans for a hotel on Hillsborough Street across from the school’s bell tower, on a site that currently belongs to Sadlack’s Heroes. In meetings with neighborhood groups, developers mentioned a brand under the Hyatt umbrella, but no decisions have been announced.

Downtown advocates have preached the need for more hotel rooms to make the city’s convention center more conducive to hosting large conferences and events. The current supply of 1,000 rooms is not enough, they say.

“We’re very bullish on the fact that downtown can sustain another 400 to 500 rooms,” Gold said.

Several of the proposed hotel projects were delayed by lack of financing amid the sluggish economy. But the local hotel industry has displayed signs of a rebound.

The occupancy rate in the downtown Raleigh market so far this year has been higher than the rate for Wake County, the state and the United States, according to Smith Travel Research, a Tennessee company that tracks the lodging industry.

The rate in downtown was 63.6 percent through the first eight months of the year, up from 62.7 percent a year ago. Revenue per available room, a key industry figure, was $74.85, up from $69.75 during the same period last year.

A hotel on Glenwood South “has been a missing piece for a long time,” said Sarig Agasi, chef and owner of Zely & Ritz restaurant on Glenwood South.

The Hampton Inn will not have its own restaurant, Agasi noted, making it more likely that guests will venture onto the street for drinks and dinner.