By: Julie Wanzer, LEED AP
Denver, CO – ULI Colorado hosted ‘Doors Open to Hotel Boom‘ on Wednesday, December 7th at the EXDO Event Center in RiNo to a mixed crowd of developers, owners, brokers, contractors, architects, engineers and PR and marketing professionals. Executive Director, Michael Leccese, set the stage for the panel that included presentations on both national and local hospitality trends as well as local hotel case studies. The panelists included the following listed below.
Program moderated by:
Brian Corbett, Founder and Chief Experience Officer, Inspirato
National and Local Hospitality and Tourism trends, speakers include:
Larry Kaplan, Senior Vice President Hotel Brokerage and Investment Sales, CBRE Hotels
Stephen Hennis, VP of Consulting & Analytics, STR
Local Case Studies, speakers include:
Dave Johnstone, Chief Investment Officer, Hospitality, McWhinney
Kyle Zeppelin, Principal, Zeppelin Development
Ryan Diggins, Partner, Gravitas Development
Michael Everett, Chief Investment Officer, Sage Hospitality
National and Local Hospitality and Tourism Trends
Larry Kaplan, Senior VP of Hotel Brokerage and Investment Sales at CBRE Hotels, provided a national hospitality overview, noting that supply growth is increasing and will outpace demand for the next three years, but that overall supply is below the long-run average. On the transactions side, he cautioned against increasing difficulty in construction financing and the possible re-emergence of REIT’s (Real Estate Investment Trusts) for hotel financing.
Stephen Hennis, VP of Consulting and Analytics at STR, focused on the Colorado hospitality market, where STR has accounted for $2B in hotel development in Denver from 2015 – 2018, which does not include new investments and renovations. Mr. Hennis echoed Mr. Kaplan’s findings that supply growth is outpacing demand growth in Colorado. He also noted a decline in occupancy rates in Denver, which is currently at 74% occupancy, down slightly from a recorded 76% occupancy rate in October of 2015.
Despite stagnating occupancy rates, Mr. Hennis reported an increase in average room rates in Denver that is expected to continue in 2017. This rate growth is a significant contributing factor to the reported 7.3% increase in revenues from 2011 to 2015 from Denver’s hospitality market.
Local Case Studies
The second group of panelists presented local case studies on hotels in the Colorado market currently under construction. Kyle Zeppelin, President of Zeppelin Development, correlated The Source Hotel in RiNo as an extension of the Zeppelin’s original approach to retail for The Source market, which he described as a “new form of main street.”
Ryan Diggins, Partner at Gravitas Development, presented on The Ramble Hotel. He expressed the development team’s intention to focus on “creating a variety of moments within the space” to include a film screening room, community event space and several small businesses within the hotel itself.
Dave Johnstone, Chief Investment Officer – Hospitality at McWhinney, touched on the Dairy Block development, which includes The Maven Hotel.
Michael Everett, Chief Investment Officer at Sage Hospitality, rounded out the panel mentioning several hotel projects, including the most recently opened Halcyon Hotel in Cherry Creek, the Embassy Suites Hilton Garden Inn in Boulder, and The Maven Hotel as well. In relation to the Embassy Suites, he commented on the several barriers to entry in Boulder and the need to maximize the density for the site, hence the large number of keys at 370.
Despite the current boom in the hospitality market in Colorado, all panelists shared a concern for the fate of the U.S. economy and what the next four years will look like under President-Elect Donald Trump.
Event photos: Business Rewritten
The Source Hotel: Rendering by and courtesy of Dynia Architects
The Ramble Hotel: Rendering by JOHNSON NATHAN STROHE, courtesy of Gravitas Development Group
Dairy Block: The Maven Hotel, Rendering by JOHNSON NATHAN STROHE, courtesy of McWhinney (main image)
Halcyon Hotel: Image courtesy of JOHNSON NATHAN STROHE