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Colorado Hotel Boom Spurs New and Renovated Lodging Properties

By Eric Peterson

In 2017, Colorado’s hotel inventory is surging in a big way and shows no signs of letting up. “It certainly is a boom time,” says Amie Mayhew, president and CEO of Colorado Hotel & Lodging Association. “Hotels across the state are doing very well. We’re seeing a lot of happy hoteliers. In the mountains we’re seeing a lot of renovations, and a lot of new construction on the Front Range.”

The Rocky Mountain Lodging Report pegged statewide occupancy at 69.1 percent for 2016, up slightly from 68.8 percent in 2015. But average daily rate (ADR) and revenue per room were both up by about 5 percent for the year, hitting $140 and $105 respectively. In Denver, the 2016 occupancy rate was even higher: 77.1 percent as ADR eclipsed $150.

With such gaudy numbers, it’s no wonder that the metro area is the epicenter of the state’s hotel boom. “Between 2017 and 2018, we’re going to be adding 7,300 new rooms into the marketplace,” says Rachel Benedick, vice president of sales and services at VISIT DENVER.

Considering there were about 44,000 rooms at the beginning of 2017, that’s a huge jump of 16.5 percent in 24 months. Benedick notes, “Developers have their eye on Denver.”

Convention, business and leisure travel have all been notably strong since 2014, she adds, and Denver’s new hotels will help support this three-legged stool. “It gives people lots of choices and options. That’s what we’re seeing from conventions right now: They want to give people lots of options.”

The national brands nicely complement boutique properties. “That’s what helps set a city apart,” says Benedick of the latter. “I can’t stay at The Crawford when we’re in Boston.”

The Green Rush

Approved by Denver voters in 2015, the coming expansion of the Colorado Convention Center will help support more steady hotel business when it’s completed in 2020. “It’s going to be pretty epic,” says Benedick. “The expanded space is going to allow us to handle multiple groups at a time,” meaning fewer “peaks and valleys” for downtown hotels.

“Denver continues to get a lot of interest,” says Benedick. “We really remain on the tip of people’s tongues.”

Some observers say the so-called green rush has catalyzed the city’s hotel boom. “I honestly think it’s the boom the marijuana industry has hit Denver with,” says Chris Starkey, a partner in AXS Group, a Denver-based experiential event group. “You continue to see Denver over and over as one of the top-rated cities to move to. When CEOs and conference attendees are looking at destinations, they see the buzz from Colorado, and they want to experience that.”

Denver is “starting to compete with tier-one cities,” Starkey says, but needs “larger meeting space and more creative meeting space.” He’s looking forward to the opening of the Gaylord Rockies Resort & Conference Center in Aurora in 2018 or 2019, touting the 1,500-room property’s “great accommodations and state-of-the-art meeting space.” He suggests that it’s catalyzing a new event hub with “three or four hotels being built for overflow.”

Starkey’s newer favorites in Denver include The ART, a hotel, and Halcyon. “They’re really unique, with an innovative feel,” he says. “There’s a certain culture you get from walking in the door you wouldn’t get from a box hotel.” 

Outside Denver

Beyond the mushrooming hotel community in central Denver, the metro area and the rest of the state are seeing an influx of investment into major renovations at a number of notable existing lodgings, including The Inverness Hotel & Conference Center (which is becoming a Hilton property) and the Denver Marriott Tech Center in the southern suburbs as well as Hotel Boulderado and St Julien Hotel & Spa in Boulder.

Boulder also will see three new properties open in 2017: a dual-branded Embassy Suites and Hilton Garden Inn (also referred to as Hiltons on Canyon) at 28th Street and Canyon Boulevard, and a Residence Inn nearby at 26th and Canyon (but with no meeting space). 

The new hotels will fill a big void. “We had three properties demolished [in 2013 and 2014],” says Boulder Convention and Visitors Bureau Executive Director Mary Ann Mahoney. “We lost 341 rooms.”

Fort Collins is adding 164 rooms and meeting space downtown with The Elizabeth Hotel opening this fall. Plus, the two major conference hotels in town, Fort Collins Marriott and Hilton Fort Collins, have undergone major renovations recently.

Where else are new hotels needed? “We need some more properties in Colorado Springs,” says AXS’s Starkey. “That’s a huge need.”

But that gap is being addressed as well. Chelsy Offutt, director of communications for the Colorado Springs Convention & Visitors Bureau, points to the new Great Wolf Lodge (opened December 2016) and a 10-story Hilton Garden Inn that broke ground in February. When it opens in 2018, the 165-room project (featuring about 5,000 square feet of meeting space) will be the first new hotel in downtown Colorado Springs since 1967.

“With the addition of various projects and the soon-to-open Olympic Museum [slated to open in 2018], there does seem to be more of a demand in the downtown Colorado Springs region,” Offutt notes. “The range of new properties that have started, or will be starting, will provide new price points and options for those traveling to the destination.”

Hotel occupancy in Colorado Springs is at a near-record as of early 2017, and ADR has hit record levels. “Hotel building usually lags occupancy and ADR growth, so I’m not surprised to see the interest now,” Offutt says.

Deana Mitchell, founder of Realize Colorado, a Global DMC Partner with offices in Denver and Winter Park, covers the entire state. Denver’s hotel boom “is good for the city, especially with the upcoming addition to the convention center,” she says. 

“We’re really excited about all of them,” says Mitchell. “We need more certain times of the year. It’s impossible to find a room when there’s a citywide conference.”

Of recent Denver openings, she echoes Starkey’s praise for Halcyon in Cherry Creek. “It’s awesome. It’s very hipster and unique,” Mitchell says, with quirky perks like vinyl records and turntables in the room.

Mitchell says more remote places are a harder sell for meetings, so new confer – ence-oriented properties are rare. Telluride has a similar problem as Denver with big events, compounded by extreme seasonality, adds Mitchell, who launched her business in Telluride in 2011. “They can’t keep people yearround. It’s like Snowmass was 20 years ago.”

But as of 2017, Snowmass is seeing more activity in the pipeline, with the Limelight Hotel slated to open in 2018. Likewise, the W Aspen at the base of Aspen Mountain on the former site of the Sky Hotel is scheduled to open for the 2018-19 ski season. 

It’s a heady time for Colorado’s hotel industry with numerous properties under construction and others on the drawing board. It’s all good news for the state’s meet – ing planners, who can offer clients shiny new and upgraded options as they target more and larger events.