Three of the four hotels built and opened in Columbus in the past 10
years stand in the foreground. Local hotel developers say with two
additional hotels planned for Columbus, the hotel market is maturing and
that more demand may be needed before additional hotels open. Photo by:
Courtesy photo
With five new hotels in two cities and two
more expected to come to Columbus, the past decade has been one of growth for
the hospitality industry in the Golden Triangle.
Columbus gained three hotels from 2007 to
2016 according to STR, a company that tracks hotel performance across the
United States and internationally. That growth led to an increase in rooms from
849 in 2007 to 1,156 last year.
The close of Columbus' Ramada in December
caused those numbers to drop to 1,041 rooms, but that building is currently
being renovated for a La Quinta. Most of those lost rooms should be recaptured
once that location reopens.
With La Quinta coming and a Holiday Inn
Express on Sixth Street North expected to open in June, Carpenter - who's been
with the CVB since 2008 - said she's optimistic about hotels' strength in the
area. The Holiday Inn is expected to add about 80 rooms in Columbus.
"They base it on supply and
demand," she said of hotel developers. "They base their coming here
on a need and the activities that we have created."
A maturing market
Growth hasn't been limited to Columbus.
Starkville has grown from 10 hotels a decade ago to 12 according to STR, with
an accompanying jump from 701 rooms to 873.
Heath Barret, interim CEO of the Greater
Starkville Development Partnership, attributes the growth in hotel rooms to the
city's population increase, to events and to Mississippi State athletics.
"With the industrial growth in the
Golden Triangle, hotel rooms are filling up," Barret added.
Sunny Sethi, owner of the Hilton Garden Inn
in Starkville, as well as the Hyatt Place and River Chase Inn in Columbus said
the Golden Triangle is a good market for hotels, though he cautions that supply
may soon out pace demand.
"It's a healthy market that's been
good for growth," Sethi said. "It's leveling off a bit because there
is a supply now. It's maturing, but it's a good market, and we've done well in
both communities.
"With the other hotel (Holiday Inn
Express) that's opening this year, we will tip the scales so that demand needs
to catch up to supply," he added.
Statistics suggest Sethi is correct.
While demand has increased over the past
decade, occupancy rates have been declining. Last year there was a raw demand
for 647 rooms in Columbus versus 557 in 2007, according to STR. During the same
time period, average occupancy has dropped from 64.7 percent to 55 percent.
Starkville's demand may not be softening as
quickly as Columbus'. Starkville's average occupancy has remained unchanged
since 2007 at 60.4 percent. Hotels saw higher raw demand of roughly 527 rooms
per day last year, compared to 423 in 2007.
Mark Castleberry, a developer with multiple
hotels in Columbus and Starkville, agrees the market is maturing.
"When we built the Fairfield Inn (in
Columbus) in 2011, there had not been a new hotel built in 13 years,"
Castleberry said. "There definitely had been some built-up demand. We
don't see that type of need for additional hotels in the market
now."
Castleberry added hotel room supply needs
to continue to be monitored as the Golden Triangle grows.
Reasons for growth
Castleberry said the Golden Triangle's
industrial growth has been a key factor in the expansion of hotels in the
market. Benefits spread to both cities, he said, but Columbus tends to draw
more of a business crowd, and Mississippi State University has a greater impact
in Starkville.
"There's a direct relationship with
(hotel room growth) to SDI, PACCAR, Airbus, Baldor, and all of those companies,"
Castleberry said. "They are absolutely impactful to the need of hotel
rooms in the market."
Sethi added Columbus hotels benefit
tremendously from both local events and the Baptist Memorial Hospital-Golden
Triangle.
Carpenter pointed out the Golden Triangle's
communities work together when big events come, so the benefits are spread
out.
"We've created, all of us working
together, a lot of synergy. You've got business travelers during the week...
Mississippi State has been huge for us. We're advertising there and letting
people know we offer competitive rates and wonderful restaurant options here in
Columbus.
"When we've brought in fishing and
soccer tournaments, we work with the surrounding towns to bring visitors to all
the communities," she added. "It carries over into Starkville and
Oktibbeha and Clay County and West Point."
aritcle from:http://www.cdispatch.com/news/article.asp?aid=57617
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