Thursday, November 19, 2009

Indy's Newest White Elephant?: Welcome to the New Marriott

Not sure how many people saw WTHR Mary Milz's story on the trouble filling hotel space in Indianapolis and the possible impact of all those hotel rooms in the new Marriott:

Indianapolis - It's the largest hotel in the state. The new JW Marriott is set to open in early 2011, but it's already raising some concerns about keeping it and other hotels full in a struggling economy.

If you're downtown, you can't miss it. Construction crews recently topped off the new JW Marriott and they're just a couple of months from finishing the three other Marriott hotels, which open in February.

"We've already booked those up for the Final Four," said Jeremy Stephenson, REI Investments.

Stephenson told city planners the project is on time and on budget. All told, Marriott Place will add 1,600 rooms to downtown Indianapolis. That's a 30-percent increase.

The new hotel's opening will coincide with the expansion of the convention center, which is meant to bring more business to the city.

But the opening of the complex comes at a time when existing hotels are struggling to fill their rooms. Thanks to the economy, business at downtown hotels is down 14 percent over last year.Even the races didn't quite fill the stands or the rooms.

"There's certainly some uneasiness. That's a lot of rooms coming into Indianapolis," said Phil Ray, Greater Indianapolis Hotel and Lodging Association.

Ray, who represents downtown hotels, says in the short-term it will be tough.

"It's one of those things where we know we'll have to work hard to fill in the gap and get more creative to bring people downtown," he added.

That means more pressure on the people who work to draw conventions here.

"Cities are doing more to entice conventions and they're cutting better deals. We have to try to respond in the competitive arena by coming up with our own packages," said Bill Benner, Indianapolis Convention and Visitors Association.

Of course, last year Indianapolis' City-County Council approved a hike in hotel taxes to give Indianapolis the highest hotel/sales tax in the country. Now the concern is being sounded that Indianapolis may not be able to fill its downtown hotel rooms when the new Marriott came on line. Gee, who could have seen that coming?


Downtown Indy said...

I got a chuckle from the story when I saw it last evening.

I recall JWM halted a similar project in Austin TX - a similar-sized city - last year, I think. At the time I wondered if they might delay this project, too.

Of course we taxpayers fronted $48M to JWM even before the first shouvel turned. I don't know about Austin's arrangements.

M Theory said...

Didn't all of us see that coming, Paul?

Citizen Kane said...

This hotel was built to get the SuperBowl and is just the beginning of the enormous short-term and long-term costs that will be borne by city residents. There is no way possible for them ever to consistently fill these hotel rooms. Several will go out of business or expect additional subsidies etc. This situation is a classic example of over-reach - A city trying to be more than what it is and falling flat on its face. Believe me, five years from now, if not before, the downtown hotel situation will not be pretty.

Nick said...

Jim Irsay is killing the CIB and now drains the local hospitality industry dry.

Apparently the Governor, State Legislature, Mayor, & City County Council are too weak to get Irsay to be a good corporate citizen or philanthropist.

At least the Simon's return a portion of their public subsidies in the form of meaningful community grants, philanthropy, and are a force in attracting new convention business.

Irsay........Not so much

guy77money said...

Not a good time to be adding rooms in downtown Indy. Here's the current occupancy rates and predictions from the per the Calculated Risk web site:

The industry doesn't see a uptick in demand till 2011. Not a big enough increase to absorb 1,600 rooms. I guess they can keep using our tax money to subsidize all these hotel rooms for the convention crowd.