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In San Antonio, The Benchmark Managed Hotel Contessa
 the Only Luxury Hotel Scheduled to Open in 2005
By Adolfo Pesquera, San Antonio Express-News
Knight Ridder/Tribune Business News

Aug. 6, 2005 - Some interruptions are a blessing.

Had the hotel that was once to be named Embassy Suites started construction as originally planned, its first anniversary in business would have been marred by the Sept. 11 terrorist attacks, and its bookings dried up by the travel drought that followed.

Today, the timing is much better and the name is more appropriate. What is now the Hotel Contessa is, after all, on a bank of the San Antonio River in a former colonial possession of the Spanish crown.

Under construction since the spring -- after delays caused by a dispute over an exclusivity deal -- scaffolding still surrounds the project. Dust, wooden planks and a beehive of construction workers provide a shroud to a luxury hotel whose coming out is scheduled for early November.

Judging by its lobby alone, the 12-story hotel will be among the most impressive in the city.

Guests entering the terraced lobby at street level will have an immediate view across its expanse to the river. There are similarities to the Hyatt Regency with its interior water features and stories-high atrium. Down the stairs of the lobby to the river level, Hotel Contessa guests will arrive at a two-story waterfall graced with tall palm trees.

A skylight that spans more than 1,200 square feet beams natural light down 12 stories. Balcony terraces on each floor provide views down to the lobby.

Dave Lagarce of hotel management company Benchmark Hospitality International will be general manager.

"We have 28 hotels in our portfolio," Lagarce said. "This is the only one in San Antonio."

That exclusivity works for the owners now. But exclusivity obligations with the previous management company were a deal-breaker six years ago when Hixon Properties Inc., the developer, tried to go with the Embassy Suites Hotel chain.

The Embassy name, under control of Hilton Hotels Corp., caused a lawsuit with Palacio del Rio Ltd. The owner of the only downtown Hilton-managed property had enjoyed an exclusivity agreement dating to 1968 and wouldn't tolerate Hilton having dual loyalties with a newcomer just a few blocks down the river.

With the litigation behind it, Hixon joined forces with giant Houston developer Hines Interests. They own the property through Riverton Suites Ltd. and are building with a $30 million loan from Frost National Bank.

Benchmark's strategy for filling up the 265 rooms, all suites, is to market Hotel Contessa as a high-end locale for corporate meetings. There will be 10 state-of-the-art private meeting rooms totaling 10,000 square feet for executive sessions.

Lagarce is quoting room rates between $129 and $289 per night. Amenities include a river-level bar, a restaurant featuring rotisseried meats and other Spanish cuisine, a rooftop pool and a spa.

Hotel Contessa also has the advantage of being the only luxury hotel scheduled to open in 2005. And though Moody's Investors Service has warned investors away from San Antonio's limited-service hotel market, claiming it's overbuilt, there is still confidence in the high-end market.

Second-quarter hotel occupancy rates were the city's strongest on record, noted David Cooksey, research and development director at the San Antonio Convention & Visitors Bureau. San Antonio's 70.3 percent occupancy rate was second only to San Diego among its Southwest competition.

"This year, especially this summer, has been our best ever," Cooksey said. "Next year should be a strong year, just like this year. So (Hotel Contessa) is opening at a great time."

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To see more of the San Antonio Express-News, or to subscribe to the newspaper, go to http://www.mysanantonio.com.

Copyright (c) 2005, San Antonio Express-News

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