|By Susan Feyder, Star Tribune,
MinneapolisMcClatchy-Tribune Regional News
Apr. 21, 2008 --Major hotel companies continue to expand in the Twin Cities, although recent industry reports suggest that the current development cycle could soon draw to a close.
The most recent addition to the market is a 119-room Residence Inn by Marriott in Plymouth, developed by the lodging division of Minneapolis-based CSM Corp. The hotel, which opened last week, is the 16th Marriott-branded hotel in the Twin Cities market.
The hotel is part of Plymouth Pointe, a retail and hotel project at Interstate 494 and County Road 55 developed by CSM.
The Plymouth hotel is the latest product of a boom that began about two years ago and has seen numerous hotels built throughout the Twin Cities. Other Marriott-branded establishments to open this year include a 115-room Courtyard by Marriott developed by Torgerson Properties in Maple Grove.
In Bloomington, M.A. Mortenson recently completed the 256-room Hilton Minneapolis South/Bloomington at I-494 and France Avenue.
In downtown Minneapolis, recently opened hotels and others under construction are adding about 750 rooms -- a 12 percent increase to the downtown market. They include the Hotel Minneapolis in the renovated Midland Bank Building, a W Hotel in the renovated Foshay Tower, an Aloft Hotel near the Guthrie Theater and a Starwood Luxury Collection Hotel in the recently opened Ivy condominium and hotel project near the Minneapolis Convention Center. On the edge of downtown, a 210-room Hilton Garden Inn is being built by Minneapolis-based Global One Commercial.
The activity has marked a significant change for the market, where the last major hotel to open downtown before the current round of development was the Graves 601 in 2003.
But a recent report by HVS Global Hospitality, a New York-based hotel consulting firm, suggests that the pace of development is slowing here and nationwide. HVS said the past several months had seen an increase in canceled hotel projects across the country, a result of developers' concerns about a possible glut of rooms and the difficulty in obtaining financing.
Figures compiled by Tennessee-based Smith Travel Research show a 2.2 percent drop in average occupancy for Twin Cities-area hotels for the 12 months ended Feb. 29. That's larger than the decline of less than 1 percent for hotels nationwide.
The addition of several upscale hotels in the past year, such as the Westin Minneapolis in the former Farmers & Mechanics Bank Building, has contributed to an increase in the average daily rate charged by area hotels. As of Feb. 29, the rate had increased to $98.93, up 5 percent in the past 12 months, Smith Travel said.
Susan Feyder --612-673-1723
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