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Despite the Economy, Hotel Construction
 Not Slowing Down in Odessa, Texas

By Geoff Folsom, Odessa American, TexasMcClatchy-Tribune Regional News

Aug. 22, 2009 - Like the rest of the Permian Basin economy, the hotel business has taken a hit in the past year. But, unlike many other businesses, there is no sign of hotel construction slowing down.

A new Super 8 hotel is nearing completion near the intersection of the Interstate 20 service road and Pagewood Avenue. Since the 116-room Comfort Inn & Suites opened in December, a 108-room Marriott TownePlace Suites and a 92-room Holiday Inn Express also have opened their doors.

And the building boom isn't over. Construction recently started on a 100-room Hilton Garden Inn at 5221 N. JBS Parkway, just south of the Holiday Inn Express.

Two other companies have their building permits for hotels ready to be picked up at city offices but had yet to do so, said Ralph McCain, city building official.

A year ago, new hotels seemed like a necessity, with many oilfield workers living in existing hotels and travelers scrambling for places to stay.

But all that has changed since the price of oil went on a roller coaster ride and unemployment in Odessa virtually tripled.

In April, May and June of 2008, the city of Odessa brought in $676,000 in hotel-motel tax revenue, but for the same three-month period this year, the city brought in $551,000, despite having more rooms available. James Zentner, assistant city manager, said the numbers reflect both the occupancy rates as well as what the hotels are charging to stay there.

The hotel-motel tax represents 7 percent of what hotels collect.

Less demand has led to lower rates for the city to collect revenue from. In April 2008, the website Expedia.com showed hotels in Odessa (what ones were available anyway) charging between $90 and $169 a night. Now, Odessa hotels charge between $60 and $108 on Saturday and between $60 and $129 on Monday.

Molly Thorn with the Odessa Convention and Visitors Bureau, said that leads to a "catch 22" for her organization, which receives funding from the hotel-motel tax, but also has to help organize conventions that demand large chunks of rooms at reasonable rates.

"We don't want anybody not full, but we do want enough rooms so everybody can get in at a little better rate," she said.

When the TownePlace Suites at 4412 Tanglewood Lane was planned, the economy was booming in the Basin. But when it opened in March, sales manager Kimberly Branam said the hotel had to adjust to a drop-off.

"It's getting better," she said. "With the economy the way it is, you just never know what's going to happen from one day to the next."

At the Holiday Inn Express, one of four Odessa hotels owned by Insignia Management of Midland, manager John Hall said his hotel typically starts out the week slow on Monday and Tuesday, but business picks up the rest of the week.

"Of course we were really slow when we first started, but we had several weekends where we just sold out," he said.

While hotels were likely to fill up no matter what services they offered during the peak economic times, hotels are now raising the stakes.

The newer hotels hope added amenities can bring in customers. The Holiday Inn Express has a large interactive touch screen monitor in its lobby, where guest can get sports scores or directions to nearby restaurants. It also has television screens on each machine in its workout room.

The TownePlace Suites offers a heated pool, hot breakfast and "evening socials" on Monday, Tuesday and Wednesday nights, where guests receive complimentary beer, wine and dinner, Branam said.

"We stay competitive with prices, but we also offer a little more," she said.

The Hilton Garden Inn is billing itself as a "four-star full-service" hotel, with restaurant and bar, along with a gym and spa, said Mark Wyant, owner of Dallas-based Seabrook Lodging Corp., which owns the property. He is shooting to open the hotel on July 1, 2010.

"We feel like we'll be capturing a part of the market that's not been captured in Odessa," Wyant said.

That includes people who have business in Odessa, but stay in Midland, he said.

Wyant said prices for the hotel would be similar to the MCM Elegante and Grande FunDome hotels, and lower than the Hilton in Midland.

But at the Holiday Inn Express, Hall said an upscale hotel could have a tough time making it now.

"We don't need another full-service hotel in Odessa," he said.

For the hotels to make it, Branam at the TownePlace Suites said everyone must work together.

"We try to work pretty closely with the other hotels," she said. "If we do get full, we find what the guest is looking for. If we don't all work together, nobody benefits."

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To see more of the Odessa American, or to subscribe to the newspaper, go to http://www.oaoa.com.

Copyright (c) 2009, Odessa American, Texas

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