June 27–The nation’s reviving hotel business includes downtown St. Louis, where operators are spending millions of dollars to cater to the growing number of visitors.
Leading the way, at least in project size, is the $30 million renovation of the Renaissance St. Louis Grand, downtown’s main convention hotel and the region’s largest inn.
An affiliate of Haberhill LLC of Potomac, Md., bought the 917-room hotel last year for $26 million and is doing the top-to-bottom rehab. Nour Laasri, the general manager, said the makeover is needed to compete downtown.
“A lot of hotels have renovated in this market,” he said.
Nearly as large as Laasri’s hotel is the 910-room Hyatt Regency at The Arch, which occupies a full block at Fourth and Chestnut streets. Clearview Hotel Capital, of Newport Beach, Calif., bought the hotel in October from a partnership of Goldman Sachs’ Whitehall Street Real Estate fund and Chartres Lodging of San Francisco.
Bryan King, the hotel’s director of sales and marketing, said completion of the Arch grounds renovation will have an “immensely positive impact on our business.” Hotel revenue in the first five months of 2015 is better than in the corresponding period last year, he said.
After becoming a Hyatt-managed hotel in 2008, the hotel by the Arch underwent a $62 million renovation. King said the new owner recognizes that more investment is needed.
“We are looking at everything, from the lobby to meeting space, to guestrooms and back-of-the-house areas,” he said.
A steadily improving economy and relatively low gas prices are contributing to more leisure travel and greater convention business nationwide.
CBRE, a commercial real estate firm, reported that in the first quarter of 2015 U.S. hotels had a fourth consecutive quarter of growth of at least 8 percent in revenue per available room (known as RevPAR), the industry’s key metric. The industry is forecast to achieve an all-time high occupancy rate of 65.7 percent this year.
RevPAR and hotel occupancy rates also are rising in downtown St. Louis, officials said. Figures for 2015 were unavailable but Smith Travel Research reported a daily occupancy rate of 66.2 percent and RevPAR of $100.59 for hotels in the city of St. Louis in 2014.
John Bettag, vice president of sales for the St. Louis Convention & Visitors Commission, said the agency continues “to see a great deal of convention booking momentum across the region.” He said an example was the meeting last week of the National Athletic Trainers’ Association, which drew 10,000 people to America’s Center and more than 20 hotels.
The CVC said that in fiscal 2014, conventions and meetings in St. Louis produced hotel stays of 625,175 room nights, compared with 553,588 room nights the previous year and 498,122 room nights in 2012.
Downtown St. Louis has about 7,500 hotel rooms even after the 780-room Millennium Hotel near the riverfront closed last year. The cylindrical hotel had only 164 rooms in use when the shutdown occurred.
Speculation has focused on the possibility the 28-story building could be redone as a mixture of hotel rooms and apartments. An executive of Millennium Hotels and Resorts did not respond to a request last week for comment.
Gary Andreas, a hotel consultant based in Chesterfield, said potential buyers have examined the building.
“There’s a parade that keeps walking by and looking at it,” Andreas said. “Perhaps one in 10 actually walks in the front door.”
The location is good but obstacles to renovation are the presence of mold and the structure’s odd shape, he said. As a hotel, the building’s cylindrical form was a poor fit for standard guestroom furniture, said Andreas, adding that most of the building’s large meeting rooms would be useless if it is converted to apartments.
As many as four hotel rooms would have to be combined to produce one apartment, perhaps pushing rehab costs above rents a redeveloper would need to turn a profit, he said.
Across Pine Street from the Hyatt is the 29-story Crowne Plaza, where a transformation is planned. Julie Baker, the general manager, said guestrooms on floors 17 or 18 and above of the will be redone as residences. A detailed conversion plan and its timing have yet to be determined, she said. Baker said the hotel will remain open during the remodeling.
“It’s super busy, and we plan to keep it that way,” she added.
The hotel is part of the Mansion House complex of three towers built in the 1960s.
Andreas said reducing the Crowne Plaza’s room count from 440 to about 225 makes sense because it would give the hotel the number of guestrooms appropriate to its limited meeting space.
While downtown has luxury hotels — the Four Seasons and the Westin — the only hotel in the luxury boutique category is the Magnolia, Andreas said.
Formerly the Mayfair, the 182-room Magnolia opened last summer after a $15 million renovation by its new owner, Stout Street Hospitality of Denver.
Industry observers said downtown might get another boutique hotel at 705 Olive Street. The husband-and-wife developer team of Amy and Amrit Gill recently bought the 14-story building completed in 1893 to the design of renowned architect Louis Sullivan.
The Gills were unavailable to discuss their plans for what is now a lightly occupied office building.
Elsewhere downtown, what had been the Ramada Plaza next to America’s Center reopened this spring after a multimillion-dollar rehab and rebranding of the 293-room hotel as a Holiday Inn.
Still underway is the makeover of Union Station and its hotel.
Lodging Hospitality Management bought Union Station in 2012 and quickly began to freshen hotel, which was part of the 1980s project that remade the century-old train station as a then-trendy “festival marketplace.”
Next up for Union Station is an entertainment area to replace much of the station’s largely vacant retail area. Plans include a small roller coaster and a 200-foot Ferris wheel. Last year, LHM completed the $52 million renovation of the station’s meeting spaces, Grand Hall and 539-room DoubleTree hotel.
Set to debut in August as a 165-room Courtyard by Marriott is the hotel that opened in 1929 as the Lennox. Decades later, as the Renaissance Suites, it was the companion of the Renaissance Grand. Both opened in 2002 and both failed to meet debt obligations.
Holders of the hotels’ bonds foreclosed in 2009. Under new and separate ownership, the hotels are free of old debt and are able to afford needed upgrades.
As a Courtyard owned by Maritz, Wolff & Co., the former Lennox will bookend the convention center as downtown’s primary suites-style lodging with the 212-room Embassy Suites that opened in 2011 in the former Dillard’s building.
The Renaissance Grand, Courtyard, Embassy Suites and Magnolia produce what officials said is a welcome range of hotels near the convention center.
Doug Woodruff, chief executive of Downtown STL Inc., said hotel investments show that “one of the biggest drivers for downtown continues to be our visitors.” He said downtown could support a few more rooms.
“We think there is still some modest room for growth,” Woodruff said.
Tim Bryant — 314-340-8206
