Aug. 26–When Raj and Ajay Champaneri were looking for opportunities to build a downtown hotel to add to their properties on Greystone Boulevard and in Lexington, they chose to fill a gap — literally and figuratively.

They are now building The Vista's first boutique hotel — the five-story, 108-room Aloft — on what was a vacant lot at Lady and Lincoln streets, adjacent to the Washington Street parking garage. Aloft is a hip spinoff of the Starwood company's upscale W hotel group. It will include a trendy WXYZ bar and a tapas and tequila restaurant called Coa Agaveria & Cocina.

Raj Champaneri said that the downtown market should continue to be vibrant, even with another three and maybe four downtown hotels on the horizon.

"It seems like these trends are going to continue," he said of rising occupancy and room rates. "But you go more than a mile out of this zone — the quadrant of Lady and Gervais (streets) — and the (rates) will be difficult to sustain."

Hotel occupancy rates in Columbia are topping out at the highest numbers in years, driving up room rates and drawing the attention of hoteliers looking for opportunities in the Capital City's growing downtown.

The growth is attributed to a bigger University of South Carolina student body, more soldiers set to be trained at Fort Jackson, improved tourist attractions and an exploding restaurant, microbrewery and bar scene.

"We just have a better overall product as a city" to attract and sustain visitors, said Bill Ellen, former owner of the Clarion Hotel Downtown and now the president and CEO of the Midlands Authority for Sports, Conventions and Tourism.

The downtown occupancy rate is 76.9 percent, the highest since the Columbia Metropolitan Convention and Visitors Bureau started segregating the district five years ago. City-wide, the rate has risen from 60.7 percent in 2012 to 67.8 percent so far this year.

Ten years ago, just before the advent of the Great Recession, Columbia had a high of 71.1 percent citywide, but with only 109 hotels, rather than the 126 today, according to the S.C. Restaurant and Lodging Association.

Also, citywide room rates have risen dramatically, from an average of $66.74 in 2009 to $84.44 today, according to the association. Those prices include all properties, from the Hilton Downtown Columbia, which has some of the city's highest rates, to the most modest motel on one of the city's interstate highways.

Downtown, the average nightly room rates have risen from $115.24 in 2012 to $138.55 today.

It ain't Manhattan, but it's a big jump for a city not previously known for anything approaching high prices, outside of the occasional Gamecock football weekend or the Republican and Democratic political primary seasons.

"Those are the highest numbers I've seen since I've been here," said Ellen, who arrived in Columbia from hotel-saturated Myrtle Beach in 1989.

And he predicted that any new downtown hotel coming on-line during this downtown growth spurt is going to be successful. "I think the Aloft hotel will come out of the ground doing gangbusters," he said.

'It's all interrelated'

The growth is due in large part to:

— An expanding University of South Carolina student body. More students mean more parents and more alumni coming to visit.

— More soldiers set to be trained at Fort Jackson. The nation's largest basic training installation has picked up another training battalion of 2,000 soldiers — its 11th — which will draw another throng of family members to graduations every week.

— Improved attractions like Riverbanks Zoo, which this year added a sea lion and other exhibits, and the State Museum, which added a planetarium. And the State House is now open for free tours every Saturday, along with improvements to other smaller attractions.

— Downtown's exploding restaurant, microbrewery and bar scene. It's drawing a new group of tourists here and keeping travelers longer.

"It's all interrelated," said Kelly Barbrey, vice president of sales and marketing for the Midlands Authority. "The university is growing because Columbia is more appealing. Columbia is more appealing because the university is growing. And that's not to mention the fort and state government."

And, said John Durst, president and CEO of the S.C. Restaurant and Lodging Association, tourism as a whole is having a banner year in South Carolina.

"More people are coming and they are coming for longer stays," he said. "And Columbia is becoming more of a destination."

More hotels on the way

Downtown Columbia, which saw the 130-room Hyatt Place open last year, is set to get three new hotels in addition to the Aloft.

Hotelier Rick Patel is converting Ellen's old Clarion property on Gervais Street into two side-by-side hotels — a Hilton Garden Inn that's being built from the ground up and a Home2 Suites that will locate in the former Clarion building. Patel also owns the upscale Sheraton hotel on Main Street, converted from the 1913 Palmetto Building, and other properties.

A hotel also is envisioned for the Kline Center project announced for Huger Street at Gervais, although the hotel brand has not been revealed and work on the project has not started.

And more may be on the way.

"I have spoken to a surprising number of hoteliers who are just looking around, seeing what's possible," said Fred Delk, executive director of the Columbia Development Corp., which encourages and guides investment in The Vista. "And it's the numbers that are getting their attention."

Also, markets in larger cities like Atlanta and Charlotte "are becoming maxed out," said Andrew Lucas, general manager of the Inn at USC. "Developers don't want to compete in Atlanta if they can come to Columbia and be a big fish."

Most potential developers, Delk said, are contemplating small 80- to 100-room, high-priced boutique hotels like Aloft, or large 200- to 250-room full service hotels. And they want to be centrally located to The Vista and a resurgent Main Street.

Parking is a problem

But there are problems on the horizon.

Parking is key, Delk said. Main Street alone has a deficit of 1,800 parking spaces, and the problem is being exacerbated as more buildings are renovated on Main Street for retail, and parking lots become sites for new buildings.

Aloft and Hyatt Place are tied to the Washington Street garage; the Hilton to the Park Street garage. Patel's Home2 Suites and Hilton Garden Inn project have surface parking

But the city will probably require developers to pitch in on new garages in the future, particularly in the Vista.

"Obviously the city is looking at different ways to partner with developers," Delk said.

One glaring deficit for downtown is a lack of full-service hotels. There are only three — the Hilton, the Courtyard and the Marriott. And the prospect of another will likely be tied to what experts say is a much-needed expansion of the Columbia Metropolitan Convention Center, by far the smallest venue of its type in the state.

"It's difficult to bring large conventions in here because Columbia is competing with Myrtle Beach, Charleston and Greenville," Champaneri said. "But if they can get an expansion of the convention center, that would make a real difference in the market."