|By Melissa Campbell, Alaska Journal of Commerce, Anchorage|
Knight Ridder/Tribune Business News
May 9, 2004 - Nearly 450 new hotel rooms are set to be available in mid-town Anchorage just in time for the onslaught of summer tourists, but Eric Simonich isn't worried.
The general manager of the Hilton Garden, Simonich said bookings for the summer season are looking strong. And there are no plans as yet to offer special deals to keep visitors from trying out the Motel 6 or the Fairfield Inn down the street. The Hilton will keep its roughly $200-a-night room rate.
"When a new place opens nearby, hotels sometimes will drop their rates for a while," Simonich said. "But we're not going to offer any special deals now; we don't need to. During the first quarter this year, we were over our projections and over what we did last year."
While he wouldn't give specific figures, Simonich said business came in at about 5 percent over projections.
Evidently, word has gotten around in the industry that business in Alaska is good. Hotels are popping up across the state. Since 1997, the hotel industry has added at least 34 new hotels, totaling nearly 4,100 rooms, according to Alaska Economic Trends, a publication by the state Department of Labor.
Several existing hotels remodeled and have added rooms.
And these hotel chains are no strangers to Alaska. The Hilton Garden opened in mid-town Anchorage in June 2002. Next door, the 120-room Homewood Suites opened in April.
Homewood, which will cater to extended stay travelers and those with families, is owned by Hilton. The Anchorage Hilton Hotel is located downtown and, in 2006, the company plans to open an Embassy Suites near the Sears Mall, Simonich said.
Marriott is associated with five facilities in Anchorage and one in Fairbanks, all of which were built since 1997. Aspen Hotels is about to complete its plan to construct five hotels around the state with a 138-room facility near the University Center.
Economists and those in the industry believe that a good economy and projections for stronger tourism numbers are responsible for the spurt of hotel construction.
"Hotels, in the long run, have been good investments," said Dale Fox, executive director of the Alaska Cabaret, Hotel, Restaurant and Retailers Association. "Entrepreneurs are seeing an opportunity in the Alaska hotel market and are responding with their dollars, making an investment and hoping for the future."
Tourism, an industry that grew consistently for decades, dropped after the Sept. 11, 2001, terrorist attacks, but is expected to swing upward again, said state economist Neal Fried.
"The 2001 tourism season was over before Sept. 11," he said. "Prior to 2002, the industry grew uninterruptedly for 30 years or longer. If you assume we will go back to that trend of growth, and the general belief is there, then the opportunity for the hotels is there."
An estimated 1.6 million visitors came to Alaska last year, a 2 percent increase over 2002, according to a report by the Alaska Travel Industry Association. The group expects a slight increase this year.
With more visitor stays comes more municipal revenue in the form of bed taxes. Alaska's tax rates range from 10 percent in Dillingham and Pelican to a mere $4 a night in Wrangell. Anchorage has an 8 percent bed tax rate.
In 2002, the last year figures were available, 35 Alaska cities collected more than $19 million in bed tax revenues, according to the state Department of Community and Economic Development. Of that, Anchorage collected more than $11 million.
Some areas depend on their hotels to bring in visitors and much-needed revenues. In 2003, 74 percent of the Denali Borough's revenues came from its 7 percent bed tax, according to a McDowell Group report. Denali has less than 2,000 residents.
Talkeetna quickly became the back-up town from which to view Mount McKinley after the 200-room Talkeetna Alaska Lodge opened in 1999.
"We're in a good building peak right now," said CHARR's Fox. "Historically, about every 10 to 12 years, we see significant expansion in hotel room construction. It'll stop here pretty soon, then about a decade later, we'll get another."
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(c) 2004, Alaska Journal of Commerce, Anchorage. Distributed by Knight Ridder/Tribune Business News. HLT,