Hotel Online 
News for the Hospitality Executive

Despite Occupancy Dip, Builders Plan
 More Anchorage, Alaska Hotels
By Sarana Schell, Anchorage Daily News, Alaska
Knight Ridder/Tribune Business News

Sep. 9, 2004 - All those new hotels in Midtown Anchorage may have tipped the supply-demand balance, as the occupancy rate and average room price finally fell last year. City bed tax revenue also dipped last year, to $10.3 million after two years at $11 million.

Still, even with more hotels opened this summer, investors are bullish on Southcentral lodging, with a new luxury suites hotel slated to go up in Midtown next summer.

Occupancy rates and room costs for Anchorage hotels have been higher than national averages for years, and developers responded by building more than 700 new rooms in the last few years, most in Midtown Anchorage, with others in downtown, Eagle River and Wasilla.

Anchorage alone saw an 18 percent increase in midpriced rooms built this year, said hotel consultant Michael Mohn of Seattle-based Jinneman, Kennedy & Mohn.

A similar boom in the late 1990s caused occupancy rates to drop, but they remained in the 70 percent range, Mohn said. Last year fewer than 70 percent of Anchorage's hotel rooms were rented on average.

"That is the first time we have seen a significant downturn in that midscale market," Mohn said.

Navin Dimond, principal for Denver-based Stonebridge Companies, said he's not concerned about one down year on a 30-year investment horizon.

"You know it's going to happen," Dimond said.

Stonebridge built a Hampton Inn in 1997, added a Hilton Garden Inn in 2002 and a Homewood Suites this year.

An Embassy Suites, another Hilton brand, will go up next summer on Benson Boulevard across from the Mall at Sears, Dimond said. The six-story building will feature a full atrium, he said, and 145 luxury suites.

"By no means are these huge hotels," Dimond said. "If somebody's building a 600-room hotel, yeah, I'd be worried."

Besides the Embassy, Mohn knew of no big plans on the horizon.

This year Midtown Anchorage got four new midpriced hotels, with 449 rooms total.

In addition, some existing hotels have been remodeled, rebranded or resurrected.

Holiday Inn is due to become a Howard Johnson Plaza on Oct. 1, though, so Mohn said that might cause Holiday Inn officials to consider building when they wouldn't otherwise.

Two long-time Anchorage hotels, the Samovar Inn and the former Kobuk, got economy franchise face-lifts and structural upgrades this summer. The Samovar, which ran late-night television ads in Fairbanks decades ago, now has a new roof, sprinkler system and the Rodeway name and blue-and-white colors. The old Kobuk on Fifth Avenue is now a Red Roof Inn.

Randy Comer, a commercial real estate agent with Re/Max in Anchorage, specializes in lodging properties and called the market wonderful for investors.

"We're hoping we can absorb rooms like we did three or four years ago," said Comer, adding that he's closing on a small Anchorage hotel himself next week.

"We're having a fantastic year," Comer said he's hearing from others in the industry, "and it looks like '05 is going to be a better year."

Doug Dreher agrees.

"I personally feel real bullish about Anchorage," said Dreher, president of The Hotel Group, an Edmonds, Wash.-based company that runs several Alaska hotels, including the new Motel 6 and Fairfield Inn in Anchorage.

The city is optimistic about this year, too, estimating bed-tax revenue of $11.7 million.

"The true test really comes in the next four months," Mohn said, when summer tourists are gone and hotels are left divvying up crucial in-state business. "They'll be chopping up that pie smaller and smaller."

-----To see more of the Anchorage Daily News, or to subscribe to the newspaper, go to

(c) 2004, Anchorage Daily News, Alaska. Distributed by Knight Ridder/Tribune Business News. For information on republishing this content, contact us at (800) 661-2511 (U.S.), (213) 237-4914 (worldwide), fax (213) 237-6515, or e-mail HLT, IHG, CD, ACRFY, CHH,

To search Hotel Online data base of News and Trends Go to Hotel.OnlineSearch
Home | Welcome| Hospitality News | Classifieds| Catalogs& Pricing |
Viewpoint Forum | Ideas&Trends | Press Releases
Please contact Hotel.Onlinewith your comments and suggestions. 

Back to September 9, 2004 | Back to Hospitality News | Back to Home Page