Aug. 30, 2005 --In the next five years, the downtown landscape will become even more crowded with hotels: Several new properties are in development phases, bringing thousands more rooms to the city.

While downtown already boasts more than 11,000 hotel rooms, at least five properties under development could add as many as 2,000 rooms by 2008.

Even though other Texas metro areas have built up too quickly and then suffered from low occupancy rates, hotel experts believe San Antonio remains stable.

"As long as the demand for hotels stays where it is, then we should be fine," said Todd Walker, vice president of Source Strategies, a local hotel consulting firm.

"Some cities have overbuilt, but these hotels fill a need as long as occupancy stays high."

A PKF Consulting Texas Hotel Industry Report last year said that in 2001, San Antonio added the fewest rooms among Texas markets.

And in 2002, San Antonio benefited from an increase in bookings at the Convention Center and in short-drive vacationing as a result of the Sept. 11 attacks.

Recent studies suggest that San Antonio continues to be a top leisure destination, and a market to which most visitors drive.

Most recently, San Antonio had a record second quarter in the number of hotel rooms booked in the city.

Some of the major projects occurring downtown include the Hotel Contessa at Market and Presa streets with 265 rooms, which will be complete in November. The all-suite hotel will have a restaurant and bar overlooking the River Walk.

A 109-suite Staybridge hotel is planned near Sunset Station with an estimated finish date of 2006.

In June 2006, the 24-story Alamo National Building at St. Mary's and Commerce streets will become the Drury Plaza Hotel. The first stage of the hotel will open with 305 rooms, and the second phase could have as many as 80 more.

Across from this property, Drury also has a 150-room Inn and Suites property.

The Drury Plaza Hotel will make 13 hotels for the chain, with six of them carrying the Drury name.

Curt Greer, Drury's regional sales manager, said even with two of its hotels across from each other, the city has plenty of demand.

In fact, he said, "San Antonio has lost a lot of room nights due to not having sufficient hotels for large conventions," Greer said.

With an estimated completion date of 2007, the historic Gibbs Building at Alamo and Houston streets will turn into a five-star, 91-room, boutique-style hotel with a restaurant in the lobby.

Broker Richard Reiss said the independent property, which is still awaiting a name, will be restored inside and out.

"A lot of historic buildings are converted and the facade is retained but the interior is gutted," Reiss said.

"Here, most of the interior will be restored, showing marble, hardwood floors and beautiful architectural features."

The granddaddy of all the properties will be the 1,000-room Convention Center hotel managed by Hyatt Corp.

The 34-floor hotel will be adjacent to the Lila Cockrell Theater and will take the place of the 1,200-space Convention Center Garage at Market and Bowie streets. It's scheduled to be completed in 2008.

Ray Halani, director of operations for the 133-room Riverwalk Plaza Hotel, said an important factor affecting all the downtown hotels is when these new rooms become available.

While the smaller hotels won't have much of an impact, he said, the 1,000-room Convention Center hotel could pull guests from other properties.

"Controlled growth is good," Halani said.

"It depends on the timeline of when these rooms come in. When inventory increases and demand hasn't caught up with it, it's easier to reduce prices. Then it gets a little cutthroat."

Others contend that even with the city's steady growth in hotel rooms over the years, San Antonio needs more rooms to lure convention travelers.

"This most recent increase in hotel development will result in a more competitive overall package when pursuing convention business," said Janis Schmees, acting executive director of the San Antonio Convention & Visitors Bureau.

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