Hotel Online News for the Hospitality Executive Hotels Developers Planning as Many as Six New Hotels Over the Next Two Years in Anchorage, Alaska By Sarana Schell, Anchorage Daily News, Alaska Knight Ridder/Tribune Business News
Jun. 25, 2003 – Yet more hotels are on the horizon for Anchorage, with the possibility that supply may outstrip demand. As the Anchorage lodging market continues to outperform the Lower 48, investment groups that already own Anchorage properties are planning more.
Developers expect to build and open as many as six new hotels over the next two years.
Saturation has to happen sometime, said Seattle hotel consultant Michael Mohn. But the investors know the market intimately, know the other projects are coming, and are going ahead.
“They don’t care,” Mohn said. “They say, ‘Anchorage has been good to me.’ ” The average occupancy rate was 72 percent in 2002, compared to 59 percent in the Lower 48, Mohn said. And the average room in Anchorage cost $113 a night, compared to $83 Outside.
A group of Outside investors led by A&A Construction & Development Inc. of Spokane, Wash., plans to add a Motel 6 and a Marriott Fairfield Inn to the four properties it already owns in Alaska, said Doug Dreher.
He is president of The Hotel Group, an Edmonds, Wash., company that manages the hotels. The group owns Holiday Inn Express, Microtel, and Comfort Inn at Ship Creek in Anchorage, and a Comfort Inn in Fairbanks.
The two new properties are scheduled to open early next year, said Dreher, on land off C Street between Tudor and International Airport roads. That land is leased from Tiger Trust, an Anchorage-based private investor group.
The 106-room Fairfield is a mid-priced hotel similar to the Holiday Inn Express, he said, while the budget-conscious Motel 6, with 83 rooms, is similar to Microtel. When the company’s current hotels fill up, Dreher said, staff members can pass overflow to the new properties. The additions also make room for staff to move up the ranks, he said. Dreher estimated the new hotels might create 60 jobs.
Financing is not yet set, he said, but building permits are being processed and the site is to be graded in August. “Both are being built because we’re having success in the Anchorage market,” Dreher said. He attributed growing demand to more business diversity in Anchorage.
Aspen Hotels of Alaska is waiting for a bank’s OK to open an Aspen Suites Hotel for the long-term traveler in Anchorage, said Carol Fraser, Aspen vice president. The company has hotels in Soldotna, Valdez, Fairbanks and Juneau.
Seeking a new niche, she said the hotel would offer limited service to keep rates low, feature rooms with kitchens, and have a minimum one-week stay. It should open next year behind the Moose’s Tooth north of 36th Avenue.
Stonebridge Companies of Denver is also angling for Anchorage’s longer-stay market. Next year, it plans to add a Homewood Suites, complete with kitchens, to the Hampton Inn and the Hilton Garden Inn it already owns, said Ryan Kim of the Hilton Garden Inn. Stonebridge is also considering opening an Embassy Suites in 2005, catering to the upscale market. Developer Randy Kaer is building a Ramada Inn at the east end of downtown Anchorage, having switched it from a Howard Johnson franchise.
On the west end of downtown, the Inlet Tower Hotel is undergoing more than $5 million in renovations. The proposed building would mean a 14 percent growth rate in the mid-priced market between 2002 and 2004, said Mohn, of Seattle-based consultants Jinneman, Kennedy & Mohn. The growing supply of customers is not likely to keep pace, he said.
Still, after the building boom of the late 1990s, he said, the market hiccuped then kept growing. “Next year,” Mohn said, “will be the next big test.”
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(c) 2003, Anchorage Daily News, Alaska. Distributed by Knight Ridder/Tribune Business News. SXC, HLT, CD,