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Airport meetings are benefiting from new and improved venues

Airport hotels, like properties in other locations, have been catching up. Average daily rates and occupancies are getting back to the peak levels of 2007-2008 before the financial crisis and economic downturn.

Although new meeting facility growth has slowed in recent years, new options are coming on-line, some of which could turn out to be game-changers in the abilities of certain airport areas to hold meetings. And even more substantial properties appear to be on the horizon a few years down the road.

“As is typical at the start of a new real estate cycle, there are very few large hotels with significant meeting space in the pipeline,” says Patrick Ford, president of consultants Lodging Econometrics, speaking of airline hotels.  “The pipeline will not see any large influx of new project announcements until late in the decade when economic conditions are more favorable.”

He adds that smaller upscale and mid-market branded hotels, generally fewer than 200 rooms, populate a pipeline that is at low levels. “For the rest of the decade it should be a very profitable time for the larger ‘big box’ meeting facilities at airport locations,” he says.

Jan Freitag, senior vice president at Smith Travel Research (STR), points out that the average airline hotel occupancy this year has been on a par with 2007, the peak occupancy year. “The summer was strong for airlines. Demand is increasing, and we are seeing group room rates at airports rising. The growth in supply has been steady but slow,” he says.

According to STR, the average airport hotel occupancy for the first seven months of this year stood at 71.2 percent, the exact same figure as 2007’s peak first seven months. However, the ADR, which peaked at $102.89 in the first seven months of 2008, and bottomed out at $88.64 for the period in 2010, had only gotten back to $97.91 for this year’s seven months. This resulted in revenue per available room (RevPAR) still being down from the peak.

STR lists 31 U.S. hotels under construction with the word “airport” in their name, most of them limited service and with 20 brands represented. All were scheduled to open this year or 2014 except for the largest—the 519-room Westin Denver International Airport and Conference Center. It is on target to open in 2015, DIA’s 20th anniversary year.

Denver Developments
With 29,000 square feet of meeting space including an 8,282-square-foot ballroom, the $180 million 14-story Westin is part of the five-year $544 million South Terminal Redevelopment Program. Also included is a public transit center and a rail station for a commuter rail line that will connect with downtown Denver’s Union Station, 30-minute ride, opening in 2016, and a public plaza.

Adjacent to DIA’s Jeppesen Terminal), the complex will feature a sixth-floor hotel lobby with views of the public transit center and terminal.

“The new Westin will provide the perfect venue for national and international businesses to convene for meetings, banquets and trade shows. Customers will be a quick train ride away from the heart of downtown Denver,” says Stu Williams, program manager for the hotel and public transit center program.

Also under construction near the airport is the 191-suite Woolly’s Classic Suites with 5,000 square feet of meeting space. Opening spring 2014, it will be the first hotel of a new brand planned by all-suite hotel pioneer Robert E. Woolly, CEO of Woolly’s Classic Suites. PageBreak

Edmonton Evolution
The Westin will be connected to a terminal. That makes it one of a select category of hotels for which guests are willing to pay a premium. That’s according to a study of connected US hotels published by Hotel & Leisure Advisors last spring under the headline, “Performance Soars at Hotels Connected to Airport Terminals.”

It found that terminal-connected hotels achieved a higher occupancy and ADR in 2010 and 2011 than their general airport full-service counterparts.

In Canada, a connected hotel under construction will open in spring 2014 at Edmonton International Airport. It will be the first airport-connected Renaissance, and the brand’s first Alberta property, according to Marriott International. Last year, the airport added 480,000 square feet of terminal space and nine gates.

Connected to the terminal by a heated walkway, the new 213-room Renaissance Edmonton Airport Hotel will have 20,000 square feet of meeting/special event space, including a 6,900 square foot ballroom. Owned and operated by Platinum Investments Ltd., an Edmonton-based hotel operator, it was originally planned as a Courtyard by Marriott but was redesigned to reflect the full-service Renaissance.

News from New York
While the majority of properties on STR’s list of 31 hotels under construction provide only limited service, some stand out.  Metro New York airports have the only airport Crowne Plaza and the only airport Embassy Suites under construction. 

JFK will soon get the 330-room Crowne Plaza JFK Airport New York City (second only in size on STR’s list to the Denver Westin) and a 201-room Holiday Inn.

The Crowne Plaza, a quarter-mile from the airport with 5,651 square feet of meeting space, was taking reservations for stays beginning Dec. 8. Holiday Inn Jamaica Queens-JFK Airport, 10 minutes from the airport with a meeting room, was accepting reservations for arrivals starting Jan. 5.

Across in New Jersey, 10 minutes from Newark Liberty International, Embassy Suites Elizabeth Newark Airport with 189 suites and 4,000 square feet of meeting space was also slated to open in December.

Here and There
Among other new hotels is Innisfree Hotels’ 127-room Hyatt Place Pensacola Airport in Florida, which opened last April on airport land with meeting/function space for 1,000 attendees and commercial space, including a bank, offices and restaurants.

In June the new 120-room Four Points by Sheraton, Kelowna Airport with a 3,400-square-foot ballroom opens across from Kelowna International Airport in B.C.’s Okanogan Valley.  Also in Canada, early September saw the unveiling of the 120-room Radisson Hotel & Conference Centre Calgary Airport East, also with 120 rooms, and more than 10,000 square feet of meeting space. PageBreak

Future Growth
According to Lodging Econometrics (LE), airport hotel projects in the U.S. construction pipeline total 99 (13,027 rooms), just 4% of both total U.S. pipeline projects and rooms. Of that number, 29 projects (4,288 rooms) were under construction; 27 (3,335 rooms) were scheduled to start in the next 12 months, and 43 (5,404 rooms) were in the early planning phase.

In 2012, 17 airport hotels (2,184 rooms) opened; in 2011, 14 hotels (1,602 rooms). The company forecasts 2014 will also see 17 projects (2,128 rooms) open, and in 2015, 20 (2,187 rooms).

Among hotels LE expects to be under construction within the next 12 months are two connected properties planned for Sacramento International Airport. Santa Monica, Calif.-based Sonnenblick Development LLC, won the Sacramento County contract last year. Currently none are connected.

Plans call for hotels of 200-plus and 135 rooms, and more than 20,400 square feet of meeting space. They will be attached to the airport’s $1-billion Terminal B, which opened in October 2011.

News reports have indicated that the hotels are a Marriott and a Hyatt Place and that the groundbreaking target is Jan. 1, 2014. However, says Laurie Slothower, Sacramento County Airport System spokesperson, “As we are still negotiating with the developer, it would be inappropriate to comment at this time.”

Florida Facelift
Some airports have convention centers nearby. Miami Airport Convention Center (the MACC) close to Miami International Airport (MIA) in April last year completed a $15 million modernization that included a new 29,000-square-foot ballroom. Also, in July last year, MIA opened its new North Terminal international arrivals facility.

Formerly called the Miami Mart Exhibition Center, the MACC has more than 152,000 square feet of available space. It is adjacent to the 334-room DoubleTree by Hilton Hotel Miami Airport Convention Center, and a mile from the airport. Both are owned and operated by New York-based United Capital Corp.

Toronto Rebranding
One of the largest airport hotel rebrandings came in late August when the 433-room International Plaza Hotel & Conference Centre Toronto Airport became a member of Preferred Hotel Group's Sterling Hotels.

Formerly a DoubleTree by Hilton, it reverted back to an earlier name. The hotel, which boasts 60,000 square feet of meeting space, is planning upgrades that will include the lobby, guest rooms, and meeting facilities.

It is across from the Toronto Congress Centre, which has more than 1 million square feet of space and which in 2011 added a 30,000-square-foot ballroom. Two miles away is Toronto Pearson International, Canada’s busiest airport.

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About the author
Tony Bartlett