Downtown Hotels: Some Numbers

The downtown hotel market has a high occupancy rate, rising rates, and many more rooms in the development pipeline. 

The occupancy rate for downtown’s 1,798 hotel rooms rose to 67.7 percent in the first seven months of 2012, up from 64.9 percent a year earlier, according to Smith Travel Research, a research and consulting firm.  The national occupancy rate for the same period was 62.3 percent (see table below).  Downtown Buffalo occupancy rates ranged from a low of 45.5 percent in January to 82.7 percent in June.  Industry standards suggest it takes a 60 percent occupancy rate for a hotel to break even.

Hoteliers are responding by hiking prices: For the first seven months of the year, the average downtown daily room rate rose to $107.84 up 4.4 percent from the same period in 2011.  Room demand has increased from 226,687 rooms booked from Jan-July 2010 to 237,987 in the same period in 2011, and 250,738 this year.  Revenue per available room (RevPAR), a key metric that accounts for both occupancy and room rate, rose from $61.77 in 2010 to $67.04 in 2011 to $73.05 in 2012.

For all of Erie County’s 9,163 rooms, the January through July occupancy rate was 65.7 percent, up from 64.3 percent for the first seven months of 2011 and 61.6 percent in 2010.  There were three hotels with 326 rooms added outside of downtown from January 2011 through July of this year.  The average daily room rate from January through July was $93.05, an increase of 3.8 percent for the same period in 2011.  Revenue per available room (RevPAR) went from $53.52 in the January to July 2010 period to $61.17 in the same period this year.

Room demand in Erie County has been increasing in recent years in large part due to Canadian travelers and shoppers.  There were 2,062,665 rooms booked from August  2009 to July 2010.  From August 2010 to July 2011 the number booked was 2,161,954.  In the following twelve month period through July 2012, 2,231,337 rooms were booked.  Downtown has 18.8 percent of Erie County’s hotel rooms and is ‘capturing’ 19.6 percent of the total number of rooms booked.

Downtown and the region’s positive hotel numbers are drawing interest from developers

Currently there are two properties with 128 guestrooms under construction downtown: the 32-room “Lofts on Pearl” and a 96-room Courtyard by Marriott at 125 Main Street.  These will increase the number of downtown hotel rooms by seven percent.

Developers aren’t satisfied as the supply of hotel rooms could balloon over the next few years.  Redevelopment projects at the Tishman Building, Curtiss Building, and the Statler are each expected to have hotel components.  New buildings at 50 Court Street and 1001 Main Street are also planning for hotel rooms along with office and retail space, and Uniland Development is said to be considering an Aloft hotel for the corner of Delaware Avenue and Chippewa Street.  A full-service hotel with 200 rooms, which would be the largest new hotel built since the Hyatt opened in 1984, is planned by Sabres’ owner Terry Pegula and Benderson Development for the Webster Block.

All totaled, the 700 or more planned rooms will increase the number of hotel rooms downtown by 1/3 or more.

Hotel development isn’t limited to downtown.  A number of hotels are planned or underway near the airport, in Williamsville, Amherst, and elsewhere.  Even if all of the planned projects don’t materialize, the local hotel market is going to get a lot more competitive. 

smithtraveljuly.jpg

Source: Smith Travel Research

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24 comments
sonyactivision
sonyactivision

The HSBC Tower might make a good candidate for a major hotel. If all else fails with leasing it out as offices, a reclad and hotel conversion there could put downtown over the top in terms of available rooms in the metro.

"Realist"
"Realist"

Sounds like there is strong demand for Downtown hotel rooms. That would usually be a good case to make for adding new ones.

But we are talking about Downtown here and that place scares the heck out of me. Therefore, I'll argue against any new hotels there based on the objective criteria that 70% of WNYers don't live in the City of Buffalo and that Hart Hotels doesn't want any more competition.

BuffaloQPublic
BuffaloQPublic

Re: Statler

It should be obvious to City Hall that they need to release the $5 million that's owed to Mark Croce for critical repairs without further delay. The scaffolding should be a prompting, daily reminder. It makes the building an offensive neighbor of the new court building.

He's proven his commitment through his swift, commendable rehab actions.

Approximately, one year has passed since the agreement. Winter is approaching. Do they think their promise froze the deterioration of the building? (The City would have been compelled to outlay significant repair dollars if he had not rescued the landmark.)

paulsobo
paulsobo

The point that seems to be missing is that business downtown must be growing drastically in order to finance this growth in hotel rooms.

If so, then why no call for new office buildings and a new convention center?

It seems lopsided and I dont have the answer.

Texpat
Texpat

Onion Garden. That about sums it up. LMAO.

Chris
Chris

I do a bit of traveling and stayed there a year ago. Everything was new and nice.

I've been in four star hotels that have seen better days. My room at the Hyatt was a sold four star in my opinion.

townline
townline

I doubt there would be many fracking folks staying anywhere near downtown. Closest they would get is the airport.

Dan
Dan

It's supply and demand. Demand being:

* Cross-border shopping.

* BNIA (pre/post flight stays, park-sleep-and-fly).

* Bills and Sabres.

* Colleges/universities (sports, events, parents visiting, speakers, etc).

* Expats visiting relatives/friends.

Less of a factor, but growing somewhat:

* Flight crews.

* Travelers on multi-day drives.

* Contractors (specialty construction, cable TV, networking, disaster remediation, etc).

Future demand:

* Hydrofracking (roughnecks, engineers, administrative staff).

grad94
grad94

i wonder if any of the rising room demand has anything to do with the national preservation conference last year.

cookiestastelikesomecookies
cookiestastelikesomecookies

"Every hotel in the Buffalo area should have a City Guide or a planner listing every event in the area for that weekend, with complete directions of how to get there, or at least a click away on your smart phone. It should also promote indie restaurants so that they don't have to go do Appleby's or the Onion Garden."

Isn't that what the artvoice does?

WCPerspective
WCPerspective

It is surprising to me. I thought all of the rooms and common areas were recently renovated? The lobby looks great. Anyone stay there or have friends stay there recently???

Rand503
Rand503

There are so many things we could do to attract more of our friends across the border. Back when the dollar was stronger, my aunt and uncle ran a motel and would periodically place ads offering to take canadian money at par. That doesn't make sense today, ( as that would likely be a bad deal for them!). However, we should be offering package deals of shop, eat, and sleep for the whole family.

This sort of feedback is essential -- it shows that Canadians need kid friendly things to do.

Every hotel in the Buffalo area should have a City Guide or a planner listing every event in the area for that weekend, with complete directions of how to get there, or at least a click away on your smart phone. It should also promote indie restaurants so that they don't have to go do Appleby's or the Onion Garden.

Too much to print and distrbute monthly? Then at least devise something that can easily be downloaded and viewed on a smartphone.

I should be able, with just a few clicks, be able to find all cultural and sports events in the city this friday. I should be able to narrow that down to just theater or music. I should be able to find a restaurant closeby, in my price range that will be acceptable to kids, but not a chain. I should be able to realize that I have to leave the mall by 5pm in order to eat and be at the theater by 8pm. The program should remember what I did last time I was in Buffalo and make suggestions based on previous preferences as to what I should do this time.

Everything cultural should know it's Canadian audiences and should be marketing to them. Opening curtain should be timed to be convenient for them, canadian money should be accepted for all transactions (it's a nice favor when people dont have US cash and would prefer not to charge it).

The list goes on. But it's true -- with 6 million people, that's a hefty tourist trade. And since these folks keep coming back, we need to continually offer something new to interest them. It's not enought to have a a first class art musuem, because once you've seen it a few times, you want something else. This is why we need a very broad cultural scene.

Rand503
Rand503

Not surprised that the Hyatt is getting dumpy and a bad rep. Does Paul Snyder still own it, or his son? They milked the city for a lot of money over the years to build and operate a private enterprise and must go down as one of the biggest sweetheart deals in the city. When they were the only kids on the block, they could do well, but with the competition, maybe they will clean up their act.

Or, more probably, they will threaten the city that unless they get more tax rebates and cash they will threaten to close it.

JSmith
JSmith

The Statler is not (yet?) a hotel. It is only used as a banquet facility right now. Everything above the ground floor is, as you guessed, shuttered.

elmdog
elmdog

Great thread, can you forward your remarks to the ownwer of the statler, who has seemed to have gone into hiding...He has another project sitting idle for a boutique hotel as well that would be incredible...Keep coming back...in 3 or 4 years you will see a whole new city

defender110
defender110

...one more thing I would like to point out; with regards to marketing Buffalo to Torontonians which number over 6 million now, is the proximity of Buffalo being 90 minutes by car. There are not many alternative urban environments as close with maybe the exception of Hamilton which doesn't hold a candle to Buffalo and could never be a destination for an overnighter. I think the biggest detriment to urban Buffalo would be the lack of activity at night in the core which could be somewhat daunting;nevertheless, coming to your city for past few years I see more people and activity as well as new neighbourhoods resurrecting themselves. A drive through the cottage district, Delaware and all of Elmwood area is just special, fantastic architecture and it all seems to slowly coming together. Buffalo is on the cusp .

elmdog
elmdog

After reading the first thread and running into a family of 5 from North of GTA at Europa(2 parents and 3 small children).....Please market Canada like this......Visit Buffalo for a weekend, growing culturals, waterfront....A place where you can take family for dinner and a hotel for the price of lunch in toronto....

It seems like a no brainer, I would spend millions on advertising just north of us.....

This Asian family at Europa couldnt of been nicer, and it was there third time here...They used trip advisor and were having a good time but did ask about kid friendly choices.....

elmdog
elmdog

Great thread, can you forward your remarks to the ownwer of the statler, who has seemed to have gone into hiding...He has another project sitting idle for a boutique hotel as well that would be incredible...Keep coming back...in 3 or 4 years you will see a whole new city

hamp
hamp

So.....

does anyone know what happened to Ciminelli's plan for adding a hotel to their Children's Ambulatory building?

They were supposed to present to the Planning Board yesterday.

South Buffalo Drifter
South Buffalo Drifter

The NHL lockout may affect the totals for this year. If there is no hockey you'll see a dramatic decrease unfortunately.

townline
townline

There already is a bed tax. That's largely what funds the CVB.

Travelrrr
Travelrrr

This is impressive development.

I support the call, made by others, to levy a bed tax, the proceeds from which could be used to support a) preservation initiatives and b) the cultural organizations....both of which contribute enormously (if not predominantly) to Buffalo's revitalization.

defender110
defender110

I am a Canadian who travels to Buffalo often and chooses to stay in the downtown hotels so the kids and myself can enjoy the expanding cultural attributes of the city; my wife runs to the malls.We usually stay in the Hampton inn which is very nice and kid friendly, the Embassy suites too is excellent,the Mansion is too Che Che but stunning, the Hyatt has become dumpy and I and a most of my friends will no longer will stay there, the hotel up at main and Chippewa I think it,s a Journeys inn is ok but a little dated . The hotel we stayed at this summer was above all, the exception l I give a big WOW , the Lafayette, the service was superb, the hotel was an art deco gem that feels like you have gone back in time, the rooms huge , clean and luxurious ......I think u got the ideas, we loved it and wil stay again. I took photos to show friends back in Toronto and can't wait to stay there again. I did walk into the Statler, is it open or closed was confused ,a lot scaffolding on the outside but stunning Georgian interior lobby but was asked to leave because the hotel is only open for private engagements , bizarre you would think they would want to show off the place but assume the rest of it is shuttered upstairs ...why? Considering you need hotel rooms , this place would be great magnet to your city's burgeoning tourist market and in conjunction with an onslaught of high Canadian dollar patrons,

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