Review of H otel Development Guidelines Arlington Entertainment D istrict

Transcription

1 October 2018 Review of H otel Development Guidelines Arlington Entertainment D istrict Submitted to: Arlington Convention & Visitors Bureau Arlington,Texas

2 Arlington Entertainment District 2

3 Arlington Entertainment District Hotels No. Name of Hotel Chain Scale Tier Open Date Rooms 1 Nite Star Inn &Suites Independent 1.00 Jul Ranger Inn & Suites Independent 1.00 Jun America's Best Value Inn Economy 2.00 Jul Days Inn Dallas Arlington NorthCollins Economy 2.00 Jun Extended Stay America Arlington SixFlags Economy 2.00 Sep Howard Johnson Express Inn Arlington Ballpark SixFlags Economy 2.00 Jun Red Roof Inn Economy 2.00 Jun Baymont Inn & SuitesArlington Midscale 3.00 May Candlewood Suites Arlington Midscale 3.00 Aug Hawthorn Suites by Wyndham Arlington DFWSouth Midscale 3.00 May LaQuintaInns & SuitesArlingtonNorth Six Flags Drive Midscale 3.00 Aug QualityInn & SuitesSix Flags AreaArlington Midscale 3.00 Mar Sleep Inn Arlington Near SixFlags Midscale 3.00 Jan Wingate By Wyndham Arlington Midscale 3.00 Feb Comfort SuitesArlington Upper Midscale 4.00 Feb Fairfield Inn & Suites Arlington Near Six Flags Upper Midscale 4.00 Aug Hampton Inn Suites Dallas Arlington North Entertainment District Upper Midscale 4.00 May Holiday Inn Arlington Northeast RangersBallpark Upper Midscale 4.00 Jun Holiday Inn Express & Suites Arlington Six Flags Area Upper Midscale 4.00 Jul TownePlace Suites Dallas Arlington North Upper Midscale 4.00 Jan Courtyard Dallas Arlington Entertainment District Upscale 5.00 Mar Crowne Plaza Suites Arlington Ballpark Stadium Upscale 5.00 Jan Hilton Garden Inn Dallas Arlington Upscale 5.00 Jun Homewood Suites Dallas Arlington Upscale 5.00 Feb Hyatt Place Dallas Arlington Upscale 5.00 Apr Residence Inn Arlington Upscale 5.00 Jul Springhill Suites Dallas Arlington North Upscale 5.00 Jul Hilton Arlington Upper Upscale 6.00 Feb Sheraton Hotel Arlington Upper Upscale 6.00 Apr District Totals / Averages 4.01 Mar-92 3,650 3

4 Arlington Entertainment District 4

5 TEXAS Live! Phase 1 opened 2018 $250 MillionCost 100,000+ sq. ft. entertainment 35,000 sq. ft. conference center 302-room luxury hotel Economic Development Projects Texas Rangers Globe Life Field Opening 2020 $1 Billion Cost 42,000 Seats Retractable Roof 5

6 RevPAR Peaked in

7 Higher RevPAR in Entertainment District 7

8 Arlington s Aging Hotel Inventory 8

9 2010s 1960s 1970s 2000s Average Age: 26 Years 1980s 1990s 9

10 Upper Upscale Upscale Upper Midscale Midscale Economy Independent ,000 District s Hotel Quality Ranges Widely 10

11 Upper Upscale 17% Independent 3% Economy 13% Average Quality: Upper- Midscale Upscale 25% Midscale 24% STR Chain Scales Luxury Upper Upscale Upscale Upper Midscale Midscale Economy Independent District Average Upper Midscale 18% 11

12 Guestrooms: 120 Chain: Upscale Stories: 4/5 Planned Opening:2018 Guestrooms: 268 Chain: Upper-Midscale Stories: 9 Planned Opening:2019 Guestrooms: 302 Chain: Luxury Stories: 14 Planned Opening:2019 Planned Hotels 12

13 Missing Upscale Brands 13

14 Missing Upper- Upscale & Luxury Brands 14

15 Full-Service Requirements (Allowed in District) Limited-Service Requirements (Not Allowed indistrict) CurrentUnified Development Code Guestrooms 200 Room Size 350 sq. ft. Mtg. Space 10,000 sq. ft. Swimming Pool Required 3-Meal Restaurant Required Restaurant Seats 200 Room Service 24-hour Bell Service 24-hour Concierge Service 12-hour Business Ctr. KeyedAccess No Guestroom Minimum Room Size 350 sq. ft. Mtg. Space 5,000 sq. ft. Swimming Pool Required Limited-Service Restaurant Restaurant Seats 40% x Rooms No Rooms Service No Bell Service No Concierge Business Ctr. KeyedAccess 15

16 Recommendations 1. Clarify policyobjectives. 2. Consider using published chain scales as a proxy for quality. 3. Prioritize certain development sites or zones in district. 4. Address outdated service and facility requirements. 5. Consider special set of standards for independent hotels. 6. Different standards for new-construction vs. conversions. 16

17 Recommendation #1 Clarify Policy Objectives Related to Hotel Development. A. Encourage Development that Will Increase District sadr Full-service vs. Limited-Service might not be the best metric. Some limited-service brands would likely bring up ADR average. Fear limited-service will dilute demand for higher-rated hotel development? Private capital attracted to Upper-Midscale and Upscale chains. Upper-upscale and Luxury may require large subsidies. B. Construction Quality Is the real policy goal Higher ADRs or ConstructionQuality? Consider height requirements or building material requirements. 4-story (wood frame) vs. 6-story (steel frame) C. Under Demolished? UDC has aided this. Average existing hotel is over 25 years old. Obsolete products can survive if newer products are not allowed. Consider minimum standards for conversions and/or independent. D. Can Some Lower-Rated Hotels begood? Displace older, obsolete hotel products. Introduce popular brands/products to Arlington. Offer varying price points to attract wider range of tourists. 17

18 Consider using published chain scales as a proxy for quality. Recommendation #2 A. Clarity and Certainty Chain scales are published annually. Every U.S. brand is included in one, and only one, chain scale. No ambiguity or debate. Transparent for everybody to observe. B. Matches Policy Objective Higher chain scale = higher-rated hotel brand. Chain scale tied directly to a brand s Average Daily Rate (ADR). C. Quality Control Built-In Chain acts as watchdog to protect brand. If brand s ADR declines STR will reduce chain scale. If individual hotel s scores drop Brand will remove flag. D. Helps Avoid UnintendedConsequences UDC currently would allow certain low-rated, full-service brands. 18

19 Prioritize certain development sites or zones in district. Recommendation #3 A. Key Sites (e.g. parcels adjacent to 5 major attractions) Luxury or Upper-Upscale Perhaps Minimum Room Count Perhaps Minimum Investment Amount B. Priority Zone (e.g. within 1 block of major attractions or at key highway interchanges) Upscale or higher Extended-stay brands allowed? C. Lower Priority Zone Upper-Midscale allowed? Extended-Stay brands allowed? D. Conversions Are existing hotels allowed to reduce chain scales as they age? Consider certain investment requirements or tax implications. Consider minimum requirements if becoming independent. 19

20 Address outdated service and facility requirements. Recommendation #4 A. Eliminate Service Requirements (or revise) Room service 24-hour Bell service 24-hour Concierge 12-hour B. Eliminate Facility Requirements (or revise) Meeting space Restaurant meals served Restaurant seating Business center keyed-access Pool requirement C. Do Such Requirements Really AddAnything? Current UDC requirements don t directly address policy goals Chain scale requirement would directly address ADR Building materials requirement would address Construction Quality 20

21 Consider requirements for independent hotels. Recommendation #5 A. Probably Rare Desirable brands are available Most investors will prefer national branding Difficult to obtain debt financing B. QualityControl No brand to keep quality control scores No brand to threaten removal of flag No brand to force renovation plans (PIPs) Can be especially vulnerable during recessions Can experience downward QC if CapEx is avoided C. Design and ConstructionQuality Recommend more intensive planning/review process ADR reporting requirement (to allow comparison vs. chain scales) Consider minimum investment per guestroom 21

22 Recommendation #6 Standards for hotel conversion projects. A. Economic Life of Hotels Average about 40 years 20-year franchise agreement 10-year extension of franchise after major CapEX investment (PIP) 10-year license after conversion to lower chain scale Renew with lower chain scale or become independent B. What if Owner Converts Down? Accept this as normal economic trend Consider a CapEx requirement Consider taxing structure that discourages downward conversions (e.g. portion of tax on PAR or POR rather than sales) C. What if Owner Converts to Independent? Do you need to meet requirement for new construction of independent hotels? Perhaps this should trigger a planning/review process. Some markets can become under-demolished Consider policies that encourages demolition / redevelopment 22

23 HA & A Hotel Appraisers & Advisors Hans Detlefsen, MPP, MAI President 111 N Wabash Ave, Suite 1717 Chicago IL Direct +1 (312) Mobile +1 (773) hdetlefsen@hotelappraisers.com 23

24 STR Chain Scales North America andcaribbean Luxury 21cMuseumHotels AKA Andaz Belmond Conrad Dorchester Collection Edition Fairmont FourSeasons GrandHyatt InterContinental JW Marriott Langham Loews Luxury Collection Mandarin Oriental Montage PalaceResorts ParkHyatt Ritz-Carlton RockResorts Rosewood SixtyHotels Sofitel StRegis Taj ThePeninsula Thompson Hotels Trump Hotel Collection Valencia Group Viceroy WHotel WaldorfAstoria Upper Upscale Ace Hotel Affinia Autograph Collection ClubQuarters CurioCollection Delta Dolce EmbassySuites Gaylord HardRock Hilton Hyatt HyattCentric Hyatt Regency JoieDeVivre Kimpton LeMeridien MagnoliaHotel Marriott MarriottConference Center Millennium Omni Outrigger Pan Pacific HotelGroup Pestana Pulman RadissonBlu Renaissanc e Sheraton Starhotels Swissotel TributePortfolio WarwickHotels Westin Wyndham Upscale AC Hotels by Marriott alofthotel Ascend Collection Aston Hotel Best Western Premier CambriaSuites CanadInn CitizenMHotels Club Med Coast Hotels &Resorts USA Courtyard Crowne Plaza DisneyHotels DoubleTree element EVENHotels FourPoints GraduateHotels GrandAmerica Great Wolf Lodge Hilton GardenInn HomewoodSuites HotelIndigo HyattHouse HyattPlace LarkspurLanding LegacyVacationClub Melia MiyakoHotels Novotel NYLO Hotel PrinceHotel Radisson ResidenceInn RoomMate Shell Vacations Club SonestaHotel Springhill Suites Staybridge Suites Stoney Creek Vacation Condosby Outrigger UpperMidscale Ayres AquaHotels Best Western Plus Boarders Inn & Suites Centerstone Hotels ChaseSuites Clarion Cobblestone Comfort Inn ComfortSuites Country Inn &Suites Doubletree Club DruryInn Drury Inn &Suites Drury Plaza Hotel DrurySuites FairfieldInn Golden Tulip HamptonInn Hampton Inn & Suites HolidayInn Holiday Inn Express Home2 Suites byhilton Isle ofcapri Lexington MOXY OHANA OxfordSuites ParkInn PhoenixInn RamadaPlaza RedLionHotels Silver Cloud Sonesta ESSuites Tryp by Wyndham TownePlaceSuites Westmark Wyndham GardenHotel Xanterra Midscale 3Palms Hotels &Resorts AVictoryHotels AmericInn Baymont Inn &Suites Best Western CandlewoodSuites ClubHouse Crossings by GrandStay Crystal Inn FairBridgeInn GrandStay ResidentialSuites HawthornSuites by Wyndham InnSuitesHotel Lakeview DistinctiveHotels La Quinta Inn &Suites MainStay Suites Oak TreeInn QualityInn Ramada Red Lion Inn &Suites SettleInn Shilo Inn SleepInn VagabondInn Vista Wingate bywyndham Yotel Economy AffordableSuites ofamerica America s Best Inn America s Best Value Inn BudgetHost BudgetSuitesofAmerica Budgetel Country HearthInn CrestwoodSuites Crossland Suites Days Inn EconoLodge Extended StayAmerica E-Z8 Family InnsofAmerica Good Nite Inn GuestHouse Inn Home-TowneSuites HowardJohnson InTownSuites JamesonInn KeyWestInn Knights Inn LiteHotels MastersInn Microtel Inn& Suites bywyndham Motel6 National 9 PassportInn Pear Tree Inn Red CarpetInn Red RoofInn RodewayInn SavannahSuites ScottishInn SelectInn Studio 6 Suburban ExtendedStay Sun SuitesHotels Super8 Travelodge ValuePlace WoodSpring Suites Brands/Chains are slotted by Chain Scale based on the previous year s annual system wide (global) Average Daily Rate. Rate ranges defining each Chain Scale are determined by STR. The STR Chain Scales North America and Caribbean is a subsetof the larger Global Chain Scale list. Brand Chain Scale pairings are consistent with each list. Brands listed above are located in U.S., Mexico, Caribbean and Canada. If you have any questions about the Chain Scales, please support@str.com. Copyright STR, Inc. Publishing or reproducing this information is strictly prohibited. +1(615) Last updated May2016.

25 Legend Zone 1 Zone 2 Zone 3 Arlington Municipal Boundary Entertainment District Overlay TAD Parcel Stream Centerline Waterbody DRAFT LAMAR B OW 107TH ST WET N WILD WA Y 30 OPER ST WILDWOO NOLAN RYAN EWY ST360 LENN DR WEB ST PARK ST WOODBROOK ST EDA E RANDOL MILL RD AT&T WAY 106TH ST DR 1 XCHANGE DR COMMERCE DR LL SC R Sources: Tarrant County TAD data (2017), Data & Maps for ArcGIS World, Europe, and United States, NHD Waterbody (as amended), NCTCOG 2009 Planimetrics/stream, City of Arlington - CDP GIS data structure. Current to: 29 August 2017 TRUMAN S N COLLINS ST E SANFORD ST HARRISONAVE ST180 Disclaimer: This data has been compiled by The City of Arlington using various official and unofficial sources. Although every effort was made to ensure the accuracy of this data, no such guarantee is given or implied. DRAFT Entertainment District Parcels By Zone With Aerial 1± Miles