Chandler making room for hotels - East Valley Tribune: Business

Chandler making room for hotels

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Posted: Sunday, March 26, 2006 5:44 am | Updated: 5:48 pm, Tue Jun 11, 2013.

Five hotels are proposed for Chandler that could add about 1,000 rooms in the next couple of years, boosting the city’s capacity to host visitors by more than 50 percent.

All are full-service hotels, meaning they have a restaurant and other amenities.

One is under construction. Three are in various stages of the zoning approval process. One has approved zoning but not much else, including a design or detailed site plan.

Four of them are clustered within a stone’s throw of Loop 101 and Frye Road. The fifth is less than two miles away.

Not all of them are likely to be built, said Jan Freitag, director of Smith Travel Research. Smith Travel is a Tennessee-based research firm that compiles and analyzes statistics for the U.S. lodging industry.

“The attrition rate (for proposed hotels) is about 75 percent for those that don’t (have detailed plans), and about 50 percent for those that don’t have zoning,” he said. “The one under construction is 95 percent likely to be completed.”

Statistically, only about half the rooms proposed for Chandler are likely to become reality. But the city’s dearth of fullservice hotels, a national tourism industry on the mend after an economic downturn, and an upcoming Valley Super Bowl could boost the odds.

More than a decade ago, when plans were announced for Super Bowl XXX in Tempe on the heels of a college gridiron championship, hotel building surged Valleywide.

Chandler’s possible 1,000 new guest rooms, if built, would boost the Valley’s inventory by about 2 percent. The current Valleywide hotel room count is approximately 52,000.

But Chandler isn’t the only city with plans. Phoenix is funding a single downtown hotel with as many rooms as all five of Chandler’s proposed properties combined.

Industry leaders aren’t worried, said Debbie Johnson, president of the Valley Hotel & Resort Association. A new expanded convention center, scheduled to be completed in 2009, is expected to boost overall visitors to the metro area by at least that much, she said.

Besides, a few hotels have recently closed, and at least one, the Radisson Resort Scottsdale, will be rebuilt as condos, she said. Others, such as Mountain Shadows in Paradise Valley, will have fewer hotel rooms than the originals when they reopen.

Experience shows new full-service properties add business, Johnson said. A much-feared late 2002 addition of 2,200 new resort rooms brought more new business to the Valley than the new properties stole from the existing hotels, she said.

TOURISM KICK-START

A batch of new hotels would give a huge kick-start to Chandler’s goal of developing a thriving tourism trade. Tourism is a highly desired industry because it is considered “clean” — it doesn’t belch smoke into the air like some manufacturing operations — and it generates taxes that are paid by visitors instead of residents.

Besides any shopping, dining or other taxable expenditures visitors make while in Chandler, they pay an extra 4.4 percent in bed tax to the city, said Pat Walker, Chandler management services director. All of that goes into the city coffers, and most of it is used to benefit local residents in keeping streets, parks and other amenities in good shape. About 0.9 percent, sometimes a little more, is used by the city for tourism promotion, Walker said.

For Chandler’s neighbors, such as Mesa and Tempe, a new batch of Chandler hotels could make a short-term dent in their own visitor trade. Even Chandler’s existing hotels might have to fight for business.

“If they all get built, it will put temporary pressure on hotels that exist now,” Johnson said.

But that’s a short-term concern, Johnson said. Typically, a rash of new hotels causes older properties to update and innovate to stay competitive. And that boosts image — and business — for the whole destination. Like the Westin Kierland Resort, new to the Valley in 2002, new brands tend to attract visitors who might not have come to the destination at all, Johnson said.

One of the planned Chandler hotels is pegged to be a Renaissance ClubSport, a new Marriott brand aimed toward the health-minded business or leisure traveler.

A Renaissance ClubSport hotel stay includes full use of an adjacent fitness center.

Developer Jeff Cline said his 243-room hotel and limited-membership fitness center under construction at Loop 101 and Frye Road, south of Chandler Fashion Center, is expected to be branded a Renaissance Club-Sport when it is completed in 2007. Renaissance ClubSport officials would not confirm that a deal for the brand is in place. But local tourism leaders like the prospect.

Marriott introduced plans for the chain just a few years ago, and if Cline’s hotel is branded a Renaissance Club-Sport, it will be among the first few built.

“It has been so hyped. People will want to see that,” Johnson said.

CHASING BRANDS

Chandler officials are equally excited about the prospect of landing other hotel brands not new to the Valley, but new to Chandler, said Harry Paxton, economic development specialist.

People who travel often have brand favorites. Valley visitors who stay only at a Hilton or Embassy Suites have snubbed Chandler to stay in neighboring cities, Paxton said. Two of the proposed hotel projects boast those brands. Another adds a second Marriott to Chandler’s roster. Paxton said all three hotel names are tourist favorites.

And frequent travelers are willing to commute a few extra miles to earn brand reward points, said Kimberly Janes, the city’s tourism marketing coordinator.

Chandler has 19 hotels with more than 1,800 rooms, Janes said. Only four of those — including the venerable San Marcos, Chandler’s only resort — are full-service hotels. And only about 700 rooms are in full-service properties.

Industry analysts define a full-service hotel as one that has a restaurant and room service, Freitag said.

Full-service hotels also typically have large meeting rooms and banquet facilities, where companies can stage business conferences. And they lend more prestige to a destination for those shopping for a place to vacation. “We’ve tried to lure fullservice hotels,” Paxton said. “We see it as part of our development process. We’re happy with the ones we have, but we need to expand the variety.”

BOOSTING BUSINESS

While Chandler faces a daunting task catching up to Scottsdale, Phoenix or Tempe in attracting those just looking for a sunny spot for a getaway, the city’s signature businesses, especially international tech giant Intel, are a huge draw for out-of-towners, Janes said.

The city hopes to parlay that into a vacation trade, she said. Chandler is a household name among business leaders, who might bring the family along on a business trip, she said. And if a business trip and a stay in a Chandler hotel is a hit, it can lead to more visits just for fun, she said.

“It’s not that we are an unknown. There are (major) corporate offices here,” Janes said. The announcement last year about plans for a new Intel chip-making plant, now under construction, prompted a flurry of requests for information about Chandler and places to stay in the city, she said.

Now, the city is conducting a research study, “to help us to recognize how to position Chandler for visitors,” Janes said. Once the optimum approach is determined, Janes said Chandler will launch an aggressive marketing plan. The city already has the demographics — upper income households, upscale shopping, fine restaurants — to rival tourist favorite Scottsdale, she said.

“Those things that make Chandler a great place to live, make it a great place to visit, too,” Janes said.

But she doesn’t see Chandler’s tourism strategy as a race to catch up with Scottsdale. “As the city grows, you look for ways to diversify the economy. Chandler started as an agricultural community. You can’t compare it (to Scottsdale).”

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