Making rooms to grow

Hoteliers read cities like tea leaves. And in the Central Mass. area, the leaves tell them this: New hotels here make for a wise investment.

The market for hotel rooms in Worcester and Metrowest should get a significant jolt this year from the opening of three new hotels and the re-branding of two others.

While some say the region needs to get more aggressive in marketing its advantages and attracting tourists, all seem confident in the potential profits on their hotels. And for the communities they serve, hotels can have a multiplier effect: More rooms increase the potential for drawing larger conventions, which in turn fills beds, parking lots, conference rooms and restaurant booths.

The renovations and new construction continue a trend started several years ago with the opening of four new hotels in Auburn, another in Devens, and the re-branding of hotels in Westboro, Milford and Northboro. As more developers and more hotels enter the fray, pessimists worry that the increased supply of rooms brings with it the possibility of a rate war. The new hotels, some worry, come amidst a half-decade long trend of falling occupancy and room rates in the Worcester area.

But optimists counter that stagnant occupancy and room rates are deceiving because in that time the area has added nearly 800 rooms. They also see strength in numbers. The millions being invested in hotels can be a growth trigger for the entire region, they say. And when it gets moving, they can ride its coattails.

Developers: Under-served

Worcester market

Although it surely offers its share of interesting attractions, Worcester is not known as a major tourist spot. Yet by the fall, the city will have 321 more hotel rooms than it did on New Year’s Day. Those new rooms — two hotels’ worth — bring the city two steps closer to what the local lodging industry hopes can give it a better chance in competing for convention and corporate dollars.

The first step came on Feb. 15, when N.H.-based Colwen Management LLC opened its Residence Inn by Marriott on Plantation Street. The 122-room hotel comprises studio, one- and two-bedroom suites, all of which have living room space and kitchenettes.

The hotel hopes to cater to extended stay guests — typically those staying longer than four nights — although

that doesn’t mean they won’t accept regular overnight guests, says Diana Casavecchia, the hotel’s sales manager.

"It’s a great location and there isn’t another extended stay hotel here in Worcester," she says.

Extended stay hotels have become one of the fastest growing sectors of the hotel market, says Arthur Canter, president and CEO of the Massachusetts Lodging Association. It’s part of a movement within the industry to better compete for clientele with needs for medium-term living space, such as people moving between jobs, those waiting for permanent housing or business people on long-term assignments.

Colwen is no stranger to the Central Mass. market, having helped to develop the Courtyard Marriott on Grove Street, as well managing another Residence Inn in Franklin.

The city’s second major hotel addition comes later this fall when Monarch Enterprises of Springfield opens a 199-room Hilton Garden Inn next to the downtown convention center. The full-service hotel includes a Pizzeria Uno, and developers plan to connect it to the DCU Center via a pedestrian skybridge.

"There’s a lot of signals that Worcester is a happening place at this point," says Daniel F. Walsh, vice president of Monarch. Among the factors that prompted his firm to build, Walsh cites a feasibility study that identified the city’s 13 universities, the development of a new courthouse and planned redevelopment of the Worcester Common Fashion Outlets. "All those things put together say this would be a good project for us," he says.

In Metrowest, hotels expect a solid rebound

Marlboro boasts more hotel rooms than any community in the state outside of Cambridge and Boston. That record will still hold true later this year when a Residence Inn opens in Marlboro on Donald Lynch Blvd. Two other area stalwarts, The Radisson Hotel in Marlboro and the Wyndham Westboro, are set to get facelifts when they are re-branded later this year. All three owners say the supply in Metrowest is by no means overstocked and that hotels can expect business to pick up from corporate clients looking for space.

The 112-room Residence Inn sits right next door to the New England Sports Center, a five-rink hockey stadium that draws weekend league players from all over the region.

"Hopefully it will be ready by mid-June," says Jonathan W. Mehlmann, general manager.

True North Hotel Group in Overland Park, KS is developing the project. The company owns a number of hotels in the area, including the Residence Inn in Westford and the recently opened Spring Hill Suites in Devens, in addition to its numerous holdings in the Midwest.

Between corporate clients bringing trainees to town and hockey teams looking for a place to hang out between games, there is a strong market for extended stay hotels, Mehlmann says. And the Residence Inn’s modern looking, oversized rooms are more conducive to the homey atmosphere that long-term guests look for.

It’s not the only hotel looking to enhance its status and attract corporate business. The Radisson Hotel in Marlboro is in the midst of an $8 million conversion into a Courtyard Marriott. FFC Capital Corporation in Pittsburgh, owners of the Courtyard Marriott in neighboring Westboro, bought the hotel last August.

The Radisson is being gutted and remade in the trademark Courtyard footprint, which architecturally emphasizes the lobby’s different areas for business and private sitting. When it’s done, says General Manager Mary L. Simone, the hotel will have 202 rooms. It will officially become a Courtyard Marriott on Sept. 1.

The location of the hotel is a big reason for the re-branding. Like Worcester, Marlboro makes a perfect hub for business travelers who need a central base to access the region, observes Simone.

Simone, who also served as chairman of the tourism committee for the Corridor Nine Chamber of Commerce, says most of the travelers in Marlboro and Metrowest are on business. But the region also draws a number of tourists, especially on weekends, adds Dominique Marty, general manager of the Wyndham Westborough, which will switch its affiliation to the Doubletree brand of hotels by the end of this month.

By then, all of its 223 rooms will have been redone, along with the hotel’s 12,000 square feet of meeting space. More renovations — including all new furniture, a lobby reconfiguration and updated exterior — will take place by the fall.

The hotel, along with a portfolio of 25 others, was sold last year to an investment fund managed by Goldman Sachs for $366 million.

Marty said the owners of the hotel felt that the Doubletree brand (part of the Hilton family of hotels) was a good fit because it allowed operators to take advantage of the chain’s client database, as well as allow customers to redeem points through the hotel’s rewards program.

"The bad days are behind us," Marty says of the downturn that rocked the industry from 2001 through 2003 in the wake of 9/11. "I can tell you there has been a good improvement in the outlook of our business. We are starting to see encouraging returns in the business, and I think ownership is making sure the product is fit to deliver to the guests. They want to make sure they remain competitive."

Marty adds that his hotel has a substantial amount of corporate business from nearby companies like National Grid, EMC and Genzyme.

Hubs and spokes

Whether new or refurbished, the name of the game for area hotels is heads in beds. To get them filled, Central Mass. needs to figure out a way of attracting customers from each of the three main groups of clients hotels serve.

The first group, says Arthur Canter, president of the Massachusetts Lodging Industry, are the traditional tourists, drawn to an area for its attractions, countryside or nightlife. The second are corporate customers who use hotels as makeshift meeting or training facilities during the day and frequently to house trainees, clients or others for a short time. The last are conventioneers who stay in hotels while attending events.

"In most cases, one doesn’t think of leisure travelers staying in those hotels," Canter says. "A market like Boston, which has a very good mix of convention, leisure and corporate business, has a much better base." If one or two of those markets slump, Boston at least has other sectors, he says.

As for Central Mass., the area has traditionally drawn a healthy amount of corporate business at its hotels. However, the region faces problems attracting other client groups, says Mark Waxler, general manager of the Beechwood Hotel in Worcester.

"The biggest advantage we have is that we’re an hour from everything," he says. "But our biggest problem is that we’re an hour from everything."

With each major New England city roughly an hour away, conventioneers and tourists are disinclined to stay in Central Mass. because they can drive in and out easily.

Donna J. McCabe, head of the Central Massachusetts Convention and Visitors Bureau, says the Worcester area’s best bet is to market its "hub and spoke" location: Since everything is an hour away, Worcester is the ideal place for tourists looking to explore New England.

McCabe sees an attractive market for tour group operators offering bus tours to newly-retired baby-boomers who hop from Boston to Central Mass. and on to the Berkshires, spending money all the way.

Susanne Morreale-Leeber, head of the Marlboro Regional Chamber of Commerce, says the hub and spoke location of Metrowest — and the number of companies with significant operations there — are the biggest reasons why so many hotels have sprung up in Marlboro, Westboro and Framingham.

"Our accessibility to the highway is perfect. You have easy access to Route 9, the Mass Pike and (interstates) 290 and 495. That’s a big advantage," she says.

And in Worcester, especially with a new convention center-attached hotel, there is a possibility for new convention business that Worcester was unable to vie for previously, says McCabe.

"When we are looking for conventions, they ask questions like ‘How many hotels do you have within walking distance of the facility?’ and ‘is the hotel attached to the convention center?’" she says. "This will give us the chance to get pieces of business we didn’t get in the past."

So as hotels are drawn to the downtown for the potential convention business, planners hope more people are drawn to downtown hotels.

But are there too many rooms? Says Walsh: "We wouldn’t have built if we thought it was going to be overcrowded with hotels. We think the area is ready to accept the 199-room Hilton Garden Inn."

Kenneth J. St. Onge can be reached at kstonge@wbjournal.com