Market says: more hotels needed

ROOM TO GROW? The Procaccianti Group has said its proposed extended-stay hotel in downtown Providence would be the first hotel construction project in the city in nearly a decade. / RENDERING COURTESY THE PROCACCIANTI GROUP
ROOM TO GROW? The Procaccianti Group has said its proposed extended-stay hotel in downtown Providence would be the first hotel construction project in the city in nearly a decade. / RENDERING COURTESY THE PROCACCIANTI GROUP

Providence has yet to see a building boom, but it is attracting several developers of hotel properties.

The city has about 2,500 hotel rooms, most of them downtown, divided among full-service hotels, boutique hotels and small bed-and-breakfast locations. Potentially, 723 more rooms could be developed in coming years, if proposals made in the past 18 months come to fruition.

The proposals appear to be driven by two trends closely followed by development companies: increasing occupancy rates and rising revenue per room.

In the past 18 months, developers have filed paperwork or told city officials they want to build five more hotels. The proposals are at varying stages of completion, and none have been approved as yet by local authorities.

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The extended-stay hotel seems to be the most common kind of hotel proposal. At this point, downtown Providence does not have any extended-stay hotel properties, a type of accommodation that has become increasingly popular with business travelers, according to Martha Sheridan, president and CEO of the Providence Warwick Convention and Visitors Bureau.

The city has high occupancy rates, of 90 percent or more, during events such as college graduation weekends and conferences that draw attendees who want to be able to walk to events and offerings. But in addition, overall occupancy rates and revenue per room are rising.

In July, compared to July 2014, hotel occupancy in Providence rose from 69 percent to 70.7 percent.

Average daily rates, meanwhile, also rose, from $143.21 in July 2014 to $150.71 in June, according to data from Smith Travel Research.

Revenue per room, a function of rate and occupancy levels, rose from $98.82 in 2014 to $106.61 this year.

Developers look at data such as this and make determinations to enter a market when it appears more hotel rooms are needed. “The market will determine which properties will be the most viable and which will get the financing,” Sheridan said.

Providence now has 11 hotels, the two largest being the Omni Providence Hotel, which has 564 guest rooms, and the Providence Marriott Downtown, with 351 rooms. Two boutique hotels, including the Hotel Providence and the Dean Hotel, have fewer than 100 rooms.

Five more hotels have been proposed for Providence:

n The large biosciences and mixed-use development proposed for two parcels of the former Interstate 195 land would include a Starwood-branded hotel, containing 175 rooms, according to a recent presentation by CV Properties LLC of Boston, and Wexford Science & Technology of Baltimore, the companies partnering in the proposed development. The project has yet to be submitted in full to the I-195 Redevelopment District Commission, which has authority over the use of the land.

n In addition, The Procaccianti Group, with headquarters in Cranston, has proposed razing of the Fogarty Building on Fountain Street downtown, to be replaced with a 168-room extended stay hotel. The project came before the City Council’s Finance Committee in July for a public hearing but no vote was taken. The next meeting is in September.

n West X Capital LLC in 2014 sought approval for a 17-story apartment building and hotel, to include 136 hotel rooms, at a property at 210 West Exchange St. in Federal Hill, now home to a two-story industrial building. In December 2014, city officials objected to the height of the project, however, and the status of the development proposal is not clear.

n First Bristol Corp. of Fall River has proposed construction of an eight-story hotel, featuring 120 guest suites under the Homewood Suites brand, on property downtown next to the U.S. Post Office. The site, called the “triangle” lot, is defined by Memorial Boulevard, Exchange Street and Exchange Terrace and is leased from the Providence Redevelopment Authority.

n Another extended-stay hotel, with 123 rooms, is proposed for Corliss Street in the city’s north end. The project is before the city’s Zoning Board of Appeals.

In describing its hotel project at the council’s Finance Committee, a representative of The Procaccianti Group said the extended-stay hotel would be the first hotel construction project in nearly a decade. The project would replace the Fogarty Building, constructed in 1968 and vacant for the past several years, with an eight-floor Residence Inn by Marriott.

The project could employ 200 construction workers. •

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