As construction continues at break neck speed in Music City, hotel projects are right in the thick of it between the impressive number of planned and under construction projects. Continuing the Market Update Series, this week we will explore “the Big Kahunas”. Each of these properties have over 450 rooms and have either been completed in the last 9 months or are under construction. It should be noted that there are a few more in the pipeline that are in final planning or have announced but the focus is on those projects that are actually under construction. Additionally, the properties in this focus are all within close proximity to the Music City Center, which opened in May, 2013. The hotels below are listed in order of their opening.
Market Update: The Nashville Hotel Market – Part Two
The Westin (807 Clark Street)
First on the scene, opening in October, 2016 is the Westin Hotel. This 454 room property has already seen success. With the ever increasing number of conventions hitting the Music City Center as well as an international presence on the GDS and through international sales offices, the Westin started out of the gate with a strong occupancy and ADR. At the same time, the rooftop bar, L27, one of the few high-rise bars in the city, has become a local hotspot, often with lines of guests waiting to get in. The property is owned by Castlerock Asset Management who is currently in the middle of construction of the Bobby Hotel on 4th Avenue North. The highlights include:
- 454 guestrooms
- 20,000 square feet of event and meeting space
- The lobby level Decker & Dyer restaurant and lounge serving breakfast, lunch and dinner.
- The L27 rooftop lounge and pool with skyline views of Music City
- Coming Soon: The Oak Steakhouse, by the Indigo Road Hospitality group.
- A 9 treatment room spa
JW Marriott (201 8th Avenue South)
Next to open will be the 533 room JW Marriott, slated to open in July of 2018. Already with a reputation around the world of offer luxurious accommodations mixed with exquisite service, this project between local developer, Mark Bloom and Turnberry, is Music City Center adjacent property. It will also be close to the 100th opening for the rapidly growing luxury brand. The property will have sweeping skyline views of downtown Nashville with lush furnishings and design. The highlights include:
- 533 guestrooms
- 50,000 square feet of meeting space
- Bourbon Steak, a Michael Mina restaurant with a rooftop patio
- An additional restaurant offering breakfast lunch and dinner
- A Starbucks
- A fitness center and JW Spa
- An outdoor swimming pool
Tri-branded Marriott property of AC/Springhill Suites/ Residence Inn (410 5th Avenue South).
The first of its kind, this triple-brand Marriott hotel will combine a full service brand with two limited service hotels. It should be noted that Marriott already has over 50 dual branded properties with another 90 approved for construction. The developer for this project is North Point Hospitality out of Atlanta. The draw for multi-brand properties is that guests of each brand may enjoy the amenities of the other hotels while staying under one roof. The highlights include:
- 470 guestrooms split between three Marriott brands. According to Marriott International, the AC hotel, which is a lifestyle brand property will have 209 design-focused guest rooms and suite, the Springhill Suites will have 125 suites and the Residence Inn will have 136 suites.
- A large pool
- State of the Art fitness center
- Six food & beverage outlets, some at street level creating enhanced offerings for foot traffic in the area.
- A rooftop bar & patio located on the 21st floor
- 3,675 square feet in meeting space
These hotels announced and began construction long before the explosion of construction in Music City. Between these three properties examined in this blog there is a total of 1,457 guestrooms. This is included in the mix of approximately 3,500 hotel rooms that are under construction in the city meaning these properties represent 41.5% of the inventory that is under construction in the city. The questions for many in the industry still remain:
- What will these new hotels bring to Nashville?
- Will there be enough business to sustain the continued growth?
For the first question, in doing a reasonable calculation of what would be considered “normal” performance levels, it would appear that these hotels have the potential to increase occupancy tax collections in Davidson County by 10% overall. This will create the opportunity to increase programing for the city as well as promote the brand to more visitors throughout the world. Additionally, the visitors for these hotels will spend money with other services in the city like restaurants, bars, boutiques, etc.
The answer to the second question, which is generally asked by established hotels in the market, is a bit more cloudy. It is helpful to consider that, according to the Nashville CVC, for 2017, the convention center, which these hotels all anchor, roomnights are flat to 2017, while the city is up year over year. Though 2018 still has some opportunities to fill, bookings are ahead of pace and is positioned better than 2017. Additionally, 2019 is looking stronger than 2018. Just in time for these properties, and many others, open. So, if these trends continue, in a normal economic environment, the city should continue to see reasonable levels of RevPAR growth in the existing properties as well healthy business for the new properties.
Finally, to say there are a lot of hotels coming online in Nashville would be an understatement. There are several that are under construction with even more being talked about, like the over 500 room Hyatt that is being planned just a few blocks away from the Music City Center. In a future post, we will explore the ever expanding amount of limited service properties slated for Music City as well as the new district – Boutique Row.