La Quinta

A crew removes debris at the former site of a La Quinta Inn near Baylor that is being replaced with another La Quinta across the interstate. The Waco area’s hotel occupancy rate is the second highest in the state, beaten only by the Austin-Round Rock area.

Staff photo — Jerry Larson

The Baptist General Convention of Texas left Waco this week after a three-day convention that put the squeeze on local lodging establishments and had local officials giving thanks that hundreds of new hotel rooms will hit the market the next two years, so many that one hotelier wondered if Waco is getting overbuilt.

But Greater Waco needs all the new hotels on the drawing board and under construction to handle larger conventions and to provide quality accommodations for the abundance of visitors bound for Magnolia Market at the Silos, a revitalized downtown or Baylor University events, said Carla Pendergraft, marketing director for the Waco Convention Center.

“We have 4,000 hotel rooms, but of those, only 2,000 are what I would describe as of the quality demanded by corporate groups. And only 800 to 1,000 are blockable, meaning management is willing to set aside sizable blocks of rooms for use by conventioneers,” Pendergraft said.

She welcomes news that Greater Waco is experiencing a building boom of hotels that will only get louder in 2018 and 2019. But most proposed hotels will have only slightly more than 100 rooms apiece, whereas she longs for 250- to 300-room full-service hotels, she said.

Pendergraft also said the glut of lodging development isn’t likely to harm the local hotel occupancy rate of 75.5 percent. Waco’s occupancy rate is second-highest in the state behind only the Austin-Round Rock score of fractionally above 76 percent.

“We have about the same number of hotel rooms we had when I arrived in 1990,” Pendergraft said. “We aren’t going up nearly as much as some believe.”

Clarion Inn, Holiday Inn, Best Western Old Main Lodge and La Quinta Inn near Baylor have fallen to the wrecking ball recently.

A 117-room La Quinta del Sol in the works near South 10th Street and Interstate 35, a project of hotelier Raju Patel, will replace the La Quinta Inn.

Patel said he hopes to open the new hotel in October or November next year. He also owns Candlewood Suites on New Road and the La Quinta property on U.S. Highway 84.

The Waco market “is approaching getting too many hotels at the same time,” Patel said. “One new one a year is good, but several are in the works. Occupancy is going to suffer.”

Lynn Dowdle, a Dallas-based real estate agent bringing a Choice hotel to Bagby Avenue at Central Texas Marketplace, said she believes the Waco market is just hitting its stride.

“In recent years, Waco has seen significant growth and building momentum in the area of economic development,” Dowdle said in an email response to questions. “The city of Waco is taking many important steps in order to foster economic growth in the city and surrounding region, transforming Waco into an increasingly attractive destination for new businesses, tourists and workers looking to relocate.”

Next to La Quinta del Sol, at 905 S. 11th St., a relatively new hospitality concept branded The Aloft will take shape. The city of Waco is reviewing plans for the 117-room project, inspection supervisor Bobby Horner said.

Horner said developers also have submitted plans for a 125-room Springhill Suites on Jack Kultgen Expressway near University Parks Drive.

“We’re about to get on a big hotel run in Waco,” he said.

Meanwhile, real estate agent Bland Cromwell, a commercial specialist, said he’s working with a prospect interested in building yet another hotel near La Quinta del Sol and The Aloft, and others are interested in Waco.

“I know of at least three different groups looking at various locations, and these are not projects that have been announced,” Cromwell said. “Property is getting expensive. Prices are going up, but these lodging chains are still interested and they know what they are doing. They are not going to get into an overbuilt situation. In fact, I have clients in town all the time who say our hotel rooms are full.”

Also, next to Central Texas Marketplace, Mississippi-based Heritage hospitality plans to start work by January on a four-story 98-room Tru by Hilton and a four-story 105-room Residence Inn and have them open by January 2019, Heritage vice president of hospitality Ali Bhatti said.

Waco-based Lalani Lodging has placed hotels in Georgetown, Wichita Falls and Waco, and is going up with a Homewood Suites by Hilton in the Legends Crossing development at West Loop 340 and I-35.

“Waco, like the state of Texas in general, is certainly seeing a rise in supply,” spokesman Kari Lalani said via email. “I believe for developers and operators that focus on the niche product like select service and extended stay, they will continue to operate at strong occupancies.

“In general, as a hotel developer or operator, I would be wary of a full service product in this market, as I don’t believe the economics bear out. All things being equal, in this market, full service hotels command the same rate as any upscale product in the select service space, yet carry two to three times the overhead.”

Lalani said he does not believe Baylor football games or conventions, including the Baptist General Convention of Texas’ annual meeting, place undue stress on the local hotel market.

Still, Pendergraft laments the one that got away. She said high school technology students from around the state have gathered in Waco for 40-plus years, but their 3,000-person convention has been forced to look elsewhere because of a lack of hotel space to set aside.

“Hotels can charge higher rates to transient traffic, so most will not offer more than 30-room blocks,” she said. ‘They are being good stewards of the property, but that is not helping convention business.”

If the new hotels can offer bigger blocks, that will help, “but we won’t know that until they open,” Pendergraft said. “I just know for sure it hurts to lose a longtime customer.”

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