A LOT OF MONEY IS BEING CHECKED IN TO DENVER HOTELS
Millions of dollars being poured into established Denver hotels amid stiff competition, shifting tastes
An observant visitor to the recently updated Hotel Monaco in downtown Denver might spot a number of subtle touches in its halls and rooms meant as homages to Colorado’s rich natural resources. In the absence of such a keen eye, though, a guided tour sure helps.
On a recent afternoon, the Monaco’s general manager, Sandy Burkett, pointed out several of those touches: a color pallet and carpet and wallpaper patterns that reference the various minerals found beneath the Colorado soil, and hallway lighting fixtures modeled after miners’ lamps.
The details were added as part of a $6 million renovation competed at the hotel in March. All 189 rooms in the former railway exchange building-turned-hotel at 1717 Champa St. were overhauled.
“We gutted it. New carpet, new pad, new furniture,” Burkett said.
The Denver metro area is home to more hotel options than ever. Many of them, like the dazzling ART Hotel on Broadway and chic new Ramble Hotel in nearby Rino compete for the type of experience-driven traveler the nearly 20-year-old Monaco seeks to attract.
Burkett said the renovation was driven by the normal cycle of updating and renewal in the hospitality industry and a commitment to “meeting and exceeding our guests’ expectations.” But the Monaco, managed by San Francisco-based Kimpton Hotels and Restaurants, is hardly the only established hotel in the city that has invested millions in its offerings in recent years.
The nearby Hotel Teatro poured $2.5 million into its 110 rooms in a project that wrapped up in February. The Brown Palace, Denver’s most storied hotel, invested $10.5 million in renovations in 2015. That project concluded within a year of the opening of new downtown competitors like the Crawford Hotel inside Denver Union Station. Texas-based Crescent Real Es-
tate LLC revealed last month it is considering buying the Brown Palace.
Outside the urban core, the Renaissance Denver Stapleton Hotel just announced the completion of a $15 million overhaul of its 400 rooms as well as its meeting spaces, lobby and ballroom. That angular building at 3801 Quebec St., built in 1986, added a new restaurant and bar as part of the project.
Hospitality industry experts say these projects happening in close proximity to one another is no coincidence, and competition is a driver.
The Denver metro area was home to 47,097 hotel rooms at the end of last year, 1,946 more than were available at the end of 2016 and roughly 7,000 more than in 2012, research firm STR wrote in a recent report. Occupancy rates dipped slightly to 73.4 percent in 2017, down from 73.6 percent in 2016, but average nightly room rates and revenues per available room both rose, the report found.
“Denver has been and will continue to add new hotel supply. The great news is that we have been able to absorb this new supply with additional demand,” Richard Scharf, Visit Denver’s president and CEO, said in an email.
“Therefore, to keep pace with this new wave of hotel construction, a hotel has to renovate if it wants to sustain its position in the marketplace. Depending on the age of the facility, this could range from some basic upgrading to a full renovation.”
These renovations don’t come for free. Room rates at the Monaco fluctuate based on market demand, but Burkett said the hotel’s baseline — which she set at $199 — did go up as a result of the renovation. According to STR, an average night at a Denver hotel last year cost $152, up from $117.55 in 2012.
The trend isn’t confined to the high prairie, either. Skyler Mckinley, spokesman for AAA Colorado, said hotels across the country are making upgrades to keep up with the tastes of millennial travelers.
Millenials tend to have more money to spend on travel than preceding generations because many have put off or decided not to have children. They’re not after discount rates or a large corporate hotel experience, Mckinley said. They don’t care if their accommodations have a business center, and they prefer a walk-in shower to a tub. (The Monaco replaced tubs with showers in 141 of its rooms.) So, what are the kinds of hotels they like?
“They’re smaller. They’ve got unique architecture. They’re nestled in the heart of the city and, to that end, that is where we’re seeing a lot of competition,” Mckinley said. “And what’s driving this in our market is this Instagram moment. Is this an Instagramworthy experience? I think travelers now expect that every step of the way is going to be something worth writing home about.”
All hotels nowadays have to contend with home-sharing services like Airbnb and VRBO, Mckinley said, but places in urban Denver like the Monaco and Teatro have some insulation on that front because there isn’t yet a high concentration of housing around them. So they compete with themselves, and high-dollar retouches are en vogue right now.
Fred Kleisner is used to navigating a competitive luxury hotel market. As a regional vice president for Sage Hospitality, he oversees a trio of such places within walking distance of one another in downtown Denver: the Crawford, the Oxford and the Maven Hotel, which opened last year as part of the Dairy Block project in Lodo.
The Oxford, by far the oldest of the three with a history that dates to the 1890s, recently underwent a major renovation project. Kleisner declined to say how much money Sage invested in what he called a “refresh” of the property at 1600 17th St. but said all 80 rooms received close attention, as did other areas of the hotel. Sage made sure to preserve the Oxford’s classic touches, Kleisner said.
There are two major factors that spurred Sage to work on the Oxford, Kleisner said: travelers’ growing preference for unique, experience-driven accommodations, and the big investments other hotel companies and developers are making around town. He referenced the Crawford and the Maven when talking about the latter factor.
“We saw what we were doing and the success we were achieving within those assets. That was part an parcel to saying, ‘It’s now the right time for the Oxford to gain that refresh and take that to the next level,’ ” he said.
As for hotels that haven’t spruced up their spaces and tweaked their guest experience recently, Kleisner has a guess about what their managers and owners are thinking these days.
“If they haven’t started they are probably looking over their shoulders a little bit and seeing they probably need to do something different,” he said.
“Denver has been and will continue to add new hotel supply. The great news is that we have been able to absorb this new supply with additional demand.”
Richard Scharf, Visit Denver’s president and CEO