No room for more inns?
Questions emerge on Bricktown hotel building spree
The once-booming hotel market in Bricktown is showing signs of hitting turbulence as a handful of previously announced developments are being put on hold or are going through a monthslong delay.
The slowdown, however, is being countered by the construction of four budget hotels just outside of Bricktown along Reno Avenue east of Interstate 235. And a newcomer to the Oklahoma market, Drury Hotels, bought a surface parking lot last week on Oklahoma Avenue for $4.5 million.
The Drury property is across the street from another parking lot purchased by Tulsa hotelier Andy Patel with intentions of building a full-service hotel. He initially indicated construction was set to start on his planned 10-story, 182room Renaissance Hotel last year, but the latest report is work won’t start for another few months.
Champ Patel, who spent millions buying and clearing a 4.8-acre site at 100 Charlie Christian Avenue, was planning to start work on three hotels. A building permit for the first of the three hotels, a nine-story Canopy by Hilton, was issued by the city in late 2017.
More site clearance followed, but in recent months work has ceased. The company confirmed to The Oklahoman the three hotels are on hold while work continues on renovating the former Marriott in northwest Oklahoma City. Once that project is done, company officials say they will take a wait-and-see approach in measuring the impact of rapid hotel growth in Bricktown.
The experience of Patel’s Champion Hotels, one of the state’s largest and most respected hotel operators, may be a caution flag. Mike Carrier, president of the Oklahoma City Convention and Visitors Bureau, has spent the past few years tracking hotel development in downtown and Bricktown as it has grown to more than 3,000 rooms.
“What all of these people are seeing is a major increase in supply,” Carrier said. “Our supply has gone up in downtown this last year by 15.7 percent. Overall for the city, that number is up by 6 percent.”
The good news, Carrier said, is that demand is up by 12.6 percent and holding steady. And revenues are up more than 10 percent. But room rates are dropping. And a low unemployment rate is complicating efforts to adequately staff hotels.
“We’re seeing positive things happening overall,” Carrier said. “But we’re seeing signs downtown is overbuilt in terms of limited service select service. The continued rumors about more hotels is scary. Remember, the Omni is a done deal. First National and its hotel is progressing. They’re still a couple of years out. But that will bring us 750 new first-class, full-service rooms with aggressive sales efforts.”