Multimillion dollar hotel projects offer visitors more getaway choices
The Tri-Cities will add more than 300 hotel rooms to the market when multiple hotels open in the next year.
And more rooms will be available in 2021 and beyond, with other hotel projects currently in the planning stages.
The opening of three hotels with a combined value of $21.5 million will increase the number of available rooms to 4,285 this year and 4,506 in 2020.
Today, there are 4,191 hotel rooms in the Tri-Cities.
Five years ago, there were 3,361 hotel rooms. Since then, Home2 Suites opened in the Queensgate Drive area of Richland, Hampton Inn & Suites opened in west Pasco and SpringHill Suites welcomed guests next door to the Three Rivers Convention Center in Kennewick.
In this competitive field, existing hotels are working hard to attract guests by renovating their properties and changing their names.
“The addition of more hotels in the Tri-Cities is a wonderful thing for visitors as they have more choices from nationally recognized brands,” said Michael Novakovich, president and chief executive officer of Visit Tri-Cities. “It also shows that investors continue to view the Tri-Cities as a viable market for new hotel investments. The Tri-Cities has experienced a 10 percent growth in the number of rooms sold over the past five years. Year to date, our market is performing slightly above last year. However, occupancies are still considered healthy.”
Every overnight stay contributed to the overall $87 million spent on all accommodations in the Tri-Cities in 2018, according to Visit Tri-Cities.
Hotel stays equal tax dollars
Every room added to the Tri-Cities brings the possibility of additional revenue, as each of the three cities collect a 4 percent tax on stays, with half of the money restricted to promote tourism or expenditures related to operating tourism facilities.
In 2014, Richland collected about $825,000 through lodging taxes, Kennewick about $900,000 and Pasco, which has fewer large hotels, about $500,000.
In 2018, those numbers rose to just under $1.2 million for Richland, $1.1 million for Kennewick and $684,000 for Pasco.
Through September, Richland has collected $891,000 in taxes for stays, Kennewick $858,000 and Pasco $469,000. Kennewick has allotted some of its tax dollars toward debt service and operating subsidy of the Toyota Center and Arena.
Residence Inn in works
A prominent hotel ownership group has announced plans for a new hotel across the street from Columbia Center mall in Kennewick. Ignite Hotels LLC will build a $20 million Residence Inn by Marriott on South Quinault Avenue.
The president of the hospitality group also owns the Red Lion Hotel Richland, commonly called the Hanford House, both Kennewick Red Lion properties and the Hampton Inn in Kennewick.
Ignite president Gurbir Sandhu said the property will be four to five stories, with about 90 rooms intended for extended stays. Design work is not yet finalized.
Construction is expected to begin in spring 2020, with the hotel opening by fall 2021.
Sandhu said he’s excited about bringing an upscale extended-stay hotel to the heart of the Tri-Cities. It will be the third Residence Inn in Eastern Washington, with the other two in Spokane’s east valley and Pullman.
Sandhu also intends to switch brands for two of his properties—the Red Lion Inn near the Toyota Center and the Red Lion Hotel Richland.
The Richland property will become a Holiday Inn. It will be a full-service property, ideal for catering, conferences and banquets, and provide more options than the “select” service options currently available in the market.
“Spokane has been stealing a lot of our convention business,” Sandhu said.
He hopes the upgrade of the rooms and banquet facilities will draw new business to the property.
The rebranding and upgrades will begin in November and should be completed by the end of April. The property will be renamed the Holiday Inn Richland Riverfront at that time.
Sandhu also intends to rebrand the Red Lion Inn & Suites at 602 N. Young St. in Kennewick. The approval is in place to turn the hotel into a Best Western property, but there is no timeline for the change.
Sandhu said it is important to be a part of one of the five nationwide hotel chains because consumers want to stay where they have hotel reward membership. These main hotel brands are Hilton, Marriott, Best Western, IHG and Choice Hotels International. Holiday Inn is owned by IHG.
More hotels coming
Choice Hotels International is the parent company of the WoodSpring Suites, set to make its debut in the Tri-City market next year, opening more than a year later than originally anticipated. The $6.7 million project at 1370 Tapteal Drive, near the Richland Kohl’s store, will have 122 rooms.
At the time it was first announced, the company said it was still working through construction financing. The brand is considered basic economy for extended-stay hotels and competes with MyPlace and Extended Stay America.
The hotel is being developed by West77 Partners, a real estate investment company based in Bellevue.
A Comfort Suites is set to open later this year near the Hampton Inn at 3703 Plaza Way in the Southridge area of Kennewick.
The $6.3 million project is scheduled to open before the end of the year with 94 new rooms across four stories. The project is being undertaken by Southridge Investments following a $1.1 million purchase of the land in 2016.
Across the river, an even larger project is underway near the Tri-Cities Airport at 2101 W. Argent Road in Pasco. The $8.5 million hotel will be a Courtyard by Marriott with 99 new hotel rooms. It’s expected to open in the first quarter of 2020.
The land is owned by the Port of Pasco, which signed a deal with A-1 Hospitality Group for a 50-year lease on the ground with a 25-year renewal. That lease includes a yearly sum of either $28,000, or 1.25 percent of the hotel’s gross revenue, whichever is higher.
A-1 is a heavyweight in the local hotel ownership scene, building the Holiday Inn Express and Suites in west Pasco, Fairfield Inn by Marriott in Kennewick and the SpringHill Suites in Kennewick.
Following success with the property at the convention center, the A-1 group worked out a public-private deal with the city of Kennewick to expand the convention center by adding another hotel, a theater and the potential for more. It’s looking at a massive $50 million investment for its portion of the plan.
Kennewick will hold a second open house on the $85 million project from 4:30-6:30 p.m. Oct. 17 at the Three Rivers Convention Center, 7106 W. Grandridge Blvd.
The purchase and sales agreement between the city and A-1 covers 3.56 acres for a $50 million seven-story hotel connected to an expanded convention center. Multiple previous efforts to pay for expansions at the convention center have failed.
The project would include a $35 million investment from the city to fund the expansion of the convention center and add a performing arts theater with seating for 2,000. The city has said this project aligns with its vision for the entertainment district and area near the former Vista Field.
The agreement also gave the city the option to buy the adjacent property for a future phase that could include “residential, commercial, and public spaces with water features and boardwalk,” likely to be condominiums, restaurants and parking.
Kennewick estimates the first phase of the project will include $1 million collected in a one-time local sales tax and $105,000 collected yearly from the new hotel, thanks to the tax added to hotel stays.
In the race to attract more guests, other hotels in the area have remodeled, rebranded or renamed their properties to attract more overnight stays.
The waterfront Shilo Inn at 50 Comstock St. in Richland is now advertised as the Richland Riverfront Hotel, with a new sign and nearly $150,000 in improvements, including a remodel of the lobby, bar, breakfast area and conference rooms. The hotel said the name change will be official at the end of October.
A name change also came to the former M Hotel at 1515 George Washington Way, which underwent a complete overhaul of both the interior and exterior that lasted more than a year before it debuted as a Best Western Plus property.