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Developers remain buoyant over potential downtown

Rochester Business Journal
July 27, 2012

Despite the prospect of nearly 1,600 hotel rooms stretching from Rochester's convention district to the East End, local developers remain confident that the lodging they are revamping will have solid occupancy year-round.
 
Nightly rates, amenities and atmosphere will be differentiation points among the competitors, developers say. Some hospitality experts, however, say getting optimal occupancy will not necessarily be a slam dunk.
 
"Hopefully, there will be enough (occupancy) for everybody," says David Crumb, associate professor in the hospitality and tourism management department at Rochester Institute of Technology's School of International Hospitality and Service Innovation. "And certainly the hotels that are going to build here must have done some good marketing (research) to make that commitment, because building a hotel is a very expensive process."
 
The question of whether the city of Rochester needs more hotel rooms bubbles up every four or five years, Crumb says. Renovations under way at 384 East Avenue Inn & Suites and at the Strathallan Hotel on East Avenue, as well as a $15 million Hilton Garden Inn proposed for East Main Street, have raised the issue once again.
 
"I've been in the Rochester area since 1981, and it always appears that we have more rooms than the demand calls for," Crumb says. "However, somehow the demand catches up over time."
 
The $16 million Hilton Garden Inn project, which will receive tax breaks from the County of Monroe Industrial Development Agency, would turn three vacant buildings on a half-acre parcel into a 115,000-square-foot, 106-room hotel next to the Hyatt Regency Rochester.
 
The city's hotel operators should not fret about the number of available rooms because upstate's tourism economy has been strong in the past year, says Jeanne Fagan, professor of business administration at Finger Lakes Community College. Rochester is ideal for affordable weekend getaways, she adds.
 
Local attractions, not hotel rooms, cause visitors to come here, says Fagan, who oversees FLCC's two-year tourism management degree.
 
Summer tourism, in particular, has gained traction here and statewide in recent years, Crumb says. The Xerox Rochester International Jazz Festival and area sporting events are among various offerings boosting occupancy.
 
Still, when occupancy is below 75 percent, "everybody is kind of scrambling to get a piece of that business," says Crumb, former general manager of the Rochester Airport Marriott.
 
He adds: "As long as business is brisk in the corporate market and the convention business is going and tourism is going, everybody is happy. But when one of those three things falls or is not in shape, then it's difficult."
 
John Billone Jr., developer of 384 East Avenue Inn & Suites, says he is keeping an eye on the competition, but "for me, it was really about location and the amount of entertainment and cultural venues really outside our door."
 
Faith in the city's upswing also prompted Billone to enter the hotel market for the first time, he says.
 
Renovation of 24 suites and 34 rooms at the 58,000-square-foot hotel, at East Avenue and Alexander Street, is now complete. Work on the remaining 60 rooms will begin this fall.
 
Renovation of the hotel lobby, fitness area, breakfast area and multiple lounges is nearly finished, says Billone, president of Rochester-based Flower City Management & Development.
 
Billone's plans call for two or three commercial tenants to occupy a 10,000-foot-square building on the property. Ideally, they could include a bar or cafe or a full-service restaurant, he says.
 
"I'm really working hard at getting a mix," Billone says.
 
He has decided not to flag the hotel, which was once known as the Treadway Inn. Instead, Billone says, "'stay where you play' is really our (branding) focus so that people know that we are at the heart of the entertainment district."
 
Other touches will help establish the hotel's identity, he says. Local fine-arts photographer Henry Avignon is providing his work for the rooms, and Boulder Coffee Co., which operates five locations in the city, is supplying the coffee.
 
Green lodging practices also will be a priority, Billone says. Flower City Management's corporate headquarters on Alexander Street, known as the Medical Arts Building, has Leadership in Energy and Environmental Design certification from the U.S. Green Building Council.
 
Nightly rates at 384 East Avenue Inn & Suites will range from $109 for a standard room to $189 for a suite, not including any discounts such as corporate rates.
 
Slated to reopen in September under Hilton Hotels' DoubleTree flag, the Strathallan plans to embrace its East Avenue location, says Barbara Purvis, president of Essex Hotel Management LLC. The Chili-based firm will manage the 155-room hotel and has provided repositioning guidance, interior-design assistance and renovation oversight for the project.
 
"I think the Strathallan is going to offer both a boutique experience but also the benefits of being associated with one of the lodging industry's giants (including Hilton's guest-loyalty program)," Purvis says.
 
Plans for the hotel, which has been closed during gutting and renovation since February, include adding suites and a conference center to the ninth floor, as well as various outdoor patios and a park area to the East Avenue lawn. The hotel also will have a full-service restaurant as it has in the past, though the third-party operator has not yet been disclosed.
 
Nightly rates at the hotel will range from roughly $189 to $229, depending on the room, season, day of the week and other factors, Purvis says.
 
Essex and the two other companies involved in the hotel's revival, Morgan Management LLC and Christa Development Corp., are all locally owned and have deep roots in the community, she notes.
 
Refurbishment plans also are percolating in the downtown convention district, which has the lion's share of available rooms in the city.
 
Earlier this month, the Rochester Plaza Hotel & Conference Center announced that its renovation will begin in August and carry over into next year. Room upgrades will include furniture, carpet, wall coverings and the addition of flat-screen TVs, lighting and new bathroom decor. Plans also call for revamping the lobby and grand ballroom.
 
The 362-room hotel on State Street, which anchors the city center's lodging options along with the 460-room Radisson Hotel Rochester Riverside at 120 E. Main St. and the 338-room Hyatt Regency Rochester at 125 E. Main St., last underwent renovation in 2008.
 
Those three hotels and the Rochester Riverside Convention Center's facilities draw large conferences here, but the city often faces stiff competition from Buffalo, Albany and New York City to land them, Crumb says. He expects that the Strathallan and 384 East Avenue Inn & Suites will sometimes attract an overflow of conference attendees.
 
"But what about the times when there are no conventions in town? Then it's very difficult for everybody," Crumb says.
 
On the plus side, the hotel industry is on the rise nationally, and "even though gas prices are up, people are still traveling this summer," Crumb says.
 
Fagan does not believe that 1,600 rooms in the convention district and the East End will saturate the market, though the economic downturn continues to curb convention traffic somewhat.
 
"But Rochester is a great convention city because it's affordable," she says.
 
Rochester already embodies what tourism professionals call the hub-and-spokes model, meaning guests have the option to stay at a hotel in the city and easily explore the outer reaches of the Finger Lakes, Fagan says.
 
That represents a major advantage, "especially if we're going to draw visitors from farther away," she says.
 
Sheila Livadas is a Rochester-area freelance writer.7/27/12 (c) 2012 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or email service@rbj.net.


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