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Attractions, strong convention industry help fuel surge in new hotels, renovations

Atlanta Journal-Constitution - December 21, 2007 - by Kevin Duffy Staff Writer

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Intown Atlanta is seeing a spike in hotel construction, conversions and upgrades to suit changing traveler tastes and serve Atlanta's growing tourism trade.

A dozen projects are under construction or have been announced, with completion dates no later than 2010.

The last big hotel surge was just before the 1996 Olympics. After that, economic woes and the terrorist attacks of 2001 put the brakes on a lot of development, including lodging.

Why the latest ramp-up?

"First and foremost, the level of gross development in downtown and Midtown Atlanta," said R. Mark Woodworth, president of PKF Hospitality Research in Atlanta. "Development that generates demand for hotel space has been very, very remarkable."

That includes the Georgia Aquarium, which opened two years ago, and the new World of Coke, which opened in May and expects 800,000 visitors by year's end.

The aquarium has set up special deals with 18 hotels to serve tourists. On average, more than 6,800 people visit the attraction each day.

"We know they have sold tens of thousands of rooms as part of aquarium packages," said Dave Santucci, the aquarium's director of public relations.

Koert van Ittersum, assistant professor of marketing at Georgia Tech, said Atlanta hotels are benefiting from a change in business and sports travel habits.

"Five years ago, they'd leave after a game," van Ittersum said of sports fans. "But because of what the city now has to offer, some of them might decide to bring their families" and stay longer.

Paul Breslin, managing partner of the hotel development company Panther Hospitality, said "the most exciting news for Atlanta is the leisure aspect. We didn't have the sex appeal of an Orlando or Vegas, so we were a harder sell."

Breslin pointed to the proposed Center for Civil and Human Rights downtown as further evidence Atlanta's tourism appeal is likely to grow.

Meanwhile, business travel to downtown shows no signs of slacking off. The mammoth AmericasMart is adding another 1.5 million square feet to bring in more wholesalers of home furnishings, gifts and apparel. AmericasMart now attracts 568,000 visitors a year.

Attendance at the Georgia World Congress Center, the fourth-largest convention venue in America, was 56 percent higher in fiscal year 2007 than in fiscal year 2002. "There's a healthy demand for hotel rooms, and we believe that's due in part to the city's healthy convention industry," GWCC spokeswoman Katy Pando said.

Atlanta has approximately 92,000 hotel and motel rooms. The recently opened and soon-to-open projects intown represent about a 3.5 percent increase.

Breslin said there's always a danger too many hotel rooms will come online at once, but that doesn't seem to be the case.

"The percentage of growth will outpace the percentage of supply," he said. Still, developers are "hedging that things will continue to do well," Breslin added.

All the new activity is expanding choices.

Several projects are marketing themselves as boutique hotels offering intimate spaces and more personalized service.

"The baby boomers are looking for something sexy to stay in, and they have the money to spend," said R.C. Patel, who's turning a vacant office building downtown into Hotel Indigo. Indigo is next to another boutique hotel, the Ellis, which opened in October.

"More and more consumers are seeking out smaller, more focused hotels that are perhaps more oriented to satisfying the needs of the individual traveler rather than large groups," Woodworth said. "They're not trying to be all things to all people." Another recent product is the luxury hotel topped by swanky condos.

About half of the new intown projects are of that type. High-profit condos help justify new hotel construction, Woodworth said. "The condo buyer will pay 20-40 percent more for that unit" in order to have access to luxury hotel services, he said.

For other projects, it makes more sense to renovate rather than build anew. The new W hotels in Midtown and Buckhead will be conversions of other brands.

The Marriott Marquis downtown is undergoing a $140 million renovation that's expected to be completed late next year.

Seven other intown hotels are spending a total of $58.1 million on makeovers, according to the Atlanta Convention & Visitors Bureau.

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