The hotels, which execs are hoping to open by 2009, will add about 1,800 rooms to the current market. Byron Koste, director of the University of Colorado Real Estate Center in Boulder, thinks that the market could become overbuilt. "Yes, the economy is getting slightly better and we are creating some new jobs," Koste says. "But we just opened a new 1,100-room hotel to accommodate some of the demand."
Koste says he would like to see "more sanity" in the market. "But this is America," he tells GlobeSt.com, "and any developer who can get a hotel financed has the right to build one."
Bob Benton, of Robert S. Benton & Associates, says the consumer and business traveler will be the beneficiaries of the current building, as the supply will result in at least a temporary dip in what had been raising occupancy rates and hotel room rates. However, he is optimistic that the market will be able to absorb the additional rooms over a long-term period.
John A. Montgomery, another hotel consultant who is principal of Horwath Horizon Hospitality Consulting/Montgomery and Associates, also is optimistic of long-term opportunities. He notes that the hotels moving forward are serving different market niches. And, most importantly, they're not all coming all online at once, which will give the market the time to absorb the rooms.
John Desmond, vice president of urban planning and environment for the Downtown Denver Partnership, tells GlobeSt.com that this is the first time Downtown has ever been able to handle a hotel building boom of this magnitude. "Twenty years ago, Downtown was a much different place," Desmond tells GlobeSt.com. At that time, Downtown was dominated by the office market and as a place of commerce. Now, it not only is a place to do business, but it has vibrant restaurant, entertainment, and housing components, he says. Hotel developers are taking note of this and want to capitalize on the strength of the market, he tells GlobeSt.com.
Tami Door, the president and CEO of the partnership, also is enthusiastic about the interest in downtown from hotel developers and companies. "A lot of really smart businessmen and businesswomen are looking at Downtown for hotels," Door tells GlobeSt.com. "You can bet they're doing their homework."
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