SOUTH BEND, IN—The economy has boosted the hospitality industry, and developers have begun putting up hotels at a brisk pace, even in secondary markets. Hampton Hotels, for example, the global brand with nearly 1,900 mid-priced Hampton Inn, Hampton Inn & Suites, and Hampton by Hilton hotels, just broke ground on the 99-room Hampton Inn and Suites Mishawaka in the South Bend metropolitan area. The four-story hotel will be at 7347 Heritage Square Dr. in Granger and part of the Heritage Square Development, an open-air retail center.

The property is a joint venture between South Bend-based Holladay Properties, which also developed Heritage Square, the owners of the Hilton Garden Inn South Bend /Gillespie Conference Center and Gateway Hospitality Group, which will oversee construction, FFE, pre-opening operations and management.

“Hampton properties are designed to accommodate both business and leisure travelers,” says Bob Voelker, president and CEO of Gateway. The hotel guest rooms will feature complimentary high speed internet, refrigerator, microwave, 42” LCD HDTV with premium channels and Serta Suite Dreams beds. The two-story lobby will have high speed internet, a complimentary business center, an indoor swimming pool and a 675-square-foot Precor certified fitness center. Additionally, the hotel has 500-square-feet of meeting room space.

“A solid, though muted, pace of economic growth will drive improvement in national hotel performance in 2013,” according to a recent Hospitality Research Quarterly Update from Marcus & Millichap. “Nationwide, hotels are riding positive momentum early in the second half of 2013. The outlook for the sector remains upbeat through the second half of the year as the economic momentum, despite hurdles, remains sturdy and development remains contained.”

M&M researchers do worry that developers in some areas, such as hot oil and gas markets, will get carried away and perhaps overbuild. “Outside of a few states and chain scales, however, construction lenders are generally choosing well-sponsored properties and chain scales that meet under-served demand in a market and are forsaking projects where demand does not justify additional supply.”