It’s been nearly four years in the making, but Williamsville developer Paul B. Iskalo is looking forward to seeing his new hotel in business this summer – more than a year later than originally planned after a bruising battle with neighbors.
Iskalo Development’s new 137-room Hyatt Place Hotel is slated to open its doors by late June or July, welcoming its first guests to what was a rear parking lot behind the now-gutted Lord Amherst Hotel, overlooking the I-290 at Main Street.
It will join a crowded field of new hotels entering the market – from the outer ring suburbs to Buffalo’s downtown core – that have some questioning if the region is reaching the saturation point for new rooms. Erie County now has 111 hotels, an increase of 18 since 2008.
And more are planned.
As many as 30 new hotels and more than 2,500 hotel rooms are coming online, according to research firm STR Inc., including the new Buffalo Marriott HarborCenter and the Westin Hotel at 250 Delaware Ave. That’s after the region already expanded its hotel market from 9,068 rooms to 11,685 since 2008.
Meanwhile, revenue per room grew less than 1 percent in Erie County last year, compared to more than 8 percent nationally, and Erie County’s average rate of just under $100 is well below the nation at $115, according to data from STR and Visit Buffalo Niagara.
“Where are all the people coming from, the visitors?” asked David Hart, CEO of Buffalo-based Hart Hotels. “I’m totally skeptical, especially because Canadian business is so fleeting that it’s like a water faucet. You could turn it off in an instant. I am absolutely concerned.”
But industry consultant David J. Sangree, president of Cleveland-based Hotel & Leisure Advisors, said every market in the country is seeing increased hotel development because lenders finally opened up the spigots for hospitality projects after the recession. The region’s hotels posted an overall occupancy of 64 percent last year, according to STR. That is above the threshold developers want, said Sangree.
Local tourism officials welcome the new hotel construction.
“We do have all these new hotels that are looking at Buffalo and considering Buffalo as a destination to add more rooms to our inventory,” said Patrick Kaler, CEO of VBN. “These hotel corporations aren’t just going to build hotels for the sake of building hotels. They look at our business climate, what has taken place here, and they make informed decisions.”
He cited STR data showing higher occupancy and average room rates for the region in March, with the rate rising from $92.97 in January to $98.90, even though the winter months are normally slow. And while the supply of rooms rose 3.7 percent in the past year, demand was up 5.3 percent.
“We’re seeing great opportunity,” he said. “We’re seeing people that are wanting to come and book here and it’s pacing very well with the new hotel rooms coming up ... We see great things coming for the future.”
And while he acknowledged that VBN faces a challenge in the future as the organization seeks to bring more business to the region, it’s already booking events into 2017, 2018 and 2019, and “we’re pacing ahead of where we’re supposed to be.”
“This is a destination in transformation, and we’re getting great pickup with travel writers writing about us,” he said. “We’re getting great exposure.”
For Iskalo, the need for more rooms is apparent. The company is building what it calls a “hospitality campus” at the Main Street site.
The new hotel is aimed at a blend of business and leisure travelers, with a design fresh off the corporate drawing board, but with investments to add to energy efficiency, provide more guest comfort and try to ensure the building fits with the historic feel of the Williamsville and Snyder areas. It features a pool and spa, a fitness center and 1,800-square-feet of meeting space that can be subdivided into three rooms. And it is part of a larger complex that will include a renovated second hotel and restaurant – the former Lord Amherst and the former Sonoma Grille.
“This particular location doesn’t have just one business driver,” Iskalo said. “So we think it was a natural to put a hotel here.”
The $18 million, six-story hotel represents the first incarnation of the Hyatt Place brand in the Buffalo Niagara market.
Iskalo hopes to appeal to multiple tourist and corporate markets with a central location – just up Main Street from Daemen College and University at Buffalo’s South Campus and with easy highway access to downtown Buffalo, shopping or other destinations. Room rates will range as high as $209 for peak summer months, and will vary depending on the purpose or customer. But the average daily rate for this year will be about $136. The hotel is now taking reservations as of Aug. 5.
“We’re doing well. We’ve been pretty pleased with the response to date,” Iskalo said.
Iskalo acquired the Lord Amherst property nearly four years ago from the Genrich family, who built the 95-room hotel more than 55 years ago. It had fallen on hard times, with little reinvestment, but Iskalo proposed a complete renovation and a separate new hotel behind it, citing the value of the location. Indeed, rival Ellicott Development Co. also initially tried to buy it, but lost out and instead bought the former Stereo Advantage property later that same month, on the edge of the Village of Williamsville, where it built the Wyndham Garden Hotel and Residences at the Mosey.
Both projects ran into stiff opposition from neighbors, who objected to their height and scale, which they said was out of place with the surrounding buildings and homes. The residents behind the Lord Amherst property were particularly upset about the Hyatt’s impact on their Livingston Parkway neighborhood, which was tucked away from Main Street and surrounded a small private pond.
Amherst officials eventually gave approval to both – including tax breaks – although the fights prompted the Town Board to change some of the regulations for future projects. But while Ellicott’s project moved ahead, Iskalo’s effort languished when residents filed three lawsuits and mounted a public relations campaign against it.
The last legal hurdle was removed in February 2014, allowing full construction to restart. More than a year later, the building is fully enclosed and about 80 percent to 85 percent done, with contractors now turning attention to finishing drywall, painting, carpeting, tiles, furniture and landscaping, said Iskalo project manager William Clark.
More to come
Meanwhile, new hotels and proposals continue to pop up throughout the area. Benderson Development Co.’s Buffalo Lodging just opened its Home2 Suites in Cheektowaga, near Walden Galleria, as well as several new hotels near the Buffalo Niagara International Airport. Uniland Development Co. recently announced plans for a new hotel at its University Corporate Centre office park on Maple Road. Downtown, construction continues on the HarborCenter Marriott and the Westin. Those follow the opening of the new Embassy Suites and Courtyard by Marriott, as well as boutique hotels like the Hotel @ the Lafayette and the Foundry Suites on Elmwood Avenue near Hertel Avenue. And others are ongoing or planned in Niagara Falls.
Ellicott CEO William Paladino said his company, which owns nine hotels in the Northtowns and Southtowns, hasn’t seen any impact so far on its business. “I’m sure at some point we may, but to what extent I’m not sure,” he said. “We think we have very good locations, very good markets. We think we have a nice product and we manage the hotels very well.”
But the developer is putting on hold plans for more hotels in the suburbs until officials see how the market performs. The company also wants to do a new flagship downtown hotel on one of three unspecified sites.
“The question is where are we going to do it, and when are we going to start?” he said.