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Wave of hotel development adds 3,000 new rooms

The tuxedo-clad gentleman from Monopoly, with his top hat and white mustache, would be jumping for joy over how many new hotels are going up and old hotels are undergoing renovation throughout Buffalo Niagara.

But is it sustainable?

From bare-bones basics and airport convenience to suites and luxury-level high-rises, developers and hotel operators have offered a host of new options for business travelers and tourists.

More than three dozen new hotels are under construction or planned, adding over 3,000 rooms from Niagara Falls to Jamestown, with a heavy concentration in downtown Buffalo, according to data from Tennessee-based travel and hospitality research firm STR Inc. That’s nearly a 20 percent increase in room count in just a few years.

Some, like the Westin Buffalo, are completely new. Others have turned old industrial or office buildings into hotels.

The projects haven’t just increased the supply of rooms; they’ve also raised the bar on quality, forcing older hotels to keep up. The Hyatt Regency Buffalo, for example, recently completed renovations that expanded its spa, upgraded suites and added a Starbucks and is now planning to bring in national high-end steakhouse chain Morton’s to replace E.B. Green’s.

The glass atrium on the Main Street side of the Hyatt Regency Buffalo. (Derek Gee/Buffalo News)

There are still several more hotels on the way, including Mark Croce’s Curtiss Hotel, Hotel Henry at the Richardson Olmsted Complex and the redesigned Residence Inn on Delaware Avenue.

The number of projects across the region has raised questions about whether the market will soon be overbuilt, especially since many of the new hotels have gone up at the same time, likely based on prior feasibility studies.

So far, hotel owners say that has not been a problem.

That’s because the variety of new hotels bring a broader diversity of options, brands, service and amenities to what tourism officials describe as a growing marketplace. The region has also benefiting from hundreds of millions of dollars in private- and public-sector investment, from HarborCenter and Canalside to the Buffalo Niagara Medical Campus and Niagara Falls, said Patrick Kaler, CEO of Visit Buffalo Niagara.

“We’re on such a great momentum with the overall changes that are taking place in Buffalo,” Kaler said. “A lot of these hotels are coming on board because of the other investment taking place in and around Erie County. Our overall product is changing.”

Key measures of the hotel industry show the market has remained steady, with room to grow. Data from STR show average annual hotel occupancy rates in the Buffalo-Niagara Falls market have hovered between 62 percent to 65 percent for the past six years, with a high of 85 percent to 88 percent in the summer. Room revenues, meanwhile, have risen since 2010, from $56 to $67, despite an increase of 2,000 rooms over that time period.

At the end of 2016, according to other STR data supplied by Visit Buffalo Niagara, the supply of rooms in downtown Buffalo was up 5.5 percent, while consumer demand was up 5.7 percent.

Downtown hotel occupancy stood at 67.4 percent for the year – higher than the national average of 65.5 percent.

“We’re creating the supply to meet the demand,” Kaler said. “There are some destinations that would kill for that, so we are really in a great position as far as our overall occupancy.”

The Curtiss Hotel is slated to open in April. (Robert Kirkham/Buffalo News)

The average daily room rate in Buffalo was up 4.2 percent.

Still, the larger market may suffer somewhat, at least in the short term, said Robert Bowers Jr., senior vice president of operations for STR. As the region’s supply has grown faster than the demand, he noted, room rates have slowed their growth compared to prior years.

“You’ve got more rooms to fill and not enough demand to fill them at the same rate as you have in the past,” Bowers said.

Here’s a look at some of the newest projects.

Westin Buffalo: Constructed by Uniland Development Co. and operated by Delaware North, the Westin Buffalo is one of the newest and highest-end entries to the downtown hotel stock.

[Gallery: Westin hotel opens in downtown Buffalo]

The 119-room hotel occupies five floors of the $110 million, 12-story hotel and office tower at 250 Delaware Ave., now known as the Delaware North Building. It features a first-floor lobby, a restaurant operated by the Patina Restaurant Group, a two-level fitness center, meeting space and four levels of rooms and larger suites, along with access to other retail space on the ground level at Chippewa Street.

Marriott Buffalo HarborCenter: The Marriott Buffalo HarborCenter opened in 2015 as a major part of Terry and Kim Pegula’s $200 million sports and entertainment center across from KeyBank Center. Operated by Shaner Group, it’s designed to cater not only to tourists and business travelers, but also to visiting sports teams, professional athletes and fans coming to KeyBank Center, HarborCenter or Canalside.

The 12-story hotel tower, which sits above two levels of ice rinks and five levels of parking, offers 205 rooms with panoramic views. Its seventh-floor lobby level includes the Panorama on Seven restaurant and meeting space. 716 Food & Sport restaurant and Tim Hortons Cafe & Bake Shop are on the ground floor.

Panorama On Seven is on the seventh floor of the HarborCenter Marriott. (Sharon Cantillon/Buffalo News)

Courtyard by Marriott Canalside: Across the street from HarborCenter, the Courtyard by Marriott Canalside opened in May 2014 as part of Benderson Development’s $30 million redevelopment of the former Donovan State Office building. The 96-room hotel occupies the lower four floors of the building, while Phillips Lytle takes up the top four levels.

The Courtyard includes a lobby and cafe, as well as a Pizza Plant. The building also includes a 130-vehicle parking ramp, and an outside patio and plaza level with steps down to Metro Rail trains and the canals.

Hilton Garden Inn: Hamister Group’s $42 million redevelopment of the former Tishman Building into the new 10 Lafayette includes a 124-room Hilton Garden Inn, occupying the first 14 floors of the 20-story tower.

Located on Lafayette Square, the hotel opened in fall 2014 and includes suites and standard rooms, a lobby bar, a full-service restaurant and 3,800 square feet of meeting space. The rest of the building includes 18 market-rate apartments on the 15th through 17th floors and Hamister’s corporate offices.

Embassy Suites: The Embassy Suites in Uniland Development Co.’s Avant Building was the first of the new hotels in Buffalo, having opened in 2009. Its success set the tone for future growth by demonstrating the need and value of additional hotel space in the city.

The hotel, located on the first seven floors of the former Dulski Federal Office Building, has 153 rooms and a lobby-level steakhouse restaurant called SEAR. The 432,000-square-foot building, which Uniland spent $85 million to redevelop, also has four floors of office space and 28 upscale condominiums on the top three floors.

Hotel Henry: Hotel Henry is one of two upscale city hotels slated to open in the coming months. The new “urban resort” hotel and conference center is scheduled to open April 1 at 444 Forest Ave., with 88 boutique rooms and 20,000 square feet of meeting space.

[Gallery: Richardson Olmsted Complex and the Hotel Henry]

The $70 million facility, part of the larger redevelopment of the 180,000-square-foot Richardson Olmsted Complex, will be operated by InnVest Lodging Services, which also owns and runs The Mansion on Delaware Avenue.

[Gallery: The Mansion on Delaware Avenue]

The new north entrance to the Richardson Olmsted Complex. (Derek Gee/Buffalo News)

The Curtiss: The boutique Curtiss Hotel is also under construction. Located in Buffalo's historic Curtiss Building at 204-216 Franklin St., the $24 million project by Mark Croce will introduce an independent hotel to the downtown mix, featuring 68 elaborately designed rooms with high-end amenities.

[Gallery: The Curtiss Hotel]

The 57,000-square-foot former office building will also include a full-service fine-dining restaurant called Chez Ami and a revolving bar that rotates twice an hour. There will also be a spa with a Roman bath, a rooftop patio, a fitness center, and a boutique men's hair and nail salon and massage rooms run by Leon Studio One.

Wyndham Hotel: The planned 300-room hotel is slated to dominate the redevelopment of the former AM&A Department Store by a Chinese investment group from Queens. There will also be a pair of restaurants, a basement pool and spa, a 10-story atrium, and retail space, as well as six apartments on the top for hotel management.

The owners had to first spend $12 million on an environmental cleanup in the 10-story building at 377 Main St., which has been vacant for years and suffered water damage. The project has been targeted for completion by the end of 2017.

500 Pearl: Ellicott Development unveiled plans this year for a 12-story, mixed-use complex at 500 Pearl St., which will incorporate the Buffalo Christian Center building, a parking lot and the former site of the Bachelor Building.

The $75 million project calls for a three-story hotel of 109 to 112 rooms. It will also include a six-level parking ramp, 28 apartments, office space and ground-floor retail.

Trico Building: Krog Corp. is still pursuing its proposal to overhaul and restore the Trico Products Corp. warehouse at 817 Washington St. into a mixed-use building on the edge of the Buffalo Niagara Medical Campus. But first it has to complete its purchase of the site.

The Orchard Park developer wants to put in a 138-room, extended-stay hotel run by Hart Hotels, along with up to 150 apartments and parking.

Others: Benderson is converting its 167-room former Holiday Inn Delaware Avenue at 618 Delaware Ave. into a 105-room extended-stay Residence Inn. Visions Hotels converted its Comfort Suites Downtown, with 146 rooms and a TGI Fridays restaurant, into a Holiday Inn Express & Suites.

In the suburbs, Ellicott Development opened its Wyndham Garden Inn at The Mosey on Main Street in the Village of Williamsville, and Iskalo Development Co. built the Hyatt Place Suites on the other side of the Youngmann Expressway. The new Reikart House will soon be open at that same site, replacing the old Lord Amherst Motel.

Several new hotels have opened or are in the works near the Buffalo Niagara International Airport and Walden Galleria in Cheektowaga, as well as near University at Buffalo’s North Campus in Amherst.

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