There always seems to be room for more restaurants and entertainment options in Wichita, but the same probably can’t be said for hotels.
Has the Wichita hotel market reached a saturation point yet?
“That’s always a loaded question,” said hotelier Jim Korroch.
Korroch owns the Fairfield Inn & Suites at WaterWalk and manages the Courtyard Marriott in Old Town, which he also used to own.
He said there’s been “a lot of new, nice product that’s come on the market.”
That includes the new 121-room SpringHill Suites by Marriott Wichita Airport at 6633 W. Kellogg, which is on the east side of Texas Roadhouse. It opened in late January.
However, Korroch said that “the numbers don’t lie.”
“The numbers would say we are saturated.”
A new 107-room extended-stay Home2 Suites by Hilton is slated to be built near 21st and Greenwich this year, but no other major hotels have been announced for 2015.
“Other than that, there are just no other players that I know are coming to the market,” Korroch said.
He said he thinks hotel companies “realized that there are an awful lot of hotels here.”
Nashville-based hospitality research firm STR Inc. tracks 120 Wichita hotels. That equates to about 9,000 rooms and, for 2014, 3.2 million available room nights.
That compares to 3.34 million nights that were available in 2013 and 3.3 million in 2012.
Last year, the industry here sold 1.96 million room nights, which was down from 2013’s 1.98 million room nights – but up from 2012’s 1.95 million room nights.
“You’re still having a lot of people coming, just not as many as before,” said STR’s senior vice president, Jan Freitag.
“The good news is your demand dropped, but the number of rooms available dropped faster,” he said of hotels that have closed. “So the occupancy of the existing properties then mathematically has to go up.”
He said room rates are increasing as well.
In 2012, room rates increased by 2.1 percent over the previous year. In 2013, they increased by 2.13 percent. In 2014, rates increased by 4.1 percent for an average price of $81.50 a night.
“What’s nice to see is that is a much faster pace than in the last two years,” Freitag said.
Nationally, the year-end occupancy for hotels was 64 percent, with room rate growth at almost 5 percent.
Wichita’s year-end occupancy was 60 percent.
“The performance was healthy,” Freitag said. “It’s not as good as the national average.”
He said it could improve, though.
“As the American economy continues to grow, and people continue to travel and group meetings continue to increase, occupancies across the nation and Wichita should increase,” Freitag said. He said that “then should … lead to continued pricing power and increases in average daily rate.”
While that may happen in 2015, it hasn’t started yet.
The year “has been off to a slow start compared to last year,” Korroch said.
He blames it on snowstorms.
“It’s just causing people to not travel,” Korroch said.
He said he’s confident that will turn around with nicer weather.
“I think we’re going to have a rebound effect on that,” Korroch said. He said people “still need to get business done.”
Memphis firm McNeill Commercial Real Estate is planning for future hotel needs with its purchase of 2.5 acres at Slawson Cos.’ Cross Pointe development at the southeast corner of 21st and Greenwich.
The company plans to start construction on its Home2 Suites by Hilton in late spring or early summer.
The hotel, which should be ready in early 2016, will be east of the intersection along 21st Street and just west of K-96.
“K-96 … was very important to McNeill,” said Jerry Jones, a Slawson broker. “That’s kind of becoming a business corridor.”
Jones said the future GoodSports multisport athletic facility, which will target regional and national tournaments, and its entire sports and entertainment district is appealing to McNeill.
He said the hotel makes sense for Cross Pointe, too.
“It does fit in with what we’d like to do at Cross Pointe, which is (a) mixed-use development.”
There’s also a 120-room hotel planned as part of the GoodSports complex where young athletes and their families can stay.
Though there aren’t a lot of hotels opening in Wichita right now, there have been a number that changed hands in the past year.
Connecticut-based Starwood Capital Group, which is related to Starwood Hotels, is part of a group that purchased Korroch’s SpringHill Suites by Marriott and his Residence Inn by Marriott, both of which are at the Plazzio development at 13th and Greenwich.
Also included in the deal was the Hampton Inn & Suites at Regency Lakes at 21st and Greenwich and the Hilton Garden Inn Wichita at Bradley Fair.
“It’s probably one of the biggest transactions the city has seen in a long time,” Korroch said at the time.
He said the sales were in excess of $50 million.
Though the market may have enough hotels at the moment, and Korroch isn’t looking for more, he said that could change.
“I always have my eyes open.”