The Booming Hotel Industry

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Perhaps one of the most scenic views of downtown Greenville is at the highest point while driving over the Church Street Bridge. Erwin Penland, City Hall, the Westin Poinsett and the rest of the familiar skyline comes into view and the recent additions that have been made. Large construction cranes and the skeletons of construction in progress look to add more to that beautiful skyline. And if you were to point at any one of them today, the chances would be high that you would be pointing to a future hotel development.

Current Market

At this point, it’s hard to go anywhere within the city—and county—of Greenville and not be able to find a good hotel. Downtown itself has five hotels—the Hyatt, Westin Poinsett, Courtyard Marriott, Holiday Inn Express and the Hampton Inn. All are on—or within a block of—Main Street and cover from Elford Street all the way to the West End.

“These hotels are doing extremely well; the room rates are extremely healthy, especially in May when we have so many things going on,” says Mary Douglas Hirsch, downtown manager for the City of Greenville.

According to Hirsch, Greenville’s turnaround, specifically in downtown, is linked to the hotels, with the Hyatt kicking it off in 1982. When the Westin Poinsett reopened it’s doors in 2000, it was clear what was happening.

“We look at that as the turning point in downtown’s revitalization because that brought a lot of people who were on the fence about whether downtown could come back,” says Hirsch.

According to VisitGreenvilleSC.com, the room rates for 2015—as of June—averaged $93 per room, per night. Back in 2004, they averaged $59. The growth is a clear sign of the market not only growing, but also increasing in quality.

Downtown isn’t the only area of growth either. Other hotspots include Travelers Rest, Haywood Road, Roper Mountain Road, Woodruff Road and Fountain Inn—each seeing healthy growth as the region becomes home to not only more and more business but also leisure travelers.

#YeahThatGreenville

“The leisure business is what has been tremendous over the past few years,” says Ryan Herron, the director of sales and marketing at the Hyatt Regency Greenville.

According to Herron, on weekends in which they didn’t have a big convention, he says it used to be pretty easy to predict what kind of numbers they would have. However, he notes, now it’s not uncommon to have an influx of 50 to 100 extra guests, all who are coming to the Upstate as a weekend trip.

So, how did Greenville become a travel destination that is rivaling some of the coastal destinations of South Carolina in occupancy and leisure travel?

While VisitGreenvilleSC as an entity has been around awhile, (previously under the nomenclature of the Greenville Convention and Visitor’s Bureau), a recent campaign launched in 2012 called “Yeah, That Greenville,” has shown a significant impact on bringing leisure travelers to the city and county.

“Our civic leaders built an amazing place and they built it for their residents, not necessarily just to draw in tourists,” says Jennifer Stilwell, the chief marketing officer of VisitGreenvilleSC. “We have a product that people can enjoy—theatre, art, parks, attractions, restaurants…you just have to go out and tell the story.”

According to Stilwell, the rename has been a huge success, and she has the numbers back it up. Occupancy across the county is up in 2015—so far—to 73 percent, which is greatly improved from the 61 percent of 2011.

To put that into a larger perspective, in 2014, Greenville boasted a 70 percent occupancy rate, with the state of South Carolina at 61 percent, the Southeastern region at 63 percent and finally the United States at 64 percent.

“The talent and creativity with the ‘Yeah That Greenville’ campaign has received national attention,” says Fabian Unterzaucher, the general manager of the Westin Poinsett. “It is encouraging to to see that the money is being put to good use and tells the success story of Greenville in a manner we have never had before. After all, this city’s transformation has been spectacular and you want to share it with the world.”

Growth

Between the City, the County and Municipalities of Greenville, there are 8,300 hotel rooms spread over 81 hotels as of 2014 and it is growing. New developments pop up not only in the downtown area but in each of the surrounding hotspots; still, it all traces back to downtown, due to a compression effect.

“If I can’t get a room downtown on the weekends, I go to the next circle,” says Stilwell, “[This growth] is positively affecting hotels all over Greenville County.”

According to VisitGreenvilleSC.com, in 2014, downtown itself took up 918 rooms of the 8,300, equaling to 335,070 rooms per year to fill. The recent constructions under way will add another 144 rooms by the end of 2015 when Aloft goes online, then in 2016 another 273 thanks to Home2 Suites and Embassy Suites and finally, in 2017, another 414 will be added with the AC Hotel development (a new-to-the-Upstate Marriott brand) at the Greenville News site.

This would bring the total to 1,749 rooms per day and 638,385 rooms on a yearly basis that need to be sold.

Along with VisitGreenvilleSC, the city is fully supporting the developments. By forging public/private partnerships to get projects done such as place making—parks, benches, sculptures, etc.—and by addressing challenges of parking and sewer infrastructure, the city is doing all it can to encourage the growth, according to Hirsch.

Future

At first glance, that growth is a good thing. As long as downtown grows and attracts not only leisure travel but also residents who live in downtown and businesses, retail shops and restaurants continue to flourish, and people will continue to come.

“We’ve had this slow and steady growth over a 30-year period,” says Hirsch, “As long as you are active with interesting things, people will seek you out.”

While most projections show a healthy market through 2017, many are cautiously optimistic about the future. (“Let me grab my crystal ball and take a look,” says Herron, with a laugh.)

Unterzaucher, who has been the general manager of the Westin Poinsett for 11 years, is a veteran of the market and advises caution because of the cyclical nature of economies and when the market softens, there will be a lot of inventory to sell and fill.

“I am always a believer in steady but reasonable growth,” says Unterzaucher.

According to Unterzaucher, the market needs more demand drivers in place to go along with the growth.

“Demand is currently steady but, as we know, everything is cyclical. Greenville, despite being attractive, is not creating this much new demand that would warrant several hundred new rooms every year,” says Unterzaucher.

The Convention Question

Currently the city of Greenville has the TD Convention Center, an obvious attraction for those looking to the area for large gatherings and events.

“It started out as a textile hall that the city rescued from bankruptcy,” says Hirsch.

According to Hirsch, Greenville is now at the place that it is competing for conferences because of the lack of a central, downtown convention center, because travelers stay in one place and often have to budget for additional transportation.

Thus, the question of a downtown convention center and its necessity comes up again and again.

So, an outside advisor has been brought in to take a hard look at the market and examine every aspect that would go into the project.

“That report should be in by the end of this year, it will be a very honest look at our market and, should [a new convention center] be downtown,” says Hirsch.

According to Unterzaucher, a downtown convention center would have a significant impact on downtown itself.

“We need to be aware that we want to preserve Greenville’s style of living that we enjoy,” he says.

Traffic, parking and more construction would only be some of the changes to downtown due to the increase of activity from the convention center.

According to Hirsch, it would have to really blend into the fabric of downtown, be mixed use and walkable.

Many of the hotels agree.

“A lot of work needs to go into what makes sense,”
says Herron. For Unterzaucher, preservation of what the area already boasts is key.

“There is an overall consensus that whatever we decide to do, it needs to be considerate and not damaging to what makes Greenville so spectacular,” he says.

Meanwhile, In Spartanburg

Up Interstate 85, Spartanburg has been experiencing its own downtown growth.

Since 2013, 56 new businesses opened their doors bringing in over 500 jobs and $80 million invested into the downtown area itself.

“The city is working with property owners, local developers and meeting with developers outside of the area to market properties and development opportunities. They see Spartanburg as a vibrant community to invest and just in the past month four significant buildings have sold and three more are under contract,” says Patty Bock, the economic development director for the City of Spartanburg.

In addition, the city invested $2.3 million into streetscape improvements for walkways, streetlights, outdoor seating and bike paths.

“Things necessary for people to come downtown to live, work and play,” says Bock.

And when it comes to hotels, the Downtown Spartanburg Marriott and attached conference center holds the only position in that downtown market. The conference center itself can accommodate upwards of 1,000 guests with plenty of overflow parking.

It won’t be long, though, before another hotel will enter the market, in another AC Hotel.

“The market is demanding more beds and heads in the downtown and we don’t have other hotels in the downtown, so the AC Hotel by Marriott, with 110 plus rooms, brings needed diversity in a new brand,” says Bock. “Those guests will stay for a variety of reasons and they will eat, shop, and stay busy in our downtown, whether here for business or pleasure.”

The city is looking forward to having another hotel and instead of a market shake up, they are referring to it as a “perk up.” The competition will help drive quality, while the availability of more and more space for people to stay will only be a positive to the flourishing Spartanburg downtown.

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Jordana Megonigal
Jordana Megonigal is a journalism professional with 18 years of experience in the field. She is Publisher of ShowCase Publishing and Business Black Box magazine. In the Upstate community, Jordana is a member of the Small Business Council (Greenville Chamber of Commerce), a board member for Compass of Carolina, co-chair of Greenville Women at Work, communications chair of Mission 1:27 (Taylors First Baptist Church), and serves as a Guardian ad Litem. She is also Executive Director of The Bootstrap Engine.

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