Hotels spring up as visitor numbers keep climbing
Alaska has some of the highest hotel occupancy rates in the country on average in the short four-month period from May to September, enough to warrant yet four more hotels on the Anchorage landscape in addition to three that went up last summer.
The Hyatt House on C Street opened in May and the company is breaking ground for two more hotels on land cleared at nearby 46th Avenue. Last summer saw My Place on Old Seward across from the University Center open. A new Aptel Hotel opened near the Northway Mall. And Home2 Suite opened in 2016 near Motel 6, also on C Street.
“Hotel Row,” as C Street is dubbed, isn’t finished becoming one long string of hotels in its stretch from International Airport Road to Northern Lights. Senior City Planner Francis McLaughlin said the city didn’t plan it that way, but a thematic draw in the area makes sense in its proximity to the airport and its zoning allowance for hotels.
The Alaska visitor industry has sustained hotel growth, said Alicia Maltby, executive director of the Alaska Lodging and Hotel Industry Association.
The 24,000 hotel rooms in the state are soon to be boosted by another couple hundred rooms at least, she estimates, in the new structures. More than half of the statewide number is in Anchorage.
“If the occupancy rate isn’t 62 to 67 percent or better, the hotel investors are not going to gamble by building,” Maltby said.
Anchorage has a consistent record for hotel occupancy over the past three years, especially since new tourism records were achieved at nearly 2 million visitors in 2016.
But the summer months saw increasing demand for hotel rooms, and some hotels unable to keep up with that demand, she added.
Records for the Anchorage Municipality’s 12 percent bed tax collected city wide shows more than 8,000 rooms were rented per quarter, or 65 percent occupancy and higher. As of May 22, $3.7 million was collected in the first quarter 2017 on 8,178 rooms. In the breakdown, $1.6 million in taxes came from “upper class” rooms and $1.7 million came from mid-market rentals. Another $196,748 came from economy class.
Compare that with peak season in the third and fourth quarter. Anchorage took in $7 million and $10 million respectively after rentals of 17,400 rooms collectively.
In 2015 first quarter, 7,985 rooms were rented at Anchorage’s hotels and a collection of $3.8 million is shown in city tax records. That year, 2015, also saw, peak-season, tax collection of $7 and $10 million in second and third quarters on 16,860 rooms.
“Hotel occupancy in Anchorage has been pretty consistent largely due to the good marketing efforts. Anchorage is a convention destination,” Maltby said. “The bed tax fund was used to build the Dena’ina Center. Iditarod brings a good crowd. The AFN (Alaska Federation of Natives) comes to Anchorage and Fairbanks, alternating years. We have ‘Staycations’ now and business travel as well as corporate events. Sales teams do a good job to keep occupancy up.”
Another hotel is going up on a 3.5-acre site near Office Depot and Lowe’s off C Street, this one a Hyatt Place Hotel where 148 rooms are planned, McLaughlin said.
The Ted Stevens Anchorage International Airport also is getting into the hotel business. Currently it is in a 60-day period accepting requests for proposals, said Tom Hubble, the airport leasing and concessions business manager.
“The idea is to walk from the airport into the hotel without going outside,” Hubble said of the concept.
Possible locations have been proposed between the airport’s South Terminal and North Terminal or by the train depot at the airport. Hubble expects the estimated $40 million to $60 million project to go up for bid later this year, with hope for construction to begin in 2018.
The Kenai Peninsula, which received more than 1 million visitors in both 2015 and 2016, looks like it could support more hotels to the casual visitor, said Shanon Davis, director of the Soldotna Chamber and former director of the Kenai Peninsula Tourism Marketing Council.
“The whole Peninsula could support the development and we do have new properties opening up, new B&Bs, a new lodge in Seward and an extended one at the Fox Island Wilderness Lodge and the Alaska Wild Land Adventures at Cooper landing,” she said.
But no new hotels proposed for the region could mean a couple of factors, Davis said.
One is that it takes time for investors to feel confident that “now is the right time to buy and to expand.”
That’s not to say there aren’t big investments, such as in the transfer of the Kenai Landing, formerly owned by Jon Faulkner, who owns Land’s End in Homer.
It was sold to Ron Hyde, founder and chief executive officer of PRL Logistics. The historic cannery went through a year of intensive design and preservation work and was renamed “Cannery Lodge.”
“We have a tremendously diverse amount of lodging on the peninsula,” Davis said. “Cabins along the Kenai River, B&Bs. Definitely, that is what is saving the area as far as having enough rooms. Except for three weeks in July when the kings and reds are good at the same time, we seem to have enough rooms for everyone.”
The outlook is for continued good visitor numbers to the Peninsula this summer, she said.
One continued complaint expressed by several Peninsula communities is that cruise ship passengers by-pass their towns en route to Denali National Park or elsewhere by bus or train.
“A new hotel built by Holland America or Princess is one thing I think a lot of us would like to see,” Davis said.
No new hotels are going up in Juneau, at least, none were publically announced, said Juneau Chamber of Commerce Executive Director Craig Dahl. But big investments are going into hotels in the land-locked seaside capital of the state.
A multi-million dollar renovation at the Goldbelt Hotel rebranded it to the Four Points by Sheraton Hotel and put millions of dollars in the local economy.
It was purchased by the owner group, YC Rivergold Hotel LLC, in July 2015 with the intent to rebrand it as Four Points, said General Manager Aimon Indoung.
“The hotel was built in 1976 and there is no room to add space since we are downtown,” Indoung said.
The 106-room hotel saw bathroom overhauls and major design changes, she said.
Sitka will see a 71-suite Aspen Hotel open on July 15, adding a fifth hotel to the popular southeast Alaska town that sees seven to eight cruise ships per week. Sikta Chamber of Commerce’s Eileen Chanquet said rooms sell out at the Westmark, Totem Square, Super 8 and Sitka Hotel during the summer.
“We’re excited to get another hotel up and running,” she said.
My Place Hotel in Ketchikan opened this spring, adding 64 rooms to availability, said Chamber Director Bill Swift.
This is the chain’s second Alaska hotel; the other one is located on Anchorage’s Seward Highway.
Naomi Klouda can be reached at [email protected].