Proposed W Hotel In Uptown

[houston-development]

*to no one in particular*

keep shooting the messenger and see if they disclose as much information next time.

the unappreciative people really do ruin it for everyone else.

learn to appreciate insight from those who know, dont demand elaboration or else their credibility is crud, and take it for what its worth.

: gets off soap box :

[ArchitecturalPRGirl]

Ummmm, since it was posted as a response to New Juniper, I thought it should have been pretty obvious that it was to New Juniper, not to you ;-)

Well it wasn't clear because I don't think New Juniper was saying that either. He said those hotels are currently not meeting those numbers, not that they should be closed down by now.

Read people.

[Houston19514]

*to no one in particular*

keep shooting the messenger and see if they disclose as much information next time.

the unappreciative people really do ruin it for everyone else.

learn to appreciate insight from those who know, dont demand elaboration or else their credibility is crud, and take it for what its worth.

: gets off soap box :

No one is shooting any messengers. I just like more than anecdotes from a friend of a friend of a second cousin's husband, especially when the anecdotes don't really comport with the factual evidence can look up. ;-) Sorry that bothers you.

FWIW, the most recent numbers I can find for downtown Houston are for January and February of this year:

62.7% occupancy

$169.57 ADR

By way of comparison, Downtown Dallas (including Uptown and Victory) was recently reported to have the following hotel numbers:

63.4% occupancy

$166.50 ADR (and that includes the W Hotel). Remarkably similar numbers, and they are also down from last year by a similar amount. And that is a market in which several other hotels, including a Ritz-Carlton are about to open, and with a Mandarin Oriental proposed.

[ArchitecturalPRGirl]

No one is shooting any messengers. I just like more than anecdotes from a friend of a friend of a second cousin's husband, especially when the anecdotes don't really comport with the factual evidence can look up. ;-) Sorry that bothers you.

FWIW, the most recent numbers I can find for downtown Houston are for January and February of this year:

62.7% occupancy

$169.57 ADR

By way of comparison, Downtown Dallas (including Uptown and Victory) was recently reported to have the following hotel numbers:

63.4% occupancy

$166.50 ADR (and that includes the W Hotel). Remarkably similar numbers, and they are also down from last year by a similar amount. And that is a market in which several other hotels, including a Ritz-Carlton are about to open, and with a Mandarin Oriental proposed.

That just proves my original point that downtown is not the place for the W. That's where my commentary originated. Thank you for validating what I said.

NEXT

[Houston19514]

Well it wasn't clear because I don't think New Juniper was saying that either. He said those hotels are currently not meeting those numbers, not that they should be closed down by now.

Read people.

Don't get snippy with me. Had you read my first postings, you wouldn't have asked who I was referring to in the first place.

It wasn't TNJ's comments in this thread I was referring to. I was referring to a discussion we had several years ago, in which he predicted multiple downtown hotel closings.

That just proves my original point that downtown is not the place for the W. That's where my commentary originated. Thank you for validating what I said.

NEXT

How does that prove your point?

The downtown Dallas hotel market was in WORSE shape than downtown Houston several years ago. They've since added the W (and possibly one or two other hotels) and have still improved to the point of being in as good of condition as downtown Houston's hotel market. And this in a downtown that still has extraordinarily high office vacancy rates. If anything, it tends to show that downtown Houston probably COULD handle a W.

[Houston19514]

FWIW, here are the numbers for the Uptown Houston hotel market:

70.9% occupancy (also down from last year)

$137.40 ADR (lower than downtown)

With at least one or two additional hotels already under construction or ready to start construction (eg Aloft)

Also, FWIW, I think Uptown is the most likely location for a W. But I do not think that necessarily means a W downtown could not be successful.

[ArchitecturalPRGirl]

Don't get snippy with me. Had you read my first postings, you wouldn't have asked who I was referring to in the first place.

It wasn't TNJ's comments in this thread I was referring to. I was referring to a discussion we had several years ago, in which he predicted multiple downtown hotel closings.

How does that prove your point?

The downtown Dallas hotel market was in WORSE shape than downtown Houston several years ago. They've since added the W (and possibly one or two other hotels) and have still improved to the point of being in as good of condition as downtown Houston's hotel market. And this in a downtown that still has extraordinarily high office vacancy rates. If anything, it tends to show that downtown Houston probably COULD handle a W.

I hope to god they put the W downtown so you can watch them commit suicide. Cause I don't know what I'm talking about. Hopefully their market analysts are smarter than that. The Galleria makes more sense because it has a mix of major businesses and corporations, successful restaurants, Highland Village, and the main attraction being the Galleria, which International travelers who are savvy of the W flock to and spend money. The Galleria area hotels are pretty dated, even the Houstonian. And the Derek, well its the Derek. It's like IKEA. Duh, it's a no brainer.

Honestly I would prefer it to be downtown as I live nearby and work downtown so it would be a welcomed addition as far as dining and drinking options go. From what I know to be the current state of the industry, I just don't think they would do that to themselves. Speaking of drinking, gotta go. Ciao Houston 19something.

[Houston19514]

I hope to god they put the W downtown so you can watch them commit suicide. Cause I don't know what I'm talking about. Hopefully their market analysts are smarter than that. The Galleria makes more sense because it has a mix of major businesses and corporations, successful restaurants, Highland Village, and the main attraction being the Galleria, which International travelers who are savvy of the W flock to and spend money. The Galleria area hotels are pretty dated, even the Houstonian. And the Derek, well its the Derek. It's like IKEA. Duh, it's a no brainer.

Honestly I would prefer it to be downtown as I live nearby and work downtown so it would be a welcomed addition as far as dining and drinking options go. From what I know to be the current state of the industry, I just don't think they would do that to themselves. Speaking of drinking, gotta go. Ciao Houston 19something.

I'm glad you're getting a drink. Seems like you need one...

[ArchitecturalPRGirl]

I'm glad you're getting a drink. Seems like you need one...

And you as well. Care to join?

[Houston19514]

And you as well. Care to join?

Would love to , but it would take me a while to get there. ;-)

(No offense, but I'm not the one who has gotten all snippy and defensive, and wishing for businesses to "commit suicide"...)

In summary, you are failing to distinguish between the health of the overall downtown hotel market (which is pretty good) and the health of individual hotels (regarding several of which you have provided anecdotes, but no facts, indicating they may be struggling). As one "in the industry" I am sure you know there are many reasons particular hotels may struggle even when the overall market is good... bad management, failure to affiliate with a chain or national reservation system, bad location within the market, bad marketing...

If these hotels (Icon, Alden, Magnolia) are indeed all struggling as badly as you say, one would expect their owners to make some drastic changes, like affiliating with a chain, lowering their weekday rates to a level closer to their weekend rates. (or as TNJ predicted some years ago, close down). And yet, they continue to soldier on, remaining independent, still charging over $200/night (except for the Magnolia) on weekdays... I just can't make sense of it. ;-)

And, fwiw, you have probably noticed that the W is part of a major national chain, which would give it a clear leg up on succeeding in the downtown market.

[KinkaidAlum]

Would love to , but it would take me a while to get there. ;-)

(No offense, but I'm not the one who has gotten all snippy and defensive, and wishing for businesses to "commit suicide"...)

In summary, you are failing to distinguish between the health of the overall downtown hotel market (which is pretty good) and the health of individual hotels (regarding several of which you have provided anecdotes, but no facts, indicating they may be struggling). As one "in the industry" I am sure you know there are many reasons particular hotels may struggle even when the overall market is good... bad management, failure to affiliate with a chain or national reservation system, bad location within the market, bad marketing...

If these hotels (Icon, Alden, Magnolia) are indeed all struggling as badly as you say, one would expect their owners to make some drastic changes, like affiliating with a chain, lowering their weekday rates to a level closer to their weekend rates. (or as TNJ predicted some years ago, close down). And yet, they continue to soldier on, remaining independent, still charging over $200/night (except for the Magnolia) on weekdays... I just can't make sense of it. ;-)

And, fwiw, you have probably noticed that the W is part of a major national chain, which would give it a clear leg up on succeeding in the downtown market.

I remember the Juniper's predictions. It was dire. 2 to 3 of the boutiques would most likely be closed within a few years and the Hilton was going to wreck the market.

I am glad that didn't happen. The downtown hotel market (as a whole) is doing ok. January and February are two of the slowest travel times of the year so having collective occupancy levels around 63% and ADR around $170 is pretty darn decent. The ADR is around an ALL-time high. Predictions for the rest of the year and near future are bright (thanks to advance convention bookings and solid energy related biz travel).

[The New Juniper]

I think it's fair to point out that, according to you, a good number of the downtown hotels were supposed to have gone under by now. But, amazingly, not a one has closed.

This type of dialogue is what is great about the site.

I will say it this way, the hotels are struggling. The reason they haven't closed is because the owners are writing checks to keep them afloat. Unnamed hotels have had to go to their banks and restructure and negotiate long periods where no payments are made b/c none can be afforded. Not interest only payment, NO payments. Some very wealthy people own huge chucks of these hotels downtown and are all, all, all are writing checks.

I remember the Juniper's predictions. It was dire. 2 to 3 of the boutiques would most likely be closed within a few years and the Hilton was going to wreck the market.

I would love to be wrong. But I am not.

In the hotel business, the fact the door is open is not representative that they are doing well or are even justified. In many cases, they are open b/c the banks would rather have an asset back that generates some cash as opposed to none.

Now, before anyone freaks out and accuses me of saying these hotels are in bankruptcy blah blah, I'm not. They do not make money. They don't. Period. If the owners want to continue to write checks b/c it makes them feel better, they don't want to admit failure, they can't afford not to write the checks b/c the alternative is even worse....makes no difference to me.

But, anyone who believes the fact that somehow the existence of a property justifies the construction and development of it is in the wrong business.

The W or Ritz will be built in Houston for one of two reasons: First, the condos will be tremendously profitable. Secondly, to stoke someone's ego. That is it. There is no set of projections John Keeling can produce that will justify the investment.

But, it will get done. The first owner of the hotel will bask in the glory of owning the highest profile hospitality project to ever hit Houston. It will do well for a bit after opening. Then, with the tremendous backing of the Starwood name, it will settle very nicely into a business traveler niche and generate great cash flow. Only the cash flow won't be enough to cover the debt and it will be sold. Then, the second guy will struggle and keep it going until he realizes it is never the profit center he thought. The second guy will struggle between spening money on deferred maintenance (replacing furniture, carpet, etc. ) in the building which will cost $20MM or so. He will say, "how can i justify spending the money if i don't make any currently"? Finally, in year 10, someone will buy the hotel, put the cost of the deferred maintenance in his purchase, fix it up, and by then the rates will carry it and he'll make money.

If you don't believe me, go ask the group that started Four Seasons. Ask them how much they made.

Happy July 4th.

TNJ

[Houston19514]

This type of dialogue is what is great about the site.

I would love to be wrong. But I am not.

TNJ

The problem with all of that, TNJ, is that you ARE wrong. You predicted a veritable bloodbath with multiple closings. It couldn't be much simpler and is clear for all to see. That has not happened. So enjoy being wrong.

[Subdude]

Aren't there two main drivers for downtown hotels? First is mainly business travel, which as pointed out is strong due to the strong economy. Anecdotally, I have had coworkers complain about it being hard to find a hotel room downtown, although our corporate travel site steers them to the large chains where there are discounts. The second driver is the convention business, and most of the newer hotels were developed and given tax breaks to support that. The convention business is a lot more likely to be spotty, and it makes sense that those newer hotels are struggling. Hotel rebranding is very common. At some point maybe some of the hotels like Magnolia, Inn at Ballpark, Alden, etc. will end up as Marriotts or Sheratons.

[Houston19514]

I will say it this way, the hotels are struggling. The reason they haven't closed is because the owners are writing checks to keep them afloat. Unnamed hotels have had to go to their banks and restructure and negotiate long periods where no payments are made b/c none can be afforded. Not interest only payment, NO payments. Some very wealthy people own huge chucks of these hotels downtown and are all, all, all are writing checks.

TNJ

If a hotel is struggling so badly and is unable to fill its rooms, wouldn't we expect them to take some significant steps to address the problem? Starting with lowering rates to fill the rooms? I am presuming that their substantially lower weekend rates still more than cover their marginal costs; please correct me if that presumption is wrong. If so, it seems that they should be able to generate better cash flow if they lowered their weekday rates in the direction of their weekend rates and filled more rooms. AND, it would seem maybe they would affiliate with a chain. Very wealthy people may have large egos, but most of them don't enjoy writing checks and pouring money down a rat hole, so to speak. Tell me where I am going wrong.

[cwrm4]

Anecdotally, I have had coworkers complain about it being hard to find a hotel room downtown, although our corporate travel site steers them to the large chains where there are discounts.

That's a large part of the supposed problem, IMHO. Most people traveling for business - especially in Houston, with the oil or medical industry - either book their rooms on the company's preferred travel website, or they have an admin do it for them.

Few business travelers risk a reservation at an unknown hotel, instead picking a place (e.g. Doubletree) they "know". Also, hardcore travelers are point-whores, and will go out their way to ensure they check-in to somewhere that 1) they get some sort of privileges associated with their "status", and 2) they'll earn points for their next planned vacation. That means a chain, and not an unknown-to-them boutique hotel.

[Montrose1100]

Alot of Circuit Boys stay in the fancy shmancy boutique hotels.

[ENGcons]

Just spoke to someone about the W this morning. The W is a done deal and will be in Houston with construction starting within the next 2 years. Location is finalized, but the design is still in the works, in fact drawings have not yet begun as far as I know.

[Gary]

Just spoke to someone about the W this morning. The W is a done deal and will be in Houston with construction starting within the next 2 years. Location is finalized, but the design is still in the works, in fact drawings have not yet begun as far as I know.

Can you provide location?

[bachanon]

i tried to get engcons to play the "it is not going to be at *******" game and he wouldn't take the bait.

he said it would NOT be in the woodlands, but he wouldn't say it would NOT be at blvd place.

maybe he/she will tell us if it will NOT be downtown. that would be another good indicator.

i think the galleria area is the most likely place and coming from someone who is in the know (engcons), where it will NOT be will be fun for most of us.

[Triton]

So they do plan to build a W Hotel in Houston?

I noticed on another forum that someone had pointed out that they planned to build a W Hotel in Houston and they featured this image:

^^ W Hotel

Any thoughts?

[moni]

So they do plan to build a W Hotel in Houston?

I noticed on another forum that someone had pointed out that they planned to build a W Hotel in Houston and they featured this image:

^^ W Hotel

Any thoughts?

Pretty!

[ENGcons]

Sorry due to confidentiality agreements I cannot talk about the location. But if you just think about it where it should go then you can figure it out.

Also I am getting a red X on the image posted so I can't say.

I know the W is pretty cool news coming to Houston, but there is another project that is in the works is going to be even more awesome if it goes through.

[bachanon]

Sorry due to confidentiality agreements I cannot talk about the location. But if you just think about it where it should go then you can figure it out.

Also I am getting a red X on the image posted so I can't say.

I know the W is pretty cool news coming to Houston, but there is another project that is in the works is going to be even more awesome if it goes through.

dude, you're hurting me.

[ProHouston]

Sorry due to confidentiality agreements I cannot talk about the location. But if you just think about it where it should go then you can figure it out.

Also I am getting a red X on the image posted so I can't say.

I know the W is pretty cool news coming to Houston, but there is another project that is in the works is going to be even more awesome if it goes through.

That tells me BLVD Place.

[ENGcons]

That tells me BLVD Place.

Sorry, that's not the location.

[Triton]

Also I am getting a red X on the image posted so I can't say.

I attached an image file. Can you see it now?

If you can't see the image, it says "HighStreet Houston".

[BuilderGeek]

Sorry, that's not the location.

That tells me downtown???

[Mister X]

Who cares if it's a smart idea or not, I'm thinking about the coolness factor a W would add to the HP area. The reality of the actual hotel business is too boring to care about, give me risky and stupid anytime.

Is it downtown?

If someone guesses right, will you let them know, ENGcons? No one in the industry will know you spilled the beans. Besides, the W people probably don't come to HAIF, so theres no need to worry.

Is the answer among the locations listed in the poll? - "somewhere else" doesn't count!

If you can't give info about where it will be, can you tell us WHEN we might be hearing an announcement?

Will it be July?

[The Great Hizzy!]

dude, you're hurting me.

That's oh so Sand Lot-ish...

"Smalls, you're killin' me!"