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Five New Hotels May Spell Trouble for Gainesville Hotels

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Five new hotels will open in Gainesville over the next few years: the Hotel Indigo, the Hyatt, the Element, a Home2 Suites and a TownePlace Suites.

The influx has some people concerned about the consequences for existing hotels and the local economy.

“I think there is a need for hotels. I don’t think there is a need for five hotels,” said Megan Eckdahl, president of the Alachua County Hospitality Council. “The only downfall is that we were in such a low for so long that we’re now starting to be able to raise our rates and gain the occupancy level.”

Construction continues on the TowneSuites at the corner of Newberry Rd. and Tower Rd.
Construction continues on the TownePlace Suites at the corner of Newberry Rd. and Tower Rd.” credit=”Kelly Audette / WUFT News

The total occupancy for hotels in Alachua County was 58.1 percent for July 2014, according to the Smith Travel Research report. This is a small increase from 57.8 percent in July 2013. The average daily rate was also very similar to the previous year, increasing from $77.79 in July 2013 to $79.52 in July of this year.

Occupancy and average daily rates during the week are much lower than on the weekends. Gainesville hotels hardly reach capacity on the weekends. Having an additional 500 rooms does not bode well with hotels.

Eckdahl said she fears developers act too quickly when they see events that increase hotel traffic, such as Gator football games and University of Florida graduations. These events only take place a few weekends per year.

Tony Trusty, general manager of the UF Hilton, agrees that filling rooms is difficult without major events, especially during the week.

“There are more weekdays than there are weekend days,” Trusty said. “If you’re feeding a family and eat really good on Saturday and Sunday, but they starve during the week, you wouldn’t want to add more children to the family.”

One of his main concerns is that all five of the future hotels are limited-service, as opposed to full-service. Limited-service hotels are less expensive, but offer guests fewer amenities and generally no meeting space.

Trusty asserts that by building more limited-service hotels, the clientele is being spread thinner rather than increasing. This will create more competition among hotels, forcing them to lower their average daily rates.

“We are heavily laden with select-service…we need to build more full service hotels,” Trusty said. “That grows your average rate and gives you the capacity to have bigger conferences because everybody has the necessary space.”

Construction crews work to ready the site for Celebration Pointe, the future home of Hotel Indigo.
Construction crews work to ready the site for Celebration Pointe, the future home of Hotel Indigo.” credit=”Kelly Audette / WUFT News

The UF Hilton is one of only three full-service hotels in Gainesville. Even though it would mean more competition, Trusty said it would be best for the community to have more full-service hotels. It would create more business and the additional bed tax would increase county funding.

Others are more optimistic. John Pricher, executive director of Visit Gainesville, said he believes that Gainesville’s newer industries will attract visitors to help sustain the hotels, on both weekends and weekdays.

“We’re seeing our corporate travel starting to increase,” he said. “Especially with the innovation things going on by campus. That market is growing for us and I think we’re going to see it more and more.”

While more hotels encourage others to compete, smaller businesses and local bed-and-breakfasts may struggle to stay afloat. Trusty said he believes some will close.

However, Cindy Montalto, owner of the Magnolia Plantation, said she does not think new hotels will affect Gainesville’s bed-and-breakfast destinations.

The Bambi Motel will soon be replaced by a Home2 Suites.
The Bambi Motel will soon be replaced by a Home2 Suites.” credit=”Kelly Audette

“I don’t think that they’ll really have much effect on my business,” Montalto said. “Some new hotels have even brought me more business because I look at their rates and go $20 below so people want to stay here.”

Other small hotels have already closed to make room for new businesses. One of the five hotels, Home2 Suites, will soon replace the iconic Bambi Motel on 13th St. The extended-stay hotel is set to open in 2015 and will have 95 to 100 rooms. (AP Street)

Another two of the five hotels will be extended-stay. Element Gainesville, an environmentally conscious hotel, will open in March of 2017. The 123-room hotel will be located on Archer Rd. by 16th Ave. The third, a 96-room TownePlace Suites, is replacing the Holiday Inn West on the corner of Newberry and Tower Rd. It is set to open in December.

The Hotel Indigo will be a part of a new neighborhood, Celebration Pointe, located on Archer Rd. just west of Interstate 75. It is scheduled to open in 2016. The 120-room boutique hotel will serve locally-sourced food, providing a unique experience that guest won’t receive at a normal hotel.

The fifth is reported to be a Hyatt located behind the UF Hilton near The Grove, a student-housing community.

Although the new hotels will disrupt the current industry in Gainesville, both Eckdahl and Pricher agree that existing locations will develop new strategies to attract customers.

“I think the hotels will do well, they’re going to be just like a shiny new object,” Eckdahl said. “Some guests will stay with the new and some will come back to their previous choices.”

About Kelly Audette

Kelly is a reporter who can be contacted by calling 352-392-6397 or emailing news@wuft.org.

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