Sonoma County hotel developers propose hundreds of new rooms

Sonoma County lost 400 hotel rooms from wildfires, but will have more units this summer than a year ago as developers race to open new hotels.|

Windsor’s newest hotel had barely opened its doors in October when wildfires sent thousands of evacuees fleeing for safety and shelter around Sonoma County.

“The day the fire happened we had a line of 100 people wanting rooms,” said Kevin Desai, whose family operates the Holiday Inn Windsor-Wine Country and two other hotels in Windsor and Healdsburg.

Occupancy at the new 100-room Holiday Inn remained high through November and December, in part because evacuees had difficulty finding replacement apartments and houses. Although business is getting back to normal, the lodging industry is poised for a year of expansion as several new hotels are preparing to open their doors.

“2018 is probably going to be pretty strong,” Desai said.

The local hotel sector had an eventful fall after wildfires caused unprecedented destruction - claiming 24 lives and destroying more than 5,000 homes in Sonoma County. Among the 29 businesses damaged or destroyed in Santa Rosa were three burned hotels with a total of more than ?400 lodging units.

But by the time the summer tourist season rolls around, the county is slated to have several hundred more rooms than it did a year earlier. The count includes almost 300 rooms at three hotel properties that opened since late summer, plus an additional 325 units slated to come online this spring.

Beside those properties, developers have announced plans for at least nine more new hotels or major expansions, including the renovation of the historic Empire Building on Santa Rosa’s Old Courthouse Square. New hotels are proposed in Petaluma, Sebastopol, Healdsburg, Rohnert Park, Cotati and Sonoma.

The new properties will offer some eye-catching extras: room-service robots, rooftop bars and viewing areas, a car-stacking garage system, a hostel component within one hotel and affordable housing units provided next door to another. The projects include new restaurants, tapas bars and wine and beer venues.

“Developers are certainly interested in the region,” said Steve Jung, general manager of the Doubletree by Hilton Sonoma Wine Country in Rohnert Park and president of the Sonoma County Lodging Association. That’s what happens, he said, “when a market does so well.”

The hospitality sector has been a significant engine of economic growth in the county during the past eight years. And hotels have been a big part of that expansion.

Final numbers have yet to be released, but county hotel revenues are expected to hit a record $300 million for 2017, according to Jan Freitag, a senior vice president for travel research company STR, based in Hendersonville, Tennessee. That would be more than double the ?$135 million recorded in 2009, a time when the national economy was in a deep recession.

The average price of a hotel room rose 4.2 percent last year, double the national increase, to $172.49 a night, according to STR data through November.

“That makes the market very hard to beat,” Freitag said of the county.

STR tracks results for nearly 6,300 hotel rooms in the county. Sonoma County Tourism, the area’s main travel group, estimates the county has a total of 7,100 hotel rooms, plus about 750 vacation rentals and nearly 3,700 campground and recreational vehicle spaces.

The nation’s hotels posted record revenues last year of more than $150 billion. And the outlook appears bright in 2018 for both the Bay Area and the U.S., Freitag said.

With the reopening of the Moscone Convention Center after an extensive renovation, San Francisco is expected to be among the top destinations for meeting and group travel. And recent federal tax cuts should raise the nation’s gross domestic product, a healthy harbinger for hotels, he said.

“As GDP goes up,” Freitag said, “so does room demand.” He added that “people feel richer” because the stock market has been reaching record high levels.

Even so, county travel officials and lodging owners are watching to see what effect the fires will have on tourism in Sonoma County in 2018.

Claudia Vecchio, president/CEO of Sonoma County Tourism, noted the hotels that survived remained busy last fall. Hotel occupancy rose sharply after the fires, hitting 85.6 percent in November, the highest for any month in more than a year, according to STR. Hotel revenues that month reached $27.5 million, a 21 percent increase from a year earlier.

But many of the county’s smaller lodging properties, including bed and breakfast establishments, saw a drop in business, Vecchio said.

“They have definitely been impacted,” she said, as have some restaurants.

The tourism group recently began a study to survey potential tourists and learn whether they hold any concerns about visiting the county. The survey results, expected by the end of the month, could help inform future marketing efforts.

Also, tourism officials have purchased ads in Bay Area media touting the county as an inviting destination. The message, said Vecchio: “It’s still what you know and love.”

Owners of the three burned hotels in Santa Rosa have yet to announce plans for their properties. They include two Fountaingrove hotels - the Hilton Sonoma Wine Country and the Fountaingrove Inn - and America’s Best Value Inn and Suites on Hopper Avenue.

Along with Windsor’s Holiday Inn, the new properties include the 163-room Oxford Suites in Rohnert Park, which opened last summer, and the 34-room Astro hotel on Santa Rosa Avenue, which opened in the fall.

Looking ahead, this spring the Hyatt Regency Sonoma Wine Country near Railroad Square will complete an 89-room expansion, bringing its total lodging units to 253.

“This will allow us to house groups that are much larger,” said general manager Jennifer Richards. The Hyatt offers some of the city’s largest hotel meeting space, with 20,000 square feet of indoor areas and another 20,000 square feet of outdoor gathering space.

Also slated for a spring opening is the 75-room Hampton Inn in Petaluma’s historic brick silk mill building on Jefferson Street. The hotel’s opening was delayed after utility workers had to be redirected to fire recovery efforts.

“We’re still waiting on power,” said general manager Max Childs, though that work is now scheduled.

He suggested that renovating the circa 1892 silk mill proved more challenging than building a new structure. But it also allowed the chance to use the mill’s former dye room, with a vaulted ceiling and exposed beams, to house an evening beer and wine bar.

“It’s a great opportunity to take a shuttered old building that has so much history and breathe new life into it,” Childs said.

Also scheduled for spring openings are two properties in Healdsburg: the 122-room Hotel Trio off Dry Creek Road and the 39-room Harmon Guest House on Healdsburg Avenue a block from the town plaza.

The four-story Hotel Trio offers studio and one-bedroom units, all with full kitchens. As part of the city review process, developer Seaview Investors of Corona Del Mar agreed to build an adjacent 37-unit, affordable housing apartment project.

Among the hotel amenities, “we will have a room service robot,” said Brooke Ross, director of sales. The company has a similar 3-foot-tall robot at a lodging property near Los Angeles International Airport that delivers snacks, extra towels or other items to guest rooms.

The Harmon Guest House, named for city founder Harmon Heald, is the latest project of Healdsburg-based Piazza Hospitality. The company in 2001 opened the Hotel Healdsburg on the plaza and in 2010 the H2 Hotel about a block away. The guest house sits near H2.

Harmon will serve families and groups of travelers, offering more connecting rooms than the two other hotels, said Piazza partner Circe Sher. It features a private park and a rooftop terrace with an event space for 100 guests. The hotel will have a garage with a car-stacking system able to contain 50 vehicles, so “we’ll be taking 50 guest cars off the street,” Sher said.

Piazza also is planning a 66-room, four-story hotel in Sebastopol on Petaluma Avenue across from the town plaza. Located between downtown and The Barlow’s collection of eateries and food shops, the hotel would feature a rooftop deck area open to the public and six hostel rooms for those seeking lodging at lower prices.

Sher said she regularly gets calls from Sebastopol merchants asking “When is that opening?” Construction is slated to begin late this year or early 2019, with an expected opening in 2020.

In Santa Rosa, a key downtown project is the 71-unit hotel planned for the Empire Building and a nearby structure on Old Courthouse Square. The first rooms are slated for occupancy late this year, and the entire project is expected to be completed by June 2019, said project manager Giles Beeker.

The project is a joint venture of Santa Rosa-based Hugh Futrell Corp. and Greystone Hotels of San Francisco.

The hotel will have a ground-floor restaurant, a separate coffeehouse and a rooftop bar and cafe. Beeker said the project demonstrates the wisdom of re-energizing the downtown square, the value of reusing two early-20th-century buildings and the strength of the county’s hotel market.

“It was a labor of love putting it all together,” he said.

Another development in Santa Rosa is a planned five-story, ?142-room AC by Marriott hotel on Fifth Street in Railroad Square. The project won City Council approval in September, but the developer since has been sued by UNITE HERE Local 2850 of Oakland over plans to use a nearby residential parcel for a parking lot.

Developers in Oakland and Napa previously have alleged the union opposed their projects on zoning grounds after failing to get owners to agree to unionize their lodging properties. The AC project developer, Jeff Blackman of Dallas-based Bedford Lodging, similarly said of the union’s lawsuit, “They are clearly trying to use that to get a union contract when the hotel opens.”

At the September council meeting, a union official maintained city zoning rules clearly required residential development, not parking, on the triangle-shaped parcel that sits between Highway 101 and a downtown offramp.

Blackman said he is working with the city in search of an alternative parking solution. If one can be found, construction could start on the hotel this year.

Among other projects, Cambria Hotel and Suites has announced plans to open in 2019 a 132-room property in Rohnert Park on Labath Avenue near the Graton Resort and Casino.

In Petaluma, a 122-room hotel is planned on Hooper Street near the riverfront in Petaluma, part of a larger mixed-use office, retail and housing project. And in Healdsburg, a 130-room hotel and 70 residential units development is planned at Saggio Hills.

Projects still in city planning review processes include a 152-room Reverb hotel proposed at highways 101 and 116 in Cotati and a 62-room, spa and restaurant off West Napa Street in Sonoma. The latter project is proposed by Kenwood Investments, whose founder, Darius Anderson, is managing partner of Sonoma Media Investments, which owns The Press Democrat.

The Graton Resort and Casino in Rohnert Park also is considering an expansion. Last year it released a draft tribal environmental impact report saying the project, owned by the Federated Indians of Graton Rancheria, would add 211,328 square feet of building space to the existing 300,000-square-foot hotel.

“The Tribe is currently looking at design plans and scheduling for the construction rollout of a hotel expansion. We look forward to sharing more details in the near future as we solidify our plans,” Tribal Chairman Greg Sarris said in a statement Friday.

You can reach Staff Writer Robert Digitale at 707-521-5285 or On Twitter @rdigit.

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