Sonoma County hotel developers propose hundreds of new rooms
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.