Sonoma County lodging sector bustling with hotel construction and expansion
Sonoma County’s hoteliers are playing catch-up to make room for the growing number of visitors.
The lodging industry is undergoing unprecedented expansion with about a dozen properties slated to open in the next few years.
The hotel building boom comes after a dearth of new lodging in the earlier part of the decade. Developers and hoteliers now appear to be making up for inactivity in the aftermath of the Great Recession, as the county remains a prime destination for wine tourism and an array of other activities and places to visit.
“This is a very strong county. ... The occupancy level is very, very high,” said Jan Fertig, senior vice president for STR, a Tennessee research firm and longtime tracker of the global hotel industry. “Developers see a hot market and say, ‘Let’s get into it.’”
Developers are betting Sonoma County can keep delivering more tourists. It’s averaging about 7.5 million visitors a year. Those visitors are staying in more than ?7,000 hotel rooms and ?3,700 campground and recreational vehicle spaces, according to Sonoma County Tourism figures.
Local hotels reported a strong rebound in 2018, following a year in which the North Bay wildfires put a big dent in tourism. Overall, revenue last year for hotels here was ?$332 million, up 7 percent from 2017, according to STR data. Meanwhile, county hotels had an occupancy rate of 78.2 percent last year, which represents a significantly higher volume of overnight guests than the national average ?occupancy rate of 66 percent and a bump from the 77 percent rate here in 2017. Hotel occupancy levels locally soared to 85 percent last June during the summer travel season.
Over the past five years, the county’s annual hotel occupancy levels consistently have advanced from the 73 percent mark in 2013, signaling a strong lodging market, according to STR.
Notwithstanding the higher occupancy levels, county hotel developers and operators face formidable challenges to continued growth. Increased construction costs present a concern. Also, more and more tourists are booking their Sonoma County vacation rentals online through Airbnb and staying at a variety of the participating area private residences often for cheaper prices.
Another persistent worry among tourism officials is the county doesn’t have enough hotels, with meeting rooms and a kitchen, to host conferences and executive retreats.
“We got to make sure we bring the right type of (hotel) developments to the county,” said Joe Bartolomei, managing partner of the Farmhouse Inn in Forestville and chairman of the Sonoma County Tourism board.
Hotel construction is visible from Highway 101 through Santa Rosa to the reunified Old Courthouse Square downtown. In Santa Rosa, there’s a need to make up for three hotels, containing 400 rooms overall, gutted during the October 2017 fires.
Since then, the 34-room Astro hotel on Santa Rosa Avenue has opened. And Hyatt Regency Sonoma Wine Country near Railroad Square finished an 89-room expansion and the four-diamond luxury Vintner’s Inn added another ?34 rooms and suites. Those rooms made up only ?40 percent of the rooms that were lost during the fires.
Local officials and developers realize that’s not enough and say more hotel capacity is on the way.
The big hotel addition this year will be the spring opening of Hotel E in downtown Santa Rosa. Veteran developer Hugh Futrell is leading the project. The 100-year-old beaux arts building is undergoing a conversion into a boutique hotel with 39 rooms, conference space and a wine bar. A second phase with more than 30 rooms is slated to open later in the year, with a restaurant from the well-known San Francisco restaurant chain Perry’s and a coffee shop.
“That’s just going to elevate this area,” Brad Calkins, executive director of Visit Santa Rosa, said of the hotel on Old Courthouse Square.
Elsewhere in Santa Rosa, construction has started for the Inn at Santa Rosa that will include about 100 rooms on Commercial Court right next to Highway 101. Work soon will begin to build a ?142-room AC Hotels by Marriott hotel on a parking lot at Fifth and Davis streets on the edge of Railroad Square. Across town, the historic Flamingo Hotel will undergo a ?$20 million renovation to modernize the classic property and make it more hip for younger tourists.
In addition, a proposed 114-room, three-story Residence Inn by Marriott project will go before Santa Rosa City Council on Tuesday. The city planning commission last month blocked the proposal for the hotel in the city’s Fountaingrove neighborhood, citing concerns about future wildfires.