Nearly all work at the Hyatt House at 1268 Broad St. has been “below grade.”
But by the end of the month, downtown Augusta’s first new business-class hotel in nearly a quarter-century will start going vertical in a big way.
“There should be a 300-foot crane in here next week,” developer John Engler said while surveying the one-acre construction zone where workers on Thursday were putting the finishing touches on what will be the five-story building’s foundation.
The 100-plus room hotel that is expected to be towering over upper Broad next summer is just one of several hospitality developments underway or in the planning stages, thanks partly to a boom fueled by a four-year-old expansion of the city’s downtown convention facilities and growth in key employers, such as Augusta University and Fort Gordon.
Three hotels have opened this year alone. Three more are under construction, and three others are in the engineering and design phase. All told, more more than a dozen hotels have opened during the past five years, pushing the metro area’s lodging inventory above 7,000 rooms, according to data from the Augusta Convention &Visitors Bureau.
One of those hoteliers, Peach State Hospitality LLC, just broke ground on a 100-room Fairfield Inn &Suites near the corner of Washington Road and Interstate 20. In two weeks, it will cut the ribbon on an 88-room SpringHill Suites at the corner of Marks Church and Wheeler roads, which is next door to the 124-room Residence Inn the Warner Robins, Ga.-based company opened in 2015.
Peach State President Ramesh Gokal said the company is considering building a fourth hotel somewhere near the city center to accommodate medical district visitors and AU’s Riverfront Campus, where the Hull McKnight Georgia Cyber Innovation and Training Center is under construction.
“I think (the cyber facility) will generate a fairly substantial amount of business for hotels in downtown Augusta,” Gokal said of the state-owned complex expected to open in July.
With the exception of the usual Masters Tournament sell-out, area hotels generally maintain year-round occupancy rates of 60 percent. But estimates on visitor spending suggest the $50 million expansion of the city’s convention facilities at the Augusta Marriott at the Convention Center is generating a more consistent flow of conventions and events since opening in 2013.
The expansion at the corner of Ninth and Reynolds streets that houses the Olmstead Exhibit Hall last year generated a record $16.3 million economic impact, a near 40 percent increase above the exhibit halls’ first full year of operation in 2014. Tourism officials say the figure would be even higher if revenue from the Marriott conference rooms and banquet hall were factored in.
The city-owned meeting facilities, which are operated through a contract with the hotel owner, Augusta Riverfront LLC, is on track to make 2017 a banner year, said Darryl Leech, the hotel’s vice president and general manager.
“From sporting events, to exhibits, to religious conferences and management groups, it’s been a true success,” Leech said.
New hotel construction can be found in all regions of the metro area, but the largest projects are planned for the urban core. In addition to the DTJR LLC’s Hyatt and the Augusta Riverfront LLC projects, a 180-room Crowne Plaza Hotel is planned at the Riverside Village project in North Augusta, which is anchored by SRP Park.
Another new hotel could emerge on the south side of the 1100 block of Broad, where a Florence, S.C.-based hotelier has acquired 1.5 acres of land, including the former Sky City department store building. The owner, Naman Hotels, has not announced its plans for the property.
CVB President Barry White said the opening of the downtown Marriott complex nearly 25 years ago — along with the development of Augusta Riverwalk — helped create the foot traffic that enabled downtown to overtake the Washington Road corridor as the city’s premier bar, restaurant and entertainment zone.
White said the Greenville Commons and the Hyatt Regency Hotel played a similar role in helping revitalize its downtown Greenville, S.C., more than 30 years ago.
“A lot of times, it’s the hospitality sector that is on the leading edge of development,” White said. “A lot of people don’t think about that.”
About half of the two-state metro area’s 120 hotels are in Richmond County, where hotel-motel tax collections through August – the latest figures available from the Georgia Department of Revenue – are up 5.6 percent year-over-year.
A Georgia Department of Economic Development analysis of the county’s lodging tax collections estimates that Augusta hotel revenues increased 29.5 percent from 2012 to 2016.
White considers the city center’s performance to be indicative of strength in the entire two-state metro area.
“Visitors don’t stop at county lines or state lines,” he said.
Total employment in the metro area’s hospitality sector, which lumps hotel jobs in with the much larger food-service industry, peaked in July at more than 27,000, said Simon Medcalfe, a finance professor at Augusta University’s Hull College of Business who also tracks local economic trends.
He said nearly 6,000 jobs were created in the industry during the past five years.
“About 1,000 a year – that’s pretty good,” Medcalfe said, adding that hospitality has been one of Augusta-Aiken’s more reliable non-governmental employment sectors. “Manufacturing has seen an uptick recently, but it’s nowhere near pre-recession levels, nationally or locally.”
The federal Bureau of Labor Statistics lists metro Augusta’s hospitality industry “location quotient,” a measure of the industry’s concentration, at 1.16, with the entire nation being the 1.0 baseline. Quotients are higher in leisure-driven hotel markets, such as Savannah, Ga., which has a quotient of 4.5.
Gokal said stability of the metro area’s employment base, coupled with what he calls a “good labor pool” is turning Augusta into a major part of his company’s portfolio.
“We are currently looking for property for our fourth hotel, so that’s a fairly sizable footprint for one city,” he said. “From our perspective, Augusta is a very stable market. The growth industries are fairly sustainable.”
Reach Damon Cline at (706) 823-3352 or email@example.com