New downtown Cleveland hotel projects including W Cleveland and $ 62 million Renaissance rebranding signal post-pandemic optimism
CLEVELAND, Ohio – It’s too early to celebrate the end of the pandemic’s effect on the Cleveland hospitality industry. But there are reasons to be optimistic.
After more than 18 months of pandemic-induced paralysis, the hotel development pipeline is showing some signs of life, with a new hotel planned for one downtown building, a major renovation planned for another, and more.
In recent weeks, several dramatic downtown hotel projects have come to light, after a long period of inactivity:
* The owners of the Erieview Tower have announced their intention to transform the lower floors of the 40-story skyscraper into a luxury W hotel, with 210 rooms. It would be the brand’s first hotel in Ohio.
* The owners of the Renaissance Cleveland Hotel have shared plans for a $ 62 million renovation of the historic beauty, which would also include the rebranding of the property that faces Public Square. Consultant Stephen Goodman, working for Toronto-based Skyline Investments, told city officials last month that the property will be renamed as part of Marriott’s upscale autograph collection and will revert to its historic name, Hotel Cleveland, or simply “The Cleveland.” In addition to remodeling the lobby, meeting spaces, and 491 guest rooms, plans include adding a retro “Hotel Cleveland” sign to the top of the building, built in 1918.
* And several potential owners have submitted offers to buy the Westin Cleveland Downtown, one of the city’s premier convention-focused hotels, which faces foreclosure action after months of unpaid bills. Among the possible new owners is Connecticut-based HEI Hotels & Resorts, which owns many upscale properties in the United States, including the Westin Cincinnati.
“I think there is cause for optimism,” said David Sangree, president of Hotel & Leisure Advisors, a Cleveland consulting firm. âDevelopers are looking beyond the pandemic – they are no longer afraid of it. “
The hospitality industry, especially in inner cities of major cities, has been devastated by the economic slowdown induced by the pandemic, with occupancy falling to single digits at the onset of the health crisis.
And while it might be too early to say the hard times are over, it’s almost certainly true that the worst times are a thing of the past.
The hotel occupancy rate in downtown Cleveland in August was 62.7%, according to STR, a hotel data company. This is the highest for almost two years, since November 2019.
Matthew Watson, general manager of the downtown Metropolitan at The 9 hotel, said summer weekends were as busy as they were before COVID. The weekdays drag on. âMy opinion is that it all depends on the news about variants, surges and the like,â he said. “Once the coast is cleared, business travel will return.”
As for the additional competition that will enter the market in the years to come, Watson said, âThere is going to be a debate going on regarding the additional supply in the market, but as we have seen with the latest expansion in 2016, demand seems to grow to meet supply needs. “
Indeed, hotel occupancy rates in the Cleveland area declined briefly after the 600-room Hilton Cleveland Downtown and other properties opened before the Republican National Convention in 2016, but has increased in recent years (au less before the pandemic).
Laurel Keller, senior vice president of Newmark Valuation & Advisory, said Cleveland hotels appear to be recovering faster than many of their Midwestern peers, at least according to a key industry metric, revenue per available room (or RevPAR , which is calculated by dividing hotel revenue by the total number of rooms). According to Keller’s analysis, Cleveland’s recovery has been faster than the markets of Columbus, Cincinnati, Indianapolis, Chicago, Detroit, Milwaukee and Minneapolis.
âAs with any downtown market, the recovery will take longer than suburban markets,â she said, adding: âThe interest of developers seeking to enter a market is generally seen as an indicator. positive economic. “
The path to full recovery, however, is unlikely to be a straight line. Among the anticipated obstacles: The continued effect of the delta variant on travel decisions, and the increasingly sluggish rebound in business travel.
Larger downtown hotels, including the Westin, Hilton Cleveland Downtown, Renaissance, and others, rely heavily on group travel from the Huntington Convention Center and other venues, as well as business travelers. Both groups took a long time to come back.
Ron King, general manager of the Huntington Convention Center in Cleveland, had to revise down his optimism from the start of the year about the group’s return to business.
He now does not expect the convention center to return to pre-pandemic levels until 2024. “This pandemic continues to spread,” he said. “I was much more optimistic earlier.”
Read more: Post-pandemic recovery expected to take years for Cleveland’s Huntington Convention Center
Despite the lingering uncertainty, the investments hotel companies are willing to make in Cleveland suggest they believe better times are ahead. It also helps that many of the investments made today are not fully realized until 2024 or beyond.
Along with the recent headline-grabbing developments regarding the W Hotel, Renaissance and Westin, there are plenty of other smaller projects that industry watchers are watching. Among them:
* The Orbit, a 54-room Wyndham Trademark hotel under construction across from Cleveland Hopkins International Airport, in a former NASA Glenn Research Center building. Its opening is scheduled for mid-December.
* A 130-room hotel included in plans for Bridgeworks development at the west end of the Detroit-Superior Bridge, at the corner of Detroit Avenue and West 25th Street in Ohio City.
* And plans yet to be revealed for the Baker building on 6th Street East, near Euclid Avenue. The new owners of the 11-story building were given a landmark $ 2 million tax credit late last year to help with a $ 23 million plan to turn the building into a luxury hotel. charm.
Other projects, including the project to dazzle the historic Masonic Temple on Euclid Avenue and 36th Street E. into a dream hotel, have been delayed. Originally slated to debut in 2022, the Dream Cleveland is now listed on the company’s website as open in 2024.
Sangree warns that not all projects will move forward, which is the case even in times of less economic uncertainty. âWe’ll wait and see what gets funded and what gets built,â he said.
Yet, he said, this whole conversation, after months of silence, is a source of optimism. He also noted that his consulting business is very busy, another sign that the developers are serious.
âInvestors and hotel developers see a light at the end of the tunnel,â Sangree said. “They are ready to invest the money and not just wait.”