Hotels, Motels: Raleigh in Ten Years

In Buzz, November 2018 by Jane Porter1 Comment

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Raleigh’s tourism office has a plan to attract 5 million more yearly visitors by 2028—but the city needs to be strategic in how it will accommodate them.

 

On a recent weekend, when bluegrass lovers poured into downtown Raleigh from all over the Southeast, and alumni and football fans traveled in for the Wolfpack’s first home game of the season, the occupancy rate for the market’s 16,000 hotel rooms ran somewhere around 93 percent. That’s a lot of visitors, and a lot of new money flowing into the city. So, it’s little wonder that, when it comes to new hotel construction, the free market free-for-all is alive and kicking in Raleigh and Wake County.

Between now and the end of 2022, more than 10 different limited-service, boutique and extended stay hotels could open to vacationers, business travelers and convention goers in and around downtown Raleigh alone, adding hundreds of rooms to the area’s overall stock and helping to achieve a countywide goal of attracting 21.7 million yearly visitors by 2028. In just the past month, Guest House, a boutique hotel on South Bloodworth Street, and Revisn, an extended stay hotel in Glenwood South, opened their doors. Dozens more hotel proposals are in the pipeline, both for downtown and for other regional clusters in the city and county, such as North Hills, Brier Creek, Cary and Morrisville.

But, in order to support one of the city’s key facilities, the Raleigh Convention Center (RCC), and to keep Raleigh competitive with other cities with similar assets, city and county officials and planners need to think carefully about taking Raleigh to the next level in terms of how it will accommodate all these new visitors that it plans to attract. In other words, even the hundreds of new hotel rooms spread out all over the city, county and downtown might not meet the area’s actual demands.

“We’ve got to be strategic and comprehensive about our next series of builds,” says Loren Gold, the executive vice president of the Greater Raleigh Convention and Visitors Bureau (GRCVB). “It’s got to be a proactive strategy, we cannot sit around waiting for people to show up in the market going ‘I want to build a hotel.’ We’ve got to say, ‘We want this, let’s go get it.’”

In the last year, the GRCVB led a major study, known as Destination 2028, in order to set long-term goals for tourism in Raleigh and Wake. The plan, which was guided by a steering committee of prominent locals from the public and private sector and grounded in research from real estate services consulting company JLL, found that, organically, the county could attain 18 million visitors per year by 2028, up from 16.5 million in 2017. But, with
enhanced tourism infrastructure, including potential upgrades to the RCC, or a new sports complex—Major League Soccer, anyone?—the area could attract an additional three million visitors across convention, meetings, sports and leisure tourism.

To reach 21.7 million visitors by 2028, the plan posits ten key recommendations, including building a multi-use indoor sports complex, as well as an MLS stadium somewhere within the county; developing the Blue Ridge Corridor into “a sports, entertainment, arts, scientific, medical and agricultural campus;” offering more signature events and festivals, and offering unique visitor experiences (at Dix Park, for instance); capitalizing on a regional interest in e-sports and gaming; and increasing international visitation from Canada, Europe, China and India.

The plan’s first recommendation, though, is to enhance the $221 million RCC, the city’s and county’s largest asset funded with interlocal tax dollars (that is, lodging and prepared food revenues) through renovation and expansion, or to add another full-service, 400-plus room hotel within walking distance.

“We’re not anti-125-room hotels,” says Gold of the glut of lifestyle, boutique or smaller, limited-service hotels that predominate in the Raleigh market and cater largely to the city’s business travelers who comprise about 10 percent of the area’s annual visitors (see above). “Those are our key partners, but we have to be very diligent about where we build, why we build and what market we’re going after.”

The market that will take Raleigh to the next level, stakeholders say, is comprised of people visiting the city for meetings, trade shows, conferences and other convention business, a group that already accounts for one-fifth of all visitors’ reasons for coming.

“Having a third full-service hotel near the Convention Center, in addition to the Sheraton and the Marriott, would be of great benefit in terms of attracting larger conventions,” says Charles Meeker, the former mayor of Raleigh who pushed for building the RCC during his tenure and who serves on the committee in charge of implementing Destination 2028. “Right now, we simply do not have adequate hotel space nearby. The convention business is now bouncing back after being significantly hurt by House Bill 2, so we’re seeing a situation where, as the [interlocal tax dollars] are allocated, this facility has an interest in being at the top of the list for consideration.”

Destination 2028 lays out three scenarios by which the city and county can spend interlocal tax dollars to beef up business at the RCC. These include suggestions to use current space at the Convention Center more efficiently, to expand the building—it needs another ballroom-sized space—and to add the aforementioned hotel. The most aggressive scenario, which combines renovating the RCC and adding the full-service hotel package, could more than double the current number of hotel rooms occupied per night, per year, from today’s rate of 72,448 to 175,746.

This combined renovation-hotel package scenario would mean not only more revenue for the Convention Center and more efficient use of its facilities, but it’s a more attractive option to event planners who want to bring large groups to the city for meetings, conventions and trade shows, and want to accommodate them as close to the RCC as possible. It would also make Raleigh more competitive with peer cities, including Boston, Austin, Richmond, Charlotte and Greensboro, in attracting new events and retaining current business.

“Now, if you’re bringing a 5,000-person conference to Raleigh, you’re going to need more than the two major downtown hotels, and you’ll be spread out, adding transportation to the Convention Center [as a consideration],” says Angela Caraway, a meetings and event planner at the Caraway Management Group who served on the steering committee for Destination 2028. “We as planners do not want to have multiple hotels we have to manage because it adds another layer of responsibility in contracting. If we keep [the number of hotel contracts] to a minimum, absolutely, I know many planners would sign up on that right away.”

It will take a measure of political will from elected officials on Raleigh’s city council, especially, to support expanding the RCC and recruiting a full-service hotel developer. There are also some practical considerations that must be accounted for, including where the RCC can grow, physically, and where a new full service hotel can be erected (the Budget Car Rental lot and the Red Hat amphitheater property have been floated, as the amphitheater is likely to relocate to Dix Park).

“[The city] put $15 million into the meeting rooms, the public spaces, so with the Convention Center, the city does typically drive it, rather than the county,” says Meeker. “I haven’t talked to the current council members, but in the past, the council was always very supportive of the Convention Center for spending funds on new projects.”

Last month, the council heard a presentation on this very topic. It’s a good thing, too, because the ball needs to start rolling sooner rather than later.

“We have to start having the dialogue now, and look on the horizon of when we want to have this all done by,” says Gold of the GRCVB. “The good news is we have this plan and the hope is people take the time to read it, build the correct framework and put it in the correct context.”

Caraway says she sees a lot of positives in moving forward with enhancing the RCC and adding another full service hotel nearby.

“Obviously, it would help with economic empowerment, with additional jobs,” Caraway says. “We would be able to attract new business and retain conventions that have grown and cannot stay in the current sized center. To add to that, Raleigh has a lot to offer and what makes Raleigh special are the people, the businesses, the start-ups, the locals. When you add that to having adequate convention and meeting space, it brings so much more value to the package of selling this destination.” 

 

Both Infographics Source: DK Shifflet for the Greater Raleigh CVB (2017, 2018) 2014-2016 (excluding day-trippers and international visitors) Courtesy of Visit Raleigh.

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Comments

  1. Although smaller hotels are good, a High rise Hotel in Downtown Raleigh is Greatly Needed, a 20/25 story hotel with at least 400 rooms would serve better and right next to the Convention Center.

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