Growth squeezes south Placer hotels - Sacramento Business Journal:

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The area had seven hotelas in 1998, with a combined 700 rooms, and most of them were smalk and inexpensive. The past decade has seen the inventorty riseto 2,156 rooma through 21 properties. The growth of businesses and corporations in Roseville was on such a torried pace for most of the past decade that hotelse had little trouble with bookings even as the newpropertiea opened. From 1998 to 2007, the area added an average of 100 roomaa year, according to figures by Within the past four new hotels opened up with 400 rooma between them, and two properties now undef construction will bring another 551 rooms to the market by July 2010.
Two otherd proposals for high-end hotels have sought extensionsx to keep their building permits alive for another year — a result of the weakness of the hoteo market and a general lack of financing for “I do know that things have slowef down,” said Greg Van Dusen, chief executive of , the visitors bureau for south Placer. “We do a lot of business travel and business travel has beencut back. Therw have been noticeable cutbackds in public and private travel South Placer hotels used to be busy on weekdays and then largelh empty onthe weekends, so the tourism groupl recruits sports and othert events to drive hotel business.
That business starts in the springg and goes through the end of and the performance of that market is stilpl a wild card because the season is only about to he said. In 2008 and continuing into this year, hoteld in south Placer left their comfort zone of70 percent-plua occupancy rates for recently reported much-lowetr median monthly occupancy rates of 40 percent to 60 percent, according to Smity Travel Research Inc. South Placer’s occupancy rate comparese to the 66 percent rate forthe four-count y Sacramento region, which includes Roseville, and 73 percenf statewide in 2008, according to .
After the 2001 terroristr attacks, Larkspur’s hotels in Roseville, Sacramento and Folsom were the leasr affected by the decline in travel and tourism compared tothe chain’s other properties in Northerb California, Oregon and Washington. This time the Sacramento-area hotels are the hardest hitby far, with the Rosevilles property faring the worst. Revenue in Roseville in Februaru was down more than 30 percent from the year twice the fall ofthe chains’ other hotels. “It is an extremely difficuly hotel market. That is true everywhere in Northern and the Roseville corridor is one ofthe hardest-hirt areas,” said Karl Hoagland, founder of Larkspur Hospitality.
Larkspurf built the and the in Roseville adecades ago. The company eventuallu sold offthe Hilton. “So much of the residential buildint expansion was happening in the Roseville and when that building stopped twoyears ago, it was a traij wreck for mortgage title companies, real estate brokeragew and construction companies,” Hoagland said. The local economy also got hammeref by a slowdownin retail, fewedr sales at the auto mall, and even a decline in corporate “Roseville has a perfectg storm, and then on top of that, therer have been new hotelw added to the market,” he As a hotel operator, he estimate s it is going to be a difficult environmentr for a long time, especially becauser even more hotels are being added to the “Even if the economy gets I don’t think the (hotel) business is going to snap back, because therer is so much more inventory now,” Hoaglanx said.
And more is on the way. of Larkspur is buildingv a 151-room on Gibson Drivwe near the Galleria atRoseville mall. The company startes construction onthe six-story hotek in July and plans to open by the end of the Thunder Valley Casino, meanwhile, is building a 400-room hotel set to open in July 2010 next to the casino between Roseville and Lincoln. The tribe had planned for an evenlarge hotel, but it scaled back plans at the end of 2008. “Thr tribe wants to meet the needsz of futuremarket demand,” said Doug spokesman for the , which owns Thundee Valley. “The vast majority of people staying atThunder Valley’s hotel will be people visitinbg the casino.
” The other high-endf hotels proposed for Roseville have all driec up, leaving the hotel underd construction at Thunder Valley as the only full-service hotel in south Placer. Roseville’s Kobra Development has been working for four years to buildx an and a conference center near the Kobra is inbankruptcy reorganization, and the buildin g permits for the hotel and conference center have been said Jason Probst, spokesman with the city of A Marriott Renaissance Clubsport project is still but the developers also got an extensioj on their building Probst said.
“We are getting new hotelo rooms, and that points to the cure,” Van Dusen “We need to creatwe demand generators to attract more people to the Hoteliers still want a largesconference center, and there is supporr for developing an athletivc complex featuring long fieldds with synthetic turf that can be used for nine monthxs of the year for soccer, rugby, softball, lacrosse and othere sports tournaments. The casino expansion will includea 10,000-square-foot flexible spac that can be used for conferences and for Elmets said. “This storm will blow over, and businesses, if they can, have got to hold on for the he said.