Travelers will be big winners with Tuesday’s opening of the 1,100-room Hyatt Regency Denver at Colorado Convention Center, which experts say will cause downtown hotel occupancy rates to fall and discounts to rise.
The 37-story hotel – built by the city after private developers failed to do so – features amenities such as flat-screen high-definition televisions in every room and wireless Internet throughout, along with self-service check-in kiosks in the lobby, a restaurant and two lounges.
“What you’re going to find is that the market is going to be a little soft for the first two or three years with all these added rooms,” said Mike Cahill of Hospitality Real Estate Counselors, an Englewood real estate consulting firm. “In the short run, consumers are going to be able to find very competitive prices.”
But the $285 million hotel is still being greeted with open arms by Denver’s hoteliers, who widely agree that the hotel and the $310 million expansion of the convention center, which opened last December, were needed to boost the city’s profile among convention planners.
“They are really broadening the base of business that we can go after,” said Patti O’Keefe, general manager of the Denver Marriott City Center. “It should be good for everyone.”
Overall, business improved this year for downtown Denver hotels, which struggled after the Sept. 11, 2001, terrorist attacks and the economic downturn.
The average occupancy rate for 2005 is expected to be 67 percent, up slightly from 65.5 percent last year, estimated Robert Benton, publisher of the Rocky Mountain Lodging Report.
Average room rates are projected to perform better, up $8.50, from $121.50 to $130.
That number should increase again next year, to roughly $135, said Benton, because of the Hyatt Regency’s higher average room rate of $200 a night.
“A rising tide will lift all boats,” Cahill said. “Even if the occupancy goes down slightly, the average rate is going to improve because of the Hyatt pushing the rates.”
But lower occupancy rates overall should lead to slashed prices throughout downtown during off-peak times, namely winter months. The Hyatt Regency’s website offers an $89 nightly rate through Dec. 30.
“The new Hyatt is going to be the first-choice hotel for conventions coming to town,” said Eugene Dilbeck, executive director of the Center for Travel & Tourism at the University of Denver. “It’s the law of supply and demand. In the first two or three years, some discounting will come into play.”
And plans call for even more hotels rooms. Including the Hyatt Regency, downtown Denver’s 5,300-room hotel market is expected to grow by more than 2,200 rooms in the next five years, thanks to projects such as the 229-suite Residence Inn by Marriott opening next month at 18th and Champa streets and the 220-room Hilton Garden Inn planned for 14th and Welton streets.
“The market should be able to absorb all of these rooms,” Benton said. “The downtown market got up to 72 percent occupancy in the late 1990s, but I don’t think we’ll see that level again anytime soon.”
Existing downtown hotels have spent millions over the past few years preparing for the increased competition. The Westin Tabor Center spent more than $8.5 million to update its guest rooms and public spaces.
“Our own bookings are not on par for 2006 compared to where we were at the same time last year,” general manager Tom Curley said. “So yes, we will all see a reduction in occupancy based on the new inventory. But when you have high-quality new product, it makes your city much more competitive and much more viable overall.”
Staff writer Julie Dunn can be reached at 303-820-1592 or jdunn@denverpost.com.
Fireworks to follow ribbon-cutting
The $285 million, 1,100-room Hyatt Regency Denver at Colorado Convention Center will officially open Tuesday with a ribbon-cutting ceremony at 11:30 a.m., followed by a 5:30 p.m. illumination ceremony and fireworks display, both at 650 15th St. denverregency.hyatt.com
