Downtown Dayton sees hotel expansion, investment

The recent hotel growth in downtown and near the University of Dayton has made the city more competitive in attracting and retaining major events like the NCAA First Four.

Hundreds of new rooms have come online or been proposed for Dayton in the past several months. That’s an indicator of how healthy a community is, said Terry Baltes hotel broker and owner of Baltes Commercial Realty.

Business development in downtown Dayton has been the biggest driver of hotel growth, he said, especially amid a healthy economy with low unemployment and more job competition.

Dayton is a great place to host a high-profile sporting event, said Chris Kershner, vice president of the Dayton Area Chamber of Commerce.

“We have to ensure that we have the infrastructure to support it,” he said. “And I think the increased hotel capacity in the Dayton region will absolutely support events like the NCAA First Four, but will also continue to support other conferences, as well as business travelers.”

Downtown Growth

Several businesses near Dayton hotels are growing and projects like UD and Premier Health’s redevelopment of the former county fairgrounds are driving guests to area hotels, said the UD Marriott General Manager Ben Haller.

Taylor Communications moved 600 employees into Downtown Dayton when it relocated to the Central Business District in 2017. Caresource has said it will add 650 new jobs in Dayton over three years beginning in 2016.

Stratacache recently purchased the Kettering Tower, downtown’s tallest building, for $13 million and bought the Courthouse Plaza tower for nearly $1.7 million. Along with those purchases, the digital signage and monitor company has told the Dayton Daily News it will add 300 jobs here.

Development on the Dayton Arcade project is also sparking hotel interest, Baltes said.

“You are centralizing the demand for hotel space, and all of those businesses want to have close, high-quality hotel space for their business travelers. The demand is there and the market is responding,” Kershner said.

Hotel investment

The first new downtown hotel in decades — the Fairfield Inn & Suites — opened with 98 rooms at the corner of Monument Avenue and Patterson Boulevard in October. It was the first since Stouffer’s Dayton Plaza Hotel, now the Crowne Plaza, opened in 1976.

A Holiday Inn Express & Suites at 2140 S. Edwin C. Moses Blvd. added 96 rooms when it opened in October.

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A new 118-room boutique hotel is planned for the 10-story Barclay building formerly anchored by Miller-Valentine Group. The Barclay developers are currently looking for funding, including requesting $4.75 million in state historic preservation tax incentives.

A second boutique hotel is envisioned for the Price Stores building as part of the Fire Block District redevelopment, said Eric VanZwieten, spokesman for the developer Windsor Companies.

Developers of a potential 100-room Hampton Inn & Suites on Edwin C. Moses near Elizabeth Place are also still looking for funding, Dayton’s planning manager Tony Kroeger said.

“Everybody keeps scratching their head and saying, ‘Man, this (increased hotel development) has been a long run. How soon is it going to end because it always does?’ But it still is very, very healthy,” Baltes said. “Are we getting close to the tail end of the cycle? Probably. But every year the same questions come up. And everybody keeps saying, ‘You know, it looks good for the next two years.’”

The University of Dayton Marriott also wrapped up a $23 million renovation at its 399-room hotel in late 2017. Other hotels in the greater downtown area include the 287-room Crowne Plaza and 101-room Courtyard by Marriott.

The UD Marriott has seen revenues jump from $15 million five years ago to about $19.5 million at the end of 2018. Occupancy also increased 5 percent over the past five years, Haller said.

“The Dayton area has had capacity for a long time to expand its hotel network and today we are in a time when the economy is lending itself to those expansions,” Kershner said.

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Continuing the cycle

New event centers like the recently opened Steam Plant at 617 E. 3rd St. and upcoming Grande Hall in the historic Liberty Tower are drawing weekend travelers for weddings and other events into Downtown Dayton, Baltes said. Hospitals, colleges and convention centers also will always fill some rooms.

Crystal Robertson was staying at the new Fairfield Inn by Marriott near the Dayton Dragons Stadium last week. She’s based in Michigan but every week she travels somewhere new in the Midwest and Northeast United States for work.

She chose to stay downtown because of its proximity to Dayton Children’s Hospital, where she’s working this week. It was the second time she had stayed at the hotel this year.

“Usually there’s a Marriott close to a hospital and they give hospital rates as well,” Robertson said.

Developers of the Fairfield Inn said it’s location within walking distance of the thriving Water Street District, Oregon District and recently opened Levitt Pavilion is a major benefit.

"When people choose a hotel , they want to be able to walk to entertainment and dining. Getting some of those new support services established downtown makes it pretty exciting. It's just a natural evolution that as you have these new support services rising up, you have new hotels … business kind of breeds business," Baltes said.

Montgomery County has had plenty of hotel space to host major events, said Jacquelyn Powell, president and CEO of the Dayton Convention and Visitor’s Bureau. But when large groups look for a city to host events in, she said they look at how many hotel rooms are available within a three-block radius of the convention facilities.

There are no definitive plans to build in the immediate convention center area, she said, but there are discussions happening among hotel developers.

Benefits to the city

The diversification of local hotels is key, Powell said.

“(Visitors) are looking always at choices based on what their budget might be or what amenities are offered at a particular hotel property,” she said . “ So the opportunity to provide choices for people who are traveling into your community is certainly something that I’m sure developers are looking at.”

Dayton has long been ready for updated hotels with the amenities that travelers want, Baltes said, including indoor pools, breakfast, an exercise room, flat screen televisions and other aspects that make guests feel like they never left home.

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The new hotels also benefit existing companies and residents when visitors also spend money on gasoline, retail and food, Powell said.

“They’re bringing outside dollars into our community and leaving that money behind here,” she said. “That makes for a better quality of life for all of us who are residents because that’s an influx of tax money that is coming from outside of the community.”

Taxes flow to the city and county through sales taxes on purchases travelers make, as well as a 3 percent lodging tax in Dayton and a 3 percent lodging tax to the county. A task force has proposed boosting the lodging tax to 6 percent to help pay for renovation of the Dayton Convention Center. The county does not provide direct financial support to the convention center, but sends the bulk of its lodging tax share to the Dayton Convention & Visitor’s Bureau.

More rooms in the city will make for more people staying in Montgomery County during the massive Winter Guard International that often fills rooms in other counties to accommodate all of the participants.

"There's enough of a nucleus now that's been rejuvenated that it's all going to keep growing now," Baltes said. " Everywhere you look , there's there's some sort of a project going on."