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Flurry of city hotels undergo makeovers: At least a half-dozen properties get big renovations

November 12, 2007

The managers of many downtown hotels are sinking millions of dollars into their properties, hoping to burnish product that will soon compete with roughly 2,340 rooms in several new hotel construction projects.

And while regular renovations are the lifeblood of the hotel industry, experts say the market's rash of big-ticket overhauls is also a defensive move.

The biggest competition for existing hotels is likely to come from the $325 million J.W. Marriott complex, which will include the city's largest convention hotel and a total of 1,568 rooms if it opens as planned in 2010.

"We always see that with new pushes for construction, there's more renovation," said Rob Hunden, president of Chicago-based hotel consultant Hunden Strategic Partners. "As new hotels come on line, others need to polish up."

The latest renovation is a $10 million project at the downtown Marriott owned by Maryland-based LaSalle Hotel Properties and managed by Merrillvillebased White Lodgings.

Starting in mid-November, the owners are replacing the carpeting and vinyl in the corridors and guest rooms along with draperies and bedding and adding some furniture and design tweaks in the bathrooms, according to LaSalle Chief Operating Officer Michael D. Barnello.

It's the property's most substantial revamp since it opened in 2001.

"We classify [the renovation] as a repositioning, more of a refresh," Barnello said, adding that the addition of more rooms in the market didn't factor into the decision to undertake the project.

Hotel industry watcher Mark Eble, regional vice president for Philadelphiabased PKF Consulting Corp., said brands are asking more of owners and sending brand mandates out more often.

"Brands are extremely demanding of their owners and are getting tighter and tighter all the time," he said.

Some hotel managers say their projects go beyond the traditional upkeep and are timed to get the property ready to compete with newcomers.

"We need to update our facility," said Dale McCarty, general manager of the downtown Westin. "With the new competition coming to town, now works out to be the best time to do it."

The Westin's $6 million renovation will start in December and will focus most heavily on its 40,000 square feet of meet- ing space. The work will be done by the end of March and will be the biggest renovation in six years. The 573-room hotel opened in 1989 and is owned by Maryland-based Host Hotels and Resorts Inc.

Over at the downtown Hyatt Regency, the final touches are going in on a $13 million renovation that added a new lounge, and a new ballroom on the third floor in what was formerly a restaurant, plus created a new restaurant on the first floor that opened Nov. 16. The lobby got a major face-lift with new white-stone interior facades, a new front desk and contemporary furniture.

"We wanted to bring our standards up to the competition and be positioned to be one of the best hotels even after the addition of the J.W. Marriott," said General Manager Brian Comes.

Comes said the addition of the ballroom and other changes were geared toward making sure the property could handle intown meetings during the few years the Indiana Convention Center may not attract as many large conventions because of construction.

"We can accommodate more of that during the next two years when we have fewer city-wide groups," he said. The hotel, which is owned by Chicago-based Hyatt Equities LLC, did a major room renovation in late 2002 and will tackle that again in 2009, Comes said.

At the downtown Sheraton City Centre, the repositioning was more drastic. The $10 million project, which wrapped up recently, included dropping the Radisson brand on July 11. The new moniker-Sheraton-is a brand of New York-based Starwood Hotels and Resorts. The 378-room property is owned by Dallas-based Ashford Hospitality Trust and managed by Dallasbased Remington Hospitality Services.

"We felt like the Starwood brand was underserved in Indianapolis," said Roger Aufieri, Remington's executive vice president of operations. "It will be a great advantage tying into Starwood's sales engines."

The owners tore out six rooms to make space for a 24-hour executive lounge for premier guests, complete with food and plasma televisions. It redid the lobby and fitness area, and replaced the soft goods in guest rooms. Next year, the ballrooms, business center and meeting rooms will be reworked.

Aufieri said strong lodging business nationwide has meant hotel owners can afford upgrades. The changes in Indianapolis aren't a reaction to new hotel rooms in the pipeline, but to changing consumer demands, he said.

"[It's] indicative of what customers are asking for," he said. The changes "are nothing to do with development and everything to do with listening to the customers."

Jeff Brown, CEO of locally based Schahet Hotels, said his company's goal is always to make changes gradually so customers don't see extreme changes.

"If guests see major changes, that means it either got really bad or we're going for a totally different look," Brown said. "We want our changes to be more subtle."

The downtown Hampton Inn just got a new lobby and window coverings in all 180 rooms. Last year, Schahet replaced all the carpets. Brown said none of the changes had to do with new projects.

"We look at our hotel individually," he said. "We wouldn't wait until there's a J.W. Marriott and then say, 'OK, we've got to do something now.'"

Not just downtown

The renovation sweep is reaching out to perimeter hotels that handle overflow convention business coming from downtown.

At the Marriott East, near the intersection of interstates 70 and 465, Floridabased owner Joseph Schwarz is investing $7.5 million to build a six-story addition that will add 60 rooms and 8,500 square feet of meeting space.

The new room will bring the hotel's total meeting space to 57,000 square feet, the largest in the city, according to General Manager Brent Myrick.

With the ongoing construction on I-70, it made sense to do the project now, Myrick said. The new wing will open by the end of this year and leave the property in a good position for when larger convention crowds hit town.

"We're only seven minutes from downtown," he said. "We see a lot of convention business."

Hunden said he wouldn't be surprised to see even more of these projects roll out as the large-scale projects get closer to opening in late 2010.

"There's a consistent schedule for renovations, but with the new product, there's even more pressure to live up," he said.
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