For years Flower Mound was considered a bedroom community that drew few outside visitors needing a place to stay.
That’s a far cry from neighboring cities such as Grapevine, which boasts the third-largest non-gaming convention hotel in the nation with the Gaylord Texan, and Lewisville, which has more than 20 hotels.
The town finally entered the hospitality market in late 2017 with its first hotel—Courtyard by Marriott Dallas Flower Mound. It will be joined by five other hotels in the coming years. There are plans to build a Hilton Home2Suites Extended Stay Hotel, Tru by Hilton, Hotel RL and two hotels in the Lakeside Village development that have yet to be named.
This influx of hotels prompted Flower Mound Town Council to direct town staff at the Jan. 7 meeting to look into whether any more regulations are needed on hotels.
Home2Suites, for example, will be the town’s first extended-stay hotel. Council Member Kevin Bryant said the town does not have any limits on how long a guest could stay. Nor does the town have any development standards for hotels, he said.
“With the growing numbers of AirBnB across the region as well as the lack of a definition for an extended-stay hotel in our current codes, we thought it would be a good time to look at the language,” Bryant said.
The town’s hotel language
Tommy Dalton, Flower Mound Assistant Town Manager, said current regulations only define what hotels are and which zoning districts permit them.
“Generally, the Council asked staff to evaluate the town’s definition for hotels and determine if any changes are necessary,” he said. “Part of what we are evaluating is what the town can do to limit the [kinds of extended stay].”
Dalton said staff is still conducting research and looking at area cities for guidance. He said Lewisville requires a specific use permit if a hotel, motel or extended-stay facility includes a cooktop or oven in a guest room. Several other cities, including Frisco, Carrollton, Lewisville and Coppell, have specific regulations for extended-stay hotels.
“Frisco limits the number of zoning districts where extended-stay hotels are permitted and applies specific development standards related to the number of rooms allowed per acre,” Dalton said. “Frisco also requires on-site laundry facilities for guests, 24-hour on-site staffing, minimum amenities, and a 100-foot setback from a residential zoning district, among other requirements.”
Dalton said the town does have the right to limit how long a guest can stay at an extended-stay hotel. He pointed to Carrollton’s regulations that, in part, limit continuous and cumulative occupancy.
Staff is still evaluating appropriate regulations, and there is no set timeline for a proposal to council, Dalton said.
Any changes made to the town’s regulations would not apply to the hotels that have already been approved.
Supply vs. demand
The Hilton Home2Suites Extended Stay Hotel will be built across the street from Courtyard by Marriott Dallas Flower Mound—in the River Walk at Central Park development.
Amy Henrickson, general manager of the Courtyard by Marriott Dallas Flower Mound, said business was better than expected, with the hotel exceeding its budget by more than $100,000 in its first year. But she said she does not believe there are enough customers yet to support more hotels as of now.
“We aren’t at the point to where we are turning people away except for the holiday weeks,” she said. “We are more so typically the overflow for when Grapevine or Lewisville hotels sell out.”
Bobby Bowers, senior vice president of operations for STR, a hospitality industry data and analytics firm, said the area’s supply of hotel rooms has steadily outpaced demand since the firm started collecting data in 2012.
Bowers said hotel developers also take into consideration the area’s current supply.
“You have to think about what the existing supply looks like,” he said. “Are there some hotels that are obsolete or that are old and need to be replaced? Are they not maintained? Are not keeping up or being competitive? All of that plays a factor.”
Although demand is decreasing, Bowers said there are some indicators that the market could support new hotels.
“Occupancy rates are in the 70s, and rates are growing 7 percent annually—that means the market is pretty strong,” he said. “Those are the kind of things that attract development. Also, if you put a hotel near recreational opportunities like the mountains, the beach or lakes, or if you have a lot of corporations moving in, that will generate a lot of demand.”
Henrickson said the Courtyard’s top accounts derive from the town’s Lakeside Business District, which has several major corporations, and some companies coming soon, such as Thirty-One Gifts and PPG Paint’s distribution center.