Fred Domenick, general manager of The Woodlands Waterway Marriott Hotel and Convention Center, said due to the recent growth in jobs and events held in The Woodlands, hotel revenue in the community has experienced an increase that is not expected to slow down anytime soon.
“Our hotel tax revenue has had a dramatic growth due to current supply and rates in the market,” Domenick said. “Companies such as ExxonMobil are a demand generator for us, and group business in [The Woodlands] has remained robust. There are constantly new conventions and groups coming into the market.”
According to Visit the Woodlands, previously known as The Woodlands Convention and Visitors Bureau, The Woodlands Township’s hotel occupancy tax collections per year have been rising since 2010, with about $8.72 million in hotel tax revenue collected in 2017, a 10.7 percent increase from the previous year.
The city of Shenandoah has also seen its hotel tax revenue increase, with $1.2 million collected in 2017, a 9 percent increase from the previous year.
“Overall, even though the oil market had gone down, the market remains healthy for the hotel economy,” Domenick said. “We’ve been fortunate for the demand. More companies spur growth.”
Upcoming projects, challenges
The Woodlands and Shenandoah have had five more hotels open over the past two years, with more hotel projects expected this upcoming year.
Domenick said while smaller projects—like Hotel Blue The Woodlands, which opened in mid-April just north of Rayford Road—are expected to take on additional overflow from The Woodlands, larger upcoming projects, like the Marriott CityPlace at Springwoods Village, will also have an effect on the local hospitality industry.
The first full-service hotel within the Springwoods Village community, Marriott CityPlace will offer 337 rooms and is expected to open this fall. The hotel is a key component of CityPlace, a 60-acre mixed-use district in Springwoods Village, located near I-45 and the Grand Parkway. Developer Woodbine Development Corporation partnered with CDC Houston and USAA Real Estate Company on the project.
“This Marriott will not only grow the area’s room count, it will also diversify the mix of accommodations and event space available here, allowing this thriving community to better serve business and leisure travelers,” said King Scovell, managing partner and chief development officer for Woodbine.
Officials with the city of Shenandoah, which has opened two new hotels since 2016, said the city still has plans to open at least one more new hotel this year.
Jackie Thompson, community development manager for Shenandoah, said Aloft Hotel is under construction along David Memorial Drive and is expected to open in the first quarter of 2019 with 116 rooms. The city also has plans to add a Hampton Inn in Shenandoah on the west side of I-45 in the future, although a date has not been set.
Additionally, new hotels in MetroPark Square, Shenandoah’s new 69-acre mixed-use development under construction southeast of the intersection of I-45 and Hwy. 242, were announced in early May.
Daniel Moon, vice president of Sam Moon Group, the owner of the land for the new development, said MetroPark Square could soon be home to three new hotels: Hyatt House, The Hyatt Regency and Tru Hotel.
Moon said while Hyatt House is confirmed for the development, Hyatt Regency and Tru Hotel are still being negotiated. A construction date has not yet been announced for Hyatt House.
Thompson said since Shenandoah is positioned along the I-45 corridor, the city provides more access to area amenities and premier lodging brands.
“As businesses continue to relocate to the area, hotels will continue to be an integral part of the economy,” she said. “Additionally, the southern part of the county is becoming a premier destination for medical services. For this reason, the need will remain strong for short-term lodging.”
However, not all hotel projects in the area have been approved by the city.
The Cambria hotel and Even Hotel, two projects planned in Shenandoah’s city limits, have been indefinitely delayed, Thompson said.
Thompson said the Cambria and Even Hotel had special-use permits issued previously that have now expired and are not permitted for construction. If the hotels want to move forward with construction, then developers will have to reapply for the permits.
The city of Oak Ridge North also had a hotel commitment fall through in late 2017. The Crowne Plaza Hotel & Conference Center was originally scheduled to open in mid-2017 at the intersection of I-45 and Robinson Road but was not developed as planned.
Mayor Jim Kuykendall said the news was disappointing for the city as he believes it was an important economic development opportunity.
Heather Neeley, director of economic development for the city, said the former site of the hotel is now on the market again with HFF Properties, which is a large commercial real estate intermediary.
Despite these losses, officials in The Woodlands and Shenandoah are still optimistic about future development in the area.
Bruce Rieser, township director and Visit The Woodlands chairman, said the area will continue to bring in new developments due to the local economy.
“Hotel revenues and rates are still strengthening, and the biggest reason why is community development, the oil market is stabilizing and the medical community is growing,” Rieser said.
Gil Staley, CEO of The Woodlands Area Economic Development Partnership, said as a result of more business conventions and visitors in the area, full-service hotels have evolved to feature more amenities to attract guests.
Since 2016, the area has seen nearly 1,000 rooms added to the market from five new hotels, in addition to short-term rentals, such as Airbnb rooms, which have become a presence in the community as the hospitality industry grows, he said.
“In the past few years we’ve seen full-service hotels change dramatically, they’ve seen a big impact from [growth],” Staley said. “While Airbnb rentals are another niche market, it is also doing very well now, and it compliments hotels here.”
Wendi Gelfound, area director of marketing for The Howard Hughes Corporation, who developed The Woodlands’ newest hotels—Westin The Woodlands and Embassy Suites by Hilton The Woodlands, said to keep up with demand The Howard Hughes Corporation has renovated and planned for new amenities for its full-service hotels in The Woodlands.
“We are creating a brand-new restaurant at The Westin The Woodlands that will open in November,” Gelfound said. “It’s going to be a community-oriented modern Italian kitchen.”
Gelfound said Robard’s Steakhouse, which is located within The Woodlands Resort and Conference Center, has also undergone a massive renovation.
“We put in a bar and new decor,” she said. “We are hoping to attract more foodies from the Houston area, and we wanted to enhance the offerings at the resorts.”
Branding the area
So far in 2018, 9,490 visitors have been tracked in The Woodlands, with guests coming from around Texas, other states and other countries, according to a report collected from The Woodlands Mall Guests Services and issued by Visit The Woodlands.
While the area has long found success as a destination for business, The Woodlands Township and hotel officials are looking to boost travelers coming to the area for pleasure to diversify the customer base.
Gelfound said the Westin The Woodlands and Embassy Suites by Hilton The Woodlands have been open for about two years, and she believes they have been successful due to high business travel trends. However, The Howard Hughes Corporation is looking to attract more guests staying in the area for fun.
“Both hotels are largely business hotels and occupancy has done very well,” Gelfound said. “Our goal is to keep increasing leisure business. Conferences and meetings are still key, but we are making a huge effort to go after leisure events.”
Rieser said the township is looking to bring more tourism opportunities to the community, which will support the local hospitality and business scene.
He said to enhance The Woodlands as a leisure destination, Visit The Woodlands has started participating in national trade shows, such as South by Southwest, an annual conglomerate of film, music festivals and conferences that takes place in Austin.
“We’ve been going out to national trade shows to get The Woodlands name out in the leisure and business market,” he said. “We are already in the running for events to be held here in the next couple of years.”
Rieser said hotels located in Town Center are within walking distance to shopping and dining amenities , which he believes give The Woodlands an advantage among competition.
“We’re all working to bring people to this destination,” said Gelfound, who also serves on the advisory committee for convention development for Visit The Woodlands. “The more people you attract here for jobs, then the more they spend on the town.”