Targeting Locations for Convention Center Hotel Development Should the independent analysis confirm the feasibility and profitability of a convention center hotel based on the city’s preferred level of investment, the city should target the following two locations for development, in order of priority: 1
CONVENTION CENTER HOTEL STRATEGY
Arena District Master Plan
Downtown Tulsa’s hotel market has experienced a wave of new development since 2009, increasing the hotel room stock by approximately 40%. Hotel rooms sold also increased by approximately 40% since 2012, yet the biggest jump took place between 2012 and 2014 with minimal growth since. Similarly, revenue per available room (RevPAR) increased by nearly 30% since 2012, but the majority of this increase had occurred by 2014. Since then, RevPAR has grown only 5%. Belying this trend, occupancy increased each year from 2012-2014, but has since declined, falling to 61% in 2017. The falling occupancy rate in particular indicates that the market is becoming saturated.
154
Evidence from other markets indicate that it is possible to absorb a convention hotel without sacrificing overall occupancy, provided convention business increases in tandem. However, given increasingly competitive convention and meeting dynamics in the state and nation, independent analysis of the potential for expanded convention center activity will be necessary to confirm that a convention hotel can induce additional demand that grows the market.
2
Site 1 - The block immediately to the South of the Aloft Hotel. This site is city-controlled and can be targeted for a later intervention providing the city with additional time to develop a comprehensive strategy for convention center upgrades in conjunction with the delivery of this new hotel. In addition, the city could include funds for the development of this hotel in a future bond issuance, giving it more time to understand the full financial needs of the hotel, but this site would require the relocation of existing users to new facilities. Site 2 - The block immediately to the North of the Aloft Hotel. This site’s main advantage comes from its centralized location between the Convention Center and the BOK Center, which would further contribute to the new core of the Arena District. This site, however, will not be ready for redevelopment until at least 2024 when the GSA’s lease in the Pager Belcher Federal Building expires. The city would then need to include funds for development in a future bond issuance, which could potentially lead to the site sitting empty for a few years while funding and then a developer is secured.