Prior to the 1990s, hotel space in Providence was so limited that the state itself had to build The Westin Providence to support the R.I. Convention Center. Since that time, as the city has undergone its renaissance, several hotel properties have been added.
But with nearly 500 rooms slated to be added in coming years and other projects proposed for the capital city – as well as a tapering occupancy rate – is the market in Providence becoming too crowded?
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According to Smith Travel Research, Providence’s room occupancy rate has dipped since 1999, when it reached 79.3 percent. Hovering around 70 percent since 2004, the rate reached a six-year low of 67.2 percent in 2005.
While Boston-based Pinnacle Advisory Group principal Rachel Roginsky told Rhode Island hospitality leaders in March that future projects such as GTECH Corp.’s relocation to Providence and the renovation of the Dunkin’ Donuts Center would boost hotel occupancy rates in the city, she said that statewide the supply is growing faster than demand.
State Tourism Director David C. DePetrillo isn’t worried yet. He said the increase in rooms is necessary to support all the residential and corporate development projects downtown.
“Tourism infrastructure is key to future development,” DePetrillo said. “Our growth without hotel infrastructure would be limited.”
DePetrillo also noted that despite the dip in occupancy, Providence still enjoys the highest occupancy rates in New England and among the highest in the nation.
Some of the decline can be attributed to the slowdown in business travel since 2000, DePetrillo said. But he added that recreational and convention travel remains strong, and he anticipates business travel returning in the coming years.
In fact, DePetrillo touts that the state witnessed its third consecutive annual increase in tourism spending in the state in 2005; however, the 1.7-percent increase, to $4.77 billion, was less than the rate of inflation.
Providence currently has 1,726 hotel rooms, according to Kristen Adamo, spokeswoman for the Providence Warwick Convention & Visitors Bureau. About 60 percent are in hotels that pre-date the Westin: at the Marriott Providence, the Providence Biltmore Hotel, the Holiday Inn Providence and the Radisson Hotel Providence Harbor.
It took almost seven years after the 364-room Westin was completed in 1993 to get another major hotel in the city, the Courtyard by Marriott, which opened in 2000, with 216 rooms. Last year, the Hotel Providence opened with 80 rooms, and the Dolce Villa opened with 14. Two projects already under way, the Westin expansion and the Renaissance Providence Hotel, will bring the room count to 2,200. In addition, two more hotels have been proposed for downtown that would add about 160 and 120 rooms, respectively.
Altogether, that would result in a nearly 44-percent increase in the number of rooms.
The Procaccianti Group, a Cranston-based real estate developer with major hotel properties across the country, is involved in two projects in the city right now: the Westin expansion, slated to be completed by mid-2007, and the transformation of the Holiday Inn into a luxury Hilton hotel (the number of rooms will hold steady).
Procaccianti is investing nearly $140 million in the Westin and $25 million in the Hilton.
Company spokesman Ralph Izzi said the timing seemed right because of the growth in Providence in recent years.
“Providence is becoming a jewel of the Northeast,” Izzi said. “It’s a great space, and the demand for hotel rooms still exists.”
The Renaissance project, which will add 274 rooms, is transforming the long-abandoned Masonic Temple into a luxury hotel. On Washington Street in the heart of downtown, meanwhile, Kansas-based LodgeWorks has proposed building a 160-room Sierra Suites extended-stay hotel with a parking garage.
This month, Johnston-based Carpionato Properties Inc. presented plans to the Design Review Committee of the Capital Center Commission for an 18-story, 120-room hotel on a small parcel in the Capital Center district.
The hotel, if built, would be Carpionato’s first attempt at a project in downtown Providence; it’s already the owner of the Crowne Plaza Hotel and the Holiday Inn Express in Warwick. Executive vice president John Kokot said the downtown hotel would meet a need in the city.
“We felt that this particular site would make an ideal location for a hotel,” he said, “and we wanted to have the hotel presence in downtown Providence.”
Adamo, of the visitors bureau, said the growth in hotel rooms will help the organization as it tries to attract larger events to the convention center. The building had always been large enough, she said, but hotel space has been limited.
“The construction also puts a perception in the public that Providence is growing and changing,” Adamo added. “That helps when we are marketing as well.”
DePetrillo said he is pleased with the quality of hotel developers looking to invest in the city. While the city had previously undergone a renaissance that included the creation of the Westin, the private investment shows support for the new Providence rebirth, which includes the relocation of Interstate 195 and the renovation of historic buildings, he said.
“Rhode Island and Providence in particular are on an upward swing,” DePetrillo said. “I think they see good things happening.”
