Hotel development takes off

by Paula C. Squires
for Virginia Business
September 2006

Hotel construction is booming in Virginia. New hotels are going up across the state, with projects backed by Virginia and out-of-state developers.

Richmond-based Shamin Hotels, one of Virginia’s largest hotel operators, plans to build nine hotels during the next two years. Eight of the hotels are targeted for Central Virginia, with six in Richmond and two in Colonial Heights. The ninth property, a Hampton Inn, is planned for Coliseum Drive in Hampton.
Shamin Hotels finds the Richmond market attractive, says company COO Neil Amin, because it’s not overbuilt and opportunities remain in many areas.

Many of the area’s full-service hotels are old, he notes. Plus, the area is growing. “The big benefit about Richmond is that families settle here for the long run. … More companies realize that and are coming here. We’re working with developers out of New York who like Richmond for that same reason. It’s not boom or bust.”

Shamin Hotels’ biggest project will be a $54 million Hilton near Short Pump Town Center in western Henrico County. The 248-room hotel is expected to have a restaurant, spa and more than 22,000 square feet of meeting space. Construction gets under way this fall, with the opening projected for 2008.

In Hampton Roads, an already competitive market continues to see new players. A new, 256-room Newport News Marriott Hotel and conference center opened in June at City Center at Oyster Point. Construction is well along on the Westin Hotel at the Town Center of Virginia Beach. Seventeen of 38 floors are up, creating a new skyline for the mixed-used center. The $183.6 million public/ private project will include first-floor retail, parking, a 10-story hotel, 20 floors of condos and top-floor penthouse suites.

The hotel portion of the project is expected to open in fall 2007. “When completed, this will be the tallest building in Virginia and the only four-star hotel in this part of the city,” says Danya Bushey, marketing manager for Armada Hoffler in Virginia Beach, developer for the Town Center.

In Northern Virginia, Intercontinental Hotels Group is expanding its portfolio with a new extended-stay property in Manassas. The company plans to build an $8 million, 100-room Candlewood Suites hotel just off I-66, minutes from Washington Dulles International Airport. Construction will begin this winter, with the property expected to open at the end of 2007.

On the sales side, strong occupancy rates are boosting hotel transactions. The Newport News-based Mumford Co. recently completed the sale of 12 properties in 10 states — all separate transactions — with an aggregate value of more than $30 million.