Post-pandemic hotel building boom in full swing in Tri-Cities as Hilton lands new site
A post-pandemic hotel building boom has arrived in the Tri-Cities.
A couple of Wyndhams are coming to Pasco.
An Aloft in Kennewick.
A LivAway in Richland.
The latest addition to the local hotel pipeline is a Hilton-branded project in Pasco.
Hotel construction was up 9% nationwide in early 2023, according to Lodging Econometrics United States Construction Pipeline Trend Report.
The national pipeline includes nearly 5,600 projects with 660,000 rooms. And some are here in the Tri-Cities.
The latest addition to the list is a 107-room Home2 Suites by Hilton, slated for a site at the entrance to the Tri-Cities Airport in Pasco.
Pasco’s A-1 Hospitality Group LLC will build the hotel on West Argent Road, between its existing Courtyard by Marriott and a Circle K to the west.
A-1 Hospitality, led by president Vijay Patel and son, Taran Patel, managing principal, will lease the 3-acre site from the Port of Pasco.
The port commission approved the 75-year lease, which includes a 50-year initial term and 25-year option to renew, at its regular meeting Wednesday.
Industry roars back
The proposed Hilton is the latest in a string of hotel projects emerging in the Tri-Cities after a lull caused by the COVID-19 pandemic and a slowdown in demand for hotel rooms.
In August, JMS Development, the port’s Osprey Pointe developer, signed franchise agreements for two Wyndam-branded hotels with nearly 400 rooms near the Columbia River.
LivAway Suites is proceeding with a 126-room extended-stay hotel near Columbia Center, in Richland. And A-1 has separate plans for an Aloft-branded tower hotel at Three Rivers Convention center in Kennewick.
Visit Tri-Cities recently released a 2024 outlook that indicates that the Tri-City market is one of the strongest in Washington, maintaining pre-pandemic occupancy rates despite a slowdown it traced to “inflationary pressures.”
Tri-Cities hotels operate at an average occupancy rate of 66.7% and recorded an average room revenue of $80.77. That’s 12.4% higher than last year and the second highest growth rate in Washington after Seattle.
Growing to-do list
Home2 Suites is the second project in A-1 Hospitality’s pipeline.
The Patels recently updated the Kennewick City Council on a separate project, its ambitious plan for a six-story Aloft-branded hotel at the Three Rivers Convention Center.
The Kennewick project depends on the city progressing on a expanding the convention center. Nevertheless, A-1 indicated it wants to break ground in the spring.
A-1 Hospitality, based in Pasco, operates a portfolio of 10 hotels that includes the Columbia Gorge Hotel in Hood River, Oregon, and the Holiday Inn Express Pasco, among others.
Taran Patel wasn’t available this week to discuss the Hilton project, but promised to share more information in October.
Courtyard echoes
In Pasco, A-1 previously partnered with the port to build the 99-room Courtyard by Marriott, signing a long-term land lease that sees it pay the port a combination of rent and a share of the gross revenue.
The new land lease echoes the Courtyard one.
The agreement gives A-1 Hospitality 18 months to secure a building permit from the city of Pasco. The company expects to spend about six months on design and 18 months on construction.
It will pay the port a $42,000 nonrefundable deposit, which is equal to 18 months of its base rent of $28,000 per year.
The port will receive a percentage of the gross revenue earned by the hotel, starting at 1% when it opens and rising to 1.25% in the second year and 1.5% in the third.
A-1 retains the exclusive right to develop a third hotel at the Tri-Cities Airport Business Park for 10 years or until the Hilton property reaches an average 80% annual occupancy rate.
Pandemic survivor
The port indicated it is confident A-1 will succeed.
The Courtyard by Marriott opened in Februrary 2020, weeks before the COVID 19 pandemic restrictions that halted all but the most essential travel.
The Patels kept the hotel open in part by offering deep discounts to local medical workers who didn’t want to go to their homes for fear they would expose their families to the virus.
“A-1 Hospitality has proven to be a strong partner with the port, having successfully weathered a global pandemic while opening the Courtyard Marriott. The company has continually enjoyed brisk business at the Courtyard and is confident the new Hilton project will experience similar success,” the port said in the lease agreement.
Home2 Suites by Hilton is an extended-stay hotel that features kitchens with full-sized appliances to facilitate longer visits and movable furniture.
Home2Suites properties offer free breakfast, outdoor grills and a limited market selling snacks and daily essentials. They typically include fitness and laundry facilities, pools and pet-friendly policies.
Home2 Suites by Hilton will be the fourth hotel clustered around the entrance to the airport, which is at 20th Avenue and West Argent Street.
In addition to the Courtyard property, there is a Best Western Inn and a Red Lion hotel.
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