Hotels are popping up in Tulsa at a rate twice as fast as the rest of the country.
Hotel rooms in the city increased about 14.3 percent from June 2013 to June 2018, according to STR, a data analytics firm that examines trends in the hospitality industry. The percentage growth for the United States during the same period was roughly 7.14.
“The whole industry, not just in Oklahoma but in the country, is experiencing huge growth,” said Ray Hoyt, senior vice president of regional tourism at the Tulsa Regional Chamber. “There are communities that are our competitors that are building thousands of rooms — Nashville, Fort Worth — but their market is supporting it.”
Tulsa went from 14,304 hotel rooms in June 2013 to 16,414 in June of this year, according to STR. And the volume is getting larger.
Four hotels are scheduled to open downtown in the coming months.
The Downtown Residence Inn & Suites is slated to open at the end of September, and the following month will see the opening of Hotel Indigo, an $18 million, 93-room boutique hotel on Elgin Avenue between First and Second streets.
A five-story Holiday Inn Express on Archer Street between Detroit and Elgin avenues is scheduled to open in January or February, said Pete Patel, CEO of Promise Hotels. Patel is partnering with Tulsa-based contractor Ross Group on that hotel as well as the Hilton-branded Curio, a roughly $33 million conversion of the long-dormant Tulsa Club building into a 96-room boutique hotel.
The Curio is expected to open during the first quarter of 2019, Patel said.
“Downtown has probably grown faster in proportion than any part of town,” he said, alluding to the more than $1 billion of public-private development in the past decade. “The success of the BOK Center has made us bullish on downtown, as well as when our energy companies are doing well.
“There is a lot of travel now back in the industry, and that really helps our occupancy. “
Occupancy rates for Tulsa went from 57.7 percent for year-end 2013 to 54.4 percent at the close of 2017. During that same span the price of West Texas Intermediate crude oil, the benchmark of the energy industry, went from an average of $97.98 to $50.88.
“In Tulsa, for sure, with a drop in the energy market, a lot of business travel was cut or reduced,” Hoyt said. “That hurt our market. And people don’t realize, every time you add 100 rooms to the market, it’s not just 100 room nights, it’s 100 room nights times 365 days. So when your inventory exceeds your demand, basically what happens is the rate drops and then the occupancy drops.”
Increased lodging aside, Hoyt said the market can bear more, particularly of the full-service variety.
Those hotels maximize amenities to provide an all-encompassing experience, although at a higher price. They often provide laundry and shuttle services, restaurants, large spa or fitness facilities, room service, a concierge and extra staff to help with luggage.
Curio and Hotel Indigo will be full-service hotels, but they will be the first ones — aside from gaming hotels such as the Osage Casino (which is scheduled to open this month) — to be built in town since the Renaissance Tulsa Hotel & Convention Center in 2003, Hoyt said.
“We’re getting the convention space remodeled in the old arena (Cox Business Center), and that’s important,” Hoyt said. “But it’s still leaves us pretty short on space when you look at Oklahoma City, Fort Worth, Louisville. With the cities we compete against, we’re still probably short when it comes to convention space and full-service, convention hotels that are adjacent or in close proximity to our convention center.
“It’s a competitive business and a competitive market. If somebody has something more suitable, then they (conventions, shows) go to where they get the most bang for the buck or the most space or the most hotels.”
Vanesa Masucci, vice president of VisitTulsa, said: “Large conventions don’t want to be in too many hotels because it makes it harder to manage. And they certainly don’t want to have to pay for any shuttling or transportation because that adds a whole different dimension of cost to the actual conference.”
With a population of about 643,000, Oklahoma City is about 60 percent larger than Tulsa. And as of June 2018, according to STR, it had 26,514 hotel rooms to Tulsa’s 16,414.
That is not including a $235 million, 605-room Omni Hotel being built as part of a new convention center in Oklahoma City.
“If you look at the size of the new hotels, especially downtown (Tulsa), they are not big hotels,” Patel said. “Compare us to other markets — Oklahoma City, even markets like Little Rock — they have a lot larger supply than we do.
“I’ve heard people say, ‘Are you worried about too much inventory?’ Absolutely not. I’m not saying we need 10 mega hotels. But I don’t know if we should be too overly concerned about oversupply with the fact that we have fairly small hotels going in.”
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Source: STR *Year to date