Flurry of new hotels in the works for Colorado Springs

Pikes Peak region visitors don't have to worry if there's no room at the inn because several more inns with rooms are on the way.

At least seven new hotels either have opened recently, are under construction or on the drawing board around the Colorado Springs area as developers say hotel stays among leisure and business travelers have increased to the point where it's giving them a financial incentive to build.

"I'd like to say there's been some pent-up demand for Colorado Springs," Doug Price, president and CEO of the Colorado Springs Convention and Visitors Bureau, said of hotel activity on the part of developers.

The new projects include:

- The 10-story, 311-room Great Wolf Lodge, a resort anchored by an indoor water park. Great Wolf opened Dec. 16 east of Interstate 25 and InterQuest Parkway on the city's far north side.
Foundation work is underway on the 100-room Fillmore Inn, being constructed west of Interstate 25 and Fillmore Street on Colorado Springs' northwest side. At least seven new hotels - targeting both business and leisure travelers - have opened, are under construction or in various stages of planning around the city as demand heats up. RICH LADEN, THE GAZETTE

- A 10-story, 165-room Hilton Garden Inn on the southeast corner of Cascade Avenue and Bijou Street in downtown, where a developer hopes to break ground in mid-January. The same developer has purchased land southwest of InterQuest and Voyager parkways on the north side for another possible hotel.

- The four-story, 100-room Fillmore Inn, which includes a Best Western Plus and an Executive Residency. Construction on the project began recently west of I-25 and Fillmore Street.

- A four-story, 122-room Comfort Suites and Mainstay Hotel that has been proposed at Powers and Stetson Hills boulevards. The site is an undeveloped parcel within the northeast side King Soopers-anchored Ridgeview Marketplace shopping center.

- An 80-room, three-story Fairfield Inn & Suites planned southeast of Tutt Boulevard and Barnes Road, near Powers and Barnes. The site also is on the city's northeast side.

- A four-story, 136-room hotel - still unbranded - that would be part of redevelopment efforts along Nevada Avenue and Tejon Street south of downtown.

What's driving developers to build?

For one, Springs hotels are filling up. November's local occupancy rate of 59 percent was the highest in 19 years, and the rate has risen in 14 out of the past 15 months, according to the Rocky Mountain Lodging Report.

Meanwhile, average room rates in the Springs of nearly $94 a night during the first 11 months of 2016 were up 7 percent over the same period a year earlier.

Colorado Springs developer John Gatto of Crestone Development, who's building the Fillmore Inn, said he and a partner hired a consultant three years ago to analyze the local market. At the time, the consultant determined that Springs-area occupancies and room rates lagged other cities and wouldn't financially support a new hotel, Gatto said.

After reading about rising occupancy and room rates, Gatto said he asked the consultant over the past year to update its study. This time, the numbers - development and construction costs vs. the projected return on investment from room rates and occupancy levels - supported going forward, he said. As a result, he launched construction of the Fillmore Inn, which he's targeting for an early September opening.

"There was now a niche and a demand with the higher occupancies, and the numbers started to work," Gatto said. "That's why we pulled the trigger. Others probably have done the same thing for the same reason."

The Fillmore Inn will have 60 Best Western Plus rooms and 40 extended-stay, Executive Residency rooms; all will have refrigerators and microwaves, while Executive Residency rooms also will have small kitchens. The Fillmore Inn also will have an outdoor swimming pool, fire pit, bar and lounge area and meeting space - amenities not typically found in a limited-service hotel.

Slawek Pietraszek, managing director of Springs-based New Visions Hotels, said Colorado Springs hasn't quite caught up to Denver, Fort Collins and some other Front Range cities when it comes to hotel room rates and occupancy levels.

But the city is getting closer, he said. As a result, New Vision is developing the downtown Hilton Garden Inn and hopes to start construction this month. New Vision also bought a site at InterQuest and Voyager, although the company won't tackle that project until its downtown hotel is up, running and succeeding, Pietraszek said.

Occupancy levels in the Springs and other cities are rising, in part, because many corporations have loosened their purse strings in recent years and are sending employees on business trips, Pietraszek said. Also, many younger people are traveling and looking for places to stay, he said.

"They go out for weekends," Pietraszek said. "People are more into leisure and relaxing. We noted there are more people (traveling) just overall, in the whole country. Occupancies are up."

At the same time, more travelers are passing through the Colorado Springs Airport - gains that can be attributed, in part, by flights added by Frontier Airlines, Price said. And more visitors to the Springs mean more hotel stays, he said.

Not all of the new hotel projects target the same audiences, however.

While the Fillmore Inn will be a limited-service facility that might attract business travelers, Great Wolf Lodge is a full-service resort. It seeks to attract families that want to spend several days under one roof - splashing around in an indoor water park, bowling and rock climbing at a large-scale entertainment area and eating at several on-site restaurants.

"Great Wolf will be much more leisure, family focused than those others," Price said. "But they've got the most amount of rooms to fill. The good thing is, they've got meeting space (20,000 square feet) they can use for the business meetings and travelers during the week. But then on weekends, they're going to focus squarely, solely, if you will, on the family vacationers."

The hotel planned near South Nevada and South Tejon will be part of a larger-scale redevelopment effort that's starting to take shape and will include apartments, stores, restaurants and trails, developer Ray O'Sullivan said. He's working with downtown Springs businessman Sam Guadagnoli, who's heading one of three groups seeking to redevelop portions of the Nevada and Tejon corridors, south of I-25.

"We're creating a campus, a place where there will be all kinds of amenities," O'Sullivan said.

Even as several local hotels are in various stages of development, Price said he expects to see even more.

The area around the Colorado Springs Airport on the southeast side has a handful of hotels. Yet as air service grows, and because it's part of a state-designated enterprise zone that offers financial incentives to employers, the airport area is ripe for more business and hotel development, Price predicts.

Likewise, the addition of the U.S. Olympic Museum in southwest downtown is being counted on as a catalyst for development in that area - including hotels, he said.

"As our flights and our air service get better and better, I think that these hotels are banking on increased air service to bring more business travelers to the Springs," Price said.

"And you compound that with the success that we're seeing this year with just all different market segments - from sporting events, to the convention and meeting market," he added. "We're just having a tremendous year. So, it's not like somebody is building a real big hotel to fill. Every one of those (newly planned hotels) seems to me they'll be able to carve a niche in the market and be successful."

Reported by:  Gazette.com