High-end hotel planned for Grand Rapids

GRAND RAPIDS, Mich. (WOOD) - Crews are expected to break ground this summer on a new multi-level, high-end hotel in downtown Grand Rapids.

An Embassy Suites, a branch of the Hilton Hotel brand, is expected to be built on a plot of land at the intersection of N. Monroe Avenue and Sixth Street NW. West Michigan developer Suburban Inns is behind the plan -- one it brought up in 2007 but had to put on hold due to the bad economy at the time.

Embassy Suites spokesperson Jacqueline Toppings told 24 Hour News 8 over the phone Monday the hotel chain will be "pleased to have a presence [in Grand Rapids]."

The hotel is expected to open in late 2014.

Suburban Inns said a drawing of the 2007 project is "similar" to what the new hotel will look like, but noted the plans have "changed significantly" from that original project.

Peter Beukema, chief operating officer of Suburban Inns, told 24 Hour News 8 over the phone that the final renderings of the project likely won't be complete until May.

Beukema said the project will likely cost between $36 million and $38 million, and employ about 300 people. He said the project has nearly cleared the City's permitting process, telling 24 Hour News 8 they completed most of those requirements in 2007.

The developer said in a news release the project's location will "further strengthen the North Monroe Business District."

Suburban Inns currently owns and operates four other Michigan hotels.

It's unknown if there be enough business to support another 11-story, nearly 300-room hotel downtown. The five major downtown hotels -- the J.W. Marriott, the Amway Grand Plaza Hotel, Courtyard by Marriott, Holiday Inn, and City Flats -- currently have about 1,400 rooms.

"[Embassy Suites] certainly is a desirable brand. Whether it can be absorbed into our current supply, I'm not sure," Doug Small, president of Experience Grand Rapids, said.

Beukema told 24 Hour News 8 his company believes there is room for the new hotel. He pointed out it will be the only "all-suite" option in Grand Rapids. He said his family knows this market and is building something for it.  

Not everyone is as optimistic.

"Our convention facilities are such we can grow, but I'm not sure if we can support all those rooms," Small said.

Small told 24 Hour News 8 that both city and county hotels are moving in the right direction.

"I think for Grand Rapids' sake, any time you've got a developers looking at a community and saying, 'You're doing something right and you're doing it well enough that we're willing to invest money in your community,' that's a good thing," said Small.

He pointed to increased convention traffic. Grand Rapids had a record year for convention business in 2012, filling more than 136,000 rooms and generating $100 million.  

"You take conventions, and then you add to that the Medical Mile -- what's happening up there -- there's a lot of daily visitor traffic coming in there," said Small. "You've got the extension of downtown moving both south and north, but that North Monroe section is starting to perk up a little bit."  

Small also said tourist traffic, especially from big events like Art Prize, also contribute to filling hotel rooms.  

Small said local hotels are on average about 60.6% full each night, that's up from 48.8% in 2009 -- a feat Small said is difficult to achieve. He also said the price of rooms has gradually increased during that time period -- from $84.56 in 2009 to $92.94 this past year.  

Despite the growth, Small said he realizes that still leaves about 40% of rooms, on average, empty each night.  

"As confident as I am in what we've seen in growth over the past few years, at what point do we hit the ceiling? At what point do we start to level off? And there's some people out here who say, well, a couple, 300, rooms is not going to be too hard to absorb. Well, that's to be seen yet," said Small. "I'm not going on one side or the other here, not throwing a damp cloth over it, not jumping up and down. We haven't had a chance to evaluate it, once we do then we determine what's needed."