la Frontera In the News

Austin American Statesman

April 15, 2000

Marriott coming to Round Rock

by R. Michelle Breyer, American-Statesman Staff

Construction is expected to begin next week on the Marriott Conference Hotel in Round Rock -- the first full-service hotel to be built from scratch in the Austin area since 1988.

Along with the planned Hilton Convention Center Hotel downtown and the Hilton Austin Airport -- a project being built in the former Bergstrom Air Force Base headquarters -- the $25 million Marriott is part of a new generation of full-service hotels coming to an area sorely in need of them.

"We need more full-service properties," said Debbie Simmons, president of the Austin Hotel & Motel Association.

On Friday, Winegardner & Hammons Inc. closed on land in Round Rock for the 300-room hotel in the La Frontera development at Kouri Avenue and FM 1325. The hotel is part of a mixed-use development that will include stores, restaurants, offices and apartments.

"We have determined that (Round Rock) is an up-and-coming growth area for Austin," said Mike Conway, senior vice president of marketing for Winegardner & Hammons, a Cincinnati-based hotel development and management company. "We felt it was an area that could support an upscale full-service hotel."

The eight-story hotel will include meeting space, ballrooms, eight executive board rooms, a luxurious lobby and a 3,500-square-foot restaurant.

The hotel, which is expected to create more than 300 full- and part-time jobs, could open by next summer. Within two years, it is expected to generate annual taxes of $1.5 million for the City of Round Rock, Williamson County and the Round Rock School District.

"It will be such an engine for the economy up there," said Bill Smalling, one of the managing partners of La Frontera.

The new hotel is considered a significant addition to Round Rock's rapidly changing landscape, providing much-needed meeting facilities for the fast-growing business community. Round Rock companies such as Dell Computer Corp. have had to hold events at Austin hotels because of the lack of meeting and banquet space in Round Rock.

"It fills a niche we hadn't been able to address up to this point," said Phil Brewer, executive director of the Round Rock Chamber of Commerce, which has been working to get a full-service hotel in Round Rock for the past six years. "It will have a positive impact on business."

Brewer also believes the hotel will provide a spark for Round Rock's tourism industry, especially with the opening of the Dell Diamond, the baseball stadium for the Round Rock Express.

Austin's hotel industry has been in the midst of a building boom since the mid-1990s, driven by the healthy economy and the aggressive growth of national hotel chains.

Since mid-1994, an estimated 7,000 hotel rooms have been built in the Austin area, bringing the total number of rooms to about 18,500, said Ryan Robinson, chief demographer for the City of Austin.

But almost all of these new properties have been smaller, extended-stay and limited-service hotels, such as Holiday Inn ExpressSelect, Fairfield Inn and Extended Stay America. Unlike full-service hotels, these properties don't have meeting rooms, banquet facilities or restaurants.

Although the demand for full-service hotels has been there for several years, room and occupancy rates haven't justified construction. Between 1991 and 1999, the average daily rent for rooms at Austin-area hotels has jumped from $48.05 to $91.60 -- a 90 percent increase, according to PKF Consulting, which tracks the hotel industry.

Full-service hotels are significantly more expensive to build, said John Keeling, senior vice president of PKF Consulting.

"For the same money it takes to build a full-service hotel, they can do eight limited-service hotels and spread the risk around," Keeling said.

Cities want full-service hotels for many reasons. While limited-service and extended-stay hotels attract small groups -- business travelers, sports groups, tourists -- they can't compete for conventions or corporate business.

"Limited-service hotels compete for demand that's already coming to the marketplace but won't bring new demand to the Austin area," Keeling said. "A full-service hotel can go outside the community to bring groups to Austin who couldn't otherwise come."

These large hotels, with their restaurants, bars and banquet facilities, also generate tax revenue and a significant number of jobs for an area.

In most cases, hotel developers have required financial participation from the public sector to build full-service properties, Keeling said. Both of the new Hilton hotels being built in Austin will be public-private ventures, financed by tax-exempt bonds.

The Marriott received minimal financial assistance from the City of Round Rock -- about $100,000 in fee waivers.

Marriott operates a 365-room, full-service hotel at 701 E. 11th St., which was built in 1988 -- the last full-service hotel to be built in the area.

Winegardner & Hammons owns and/or manages 31 hotels across the country. In Austin, the company manages the Radisson Hotel & Suites on Town Lake. The majority of the company's properties are full-service hotels.

"We see a need for upscale, full-service properties in the market," Conway said.

You may contact R. Michelle Breyer at mbreyer@statesman.com or 445-3856.