la Frontera In the News

Austin American Statesman

June 29, 1999

Fullservice hotel set for Round Rock
300 room facility will also offer meeting space, ballroom

by R. Michelle Breyer & Janet Jacobs
     American-Statesman Staff

A 300 room Marriott hotel will help anchor a major Round Rock development, making it one of the few new full-service hotels planned in the state.

Details about the hotel were disclosed at the early morning groundbreaking of the 329-acre La Frontera mixed-use development Monday. The development, at Kouri Avenue and FM 1325 just off Interstate 35, also will include 800,000 square feet of stores and restaurants, a 16-screen movie theater, a 4 million square foot office campus and hundreds of apartments.

But the impact of a new full-service hotel will likely be felt beyond the Williamson County line.

A Cincinnati hotel developer, whose identity has not been released, has a contract for the Marriott land and should close on it by early next year, said Dan Listrom, president of First Regional Properties Inc. The hotel could open in 2002.

The eight story hotel would include 30,000 square feet of meeting space with a 16,000 square foot ballroom. It also would include restaurants.

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

Round Rock city officials believe a fullservice hotel will make their city more attractive to prospective as well as existing businesses such as Dell Computer Corp. Although the city has 850 hotel rooms within the city limits, it has no hotels with banquet facilities or meeting rooms.

"We've always felt we were lacking that piece of the puzzle," said Phil Brewer, executive director of the Round Rock Chamber of Commerce, adding that he has worked to attract a fullservice hotel to the city for more than five years.

A healthy economy, rising demand and a crop of fastgrowing hotel chains have contributed to an ongoing hotel boom in the Austin area. The number of hotel rooms has swelled from 14,300 in 1997 to an estimated 18,350 this year.

But almost all of these new hotels have been smaller extendedstay or limited service properties places with names such as Holiday Inn Express, Fairfield Inn and Courtyard by Marriott.

A 150 room Embassy Suites near the Arboretum opened last year, making it the first new full-service hotel to open in Central Texas since the Renaissance Austin was built 13 years ago. The renovation of the Stephen F. Austin Hotel at Congress Avenue and Seventh Street downtown will add another full-service hotel this fall.

Until recently, room and occupancy rates haven't justified the construction of full-service hotels, which tend to be more costly and risky to build, said John Keeling, senior vice president of PKF Consulting/Hospitality Advisory Services in Houston, which tracks the hotel industry.

"Limited-service hotels are easier to build and there's more cash for development," Keeling said. "It's not that we're building them because people want to stay in them; we're building them because we can build them."

Keeling said it is to Austin's advantage to get more fullservice hotels because they employ more people, pay more taxes and have the rooms to accommodate larger conventions. The net effect is more business. And fullservice hotels tend to fare better, even in an overbuilt market.

The flood of new hotel rooms in the Austin market has pushed down the area's occupancy rate from 78.3 percent in April 1998 to 77.1 percent in April 1999. But in downtown Austin, where the bulk of the area's full-service hotels are located, the occupancy rate rose from 77.5 percent to 79.8 percent.

"Full-service hotels are more competitive than limited-service hotels," Keeling said.