It is hard not to notice the hotels popping up all over the Glens Falls area.
Last summer, a 90-room Holiday Inn Express & Suites opened in Queensbury off Exit 18 next to McDonald’s. The 92-room Hilton Home2Suites near Aviation Mall hopes to open in the spring.
More projects are in the pipeline.
Construction will begin in the spring on a 79-room Fairfield Inn and Suites, which will be located behind the former Carl R’s restaurant on the east side of Big Boom Road.
Also, Mohammad Tariq is planning a new two-story hotel on Fort George Road in Lake George. It will be an expansion of the Doray Motel he owns.
The 119-room Courtyard by Marriott in Lake George opened in August 2016 on Canada Street in the village of Lake George.
Some question whether the market can support all these hotels. The total supply of hotel rooms for all nights in 2017 in Warren County grew by 2.7 percent to 1,913,426 room-nights. However, demand did not keep up, only rising by 2.2 percent, to 985,746 room-nights, according to a report from data and analytics specialist STR.
By contrast, the total supply of hotel rooms for rent in Saratoga County in 2017 jumped by 12 percent to 1,272,881 room-nights, though demand only increased by 9 percent, to 768,335.
Total hotel occupancy rates for Warren County dropped very slightly, by 0.3 percent, to 75.19 percent. Total revenue increased by 2.3 percent, to $143.87 million.
The operators of the Holiday Inn Express & Suites say business has exceeded expectations.
“I would say that the area was excited for a big brand to come into Exit 18, especially. People are loyal to the branded hotels,” said Amanda Berrigan, director of sales.
Berrigan cited the proximity to not only the highway but to Glens Falls Hospital and the local paper mills as an asset.
“We’re capturing that person that may have gone up to Lake George or may have gone up to Saratoga to stay,” she said.
That worries Kevin Markham, general manager for the Courtyard by Marriott in Lake George, who said the new hotels “steal” guests that would have stayed at his property. However, the total number of travelers coming to the community is not changing.
“While that market is getting more diluted, these owners are seeing their revenues going down, obviously,” he said.
Amy Austin, director of sales for the Marriott, acknowledged that the Exit 18 location has quicker access off the Northway to Glens Falls Hospital for consultants, doctors or relatives of people staying at the hospital.
Likewise, Markham said people who are staying at the Marriott may used to stay at the Super 8, Days Inn or Ramada Inn.
“When I’m stealing your business out from underneath you, that’s probably not a very good feeling,” he said.
The Marriott had a nearly 63 percent occupancy rate in 2017 — its first full year of operation, according to Markham.
“Most hotels aren’t built unless they’re running 72 percent or higher occupancy year round,” he said.
The Marriott’s average daily room rate is about $142, according to Markham. The hotel may have to drop it to stay competitive with other hotels in the market.
“If they’re dropping rates, we have to drop rates, which is a vicious cycle,” he said.
Markham said cutting room rates cuts into profits — at the same time the cost of labor, utilities and taxes are all higher. Some companies are operating in the red, he said.
The competition at Exit 18 caused developer Bhavik Jariwala to shift from his original site at Exit 18 and relocate to Exit 19 near Aviation Mall for his Hilton Home2Suites, which he said is on track to open in the late spring or early summer.
“We feel that we have the best location in the Queensbury/Glens Falls area and we will have the most amenities to offer as we will have full kitchens in every room, and every room will also be a suite, which is preferred by leisure/corporate travelers,” he said in an email.
Jariwala, who also owns and operates the Sleep Inn & Suites on Route 9 in Queensbury, has been looking to develop a new hotel since 2013. When asked if the market can support all the hotels, Jariwala said: “I don’t have a Magic 8 ball, but we will certainly find out soon enough.”
Tyler Harrick, general manager of The Queensbury Hotel in Glens Falls, said recently that his hotel also has lost business to the new Holiday Inn Express & Suites because clients said The Queensbury did not have enough upgraded rooms to accommodate an entire group of business travelers.
The Queensbury is in the midst of a nearly $6.5 million renovation of the 90-year-old facility. The hotel is renovating blocks of 10 rooms, two months at a time. A total of 35 have been finished and there are 90 left to do. Also on tap are renovating and upgrading the elevators; restoring the lobby to what it looked like in 1926, including marble and brass paneling; and renovating the men’s and women’s restrooms adjacent to the conference room. Hotel officials would eventually like to expand the ballroom to accommodate 400 people.
EDC Warren County President Edward Bartholomew said he believes that the market can support all these hotels. The developers and the hotel chain have done their due diligence and undertaken feasibility studies, he said.
“They’re not going to get financing without demonstrating that there’s a sufficient market in that area,” he said.
Bartholomew pointed out that the developer of the Fairfield Inn and Suites is Edward Moore, who also owns The Queensbury Hotel. He would not have undertaken that project if he believes it would compete with his downtown Glens Falls hotel, he said.
Bartholomew said both Lake George and Glens Falls are trying to attract more large gatherings. In order for that to happen, there needs to be more lodging accommodations.
“I think at some point there will be a need for a second hotel in downtown Glens Falls,” he said. “It needs to be a flag. It needs to have a brand attached to it.”