Stakeholders weigh in on Harrisburg's hotel-building boom

Central Penn Business Journal, Jan 19, 2007 by Veronikis, Eric

DAUPHIN COUNTY

Downtown Harrisburg is hotel happy as of late.

Should the latest project, announced Jan. 8, be approved, two boutique-style hotels will open within a block of each other next year along State Street.

But will the market support five downtown hotels within walking distance of each other?

Harrisburg Mayor Stephen R. Reed, regional developers and most competing hotel managers say "yes."

The city planning commission already unanimously signed off on developer Jules Patt's plan to transform the 103-year-old Barto Building at the corner of Third and State streets into a hotel. Patt needs the zoning hearing board and city council to approve the project before renovations can begin.

The hotel has yet to be named, but Patt, of Hollidaysburg, Blair County, said the 78,000-square foot structure would feature 88 luxury rooms, meeting space, a rooftop restaurant and lounge, boutique-style stores and four-star service. Convention services are not part of the plan, said Susan Kingsley development coordinator of the Patt Organization.

Patt chose Harrisburg because the city has experienced tremendous growth in recent years. He described the city as "hot." And though he would not specify what other plans he has under wraps, the Patt Organization is pursuing further interests in the capital city.

The developer has constructed or rehabilitated more than 75 different shopping, hotel, residential, office, manufacturing and warehouse projects since 1972. Patt has been named one of the country's top 100 builders by Builder Magazine and Entrepreneur of the Year by Entrepreneur Magazine, Reed said.

His track record looks good, but can his hotel succeed in Harrisburg?

If the greater Harrisburg area is considered, the answer probably is no, according to Smith Travel (www.smithtravelresearch.com). That site said Harrisburg/Hershey market featured 3.4 percent more rooms than customers as of November. This means there is more supply than demand in downtown Harrisburg and its surrounding suburbs.

There are a combined 716 rooms in downtown Harrisburg. Hilton Harrisburg houses 341 rooms. There are 261 guest rooms in the Crowne Plaza, and the Comfort Inn Riverfront, at 525 S. Front St., offers 114 rooms.

The Comfort Inn sits the farthest from center city but is within a five-minute walk of the other hotels. The inn is a limited-service, mid-scale hotel that attracts a range of different guests, including business travelers, weekend guests, families and overflow from the Hilton, general manager Tara Betz said. In early February, a multi-milliondollar renovation will begin. The rooms will be gutted and refitted as public meeting areas are updated. The effort is not in response to the hotel announcements, Betz said.

Patt's hotel would not compete with the Comfort Inn because the hotels attract different clientele. Even if they were competing for the same customers, Betz said the addition can only help downtown Harrisburg.

"It's going to hurt bigger, fullservice, luxury hotels in the suburbs because traffic is going to stay inside Harrisburg. There will be more options," Betz said. "It might affect the Hilton or the Crowne Plaza. But it (Patt's hotel) will help bring more people downtown."

Crowne Plaza General Manger Stephanie Foose believes it is too early to know whether Patt's hotel will complement or compete with other city hotels. Foose described the Crowne Plaza as an "upscale" hotel, the kind Patt is looking to develop.

"I don't have an opinion. There is not enough information available yet," Foose said. "Luxury is defined many ways. A lot of hotels in the Harrisburg area are only 75 percent full. So that says something."

Hilton Harrisburg manager Joe Massaro welcomed local developer J. Alex Hartzler's plan, announced last fall, to place a hotel at the corner of North second and State streets. Due to a lack of space at the Hilton, Massaro routinely turns away business travelers looking for lodging Monday, Tuesday and Wednesday of each week. The nearby Crowne Plaza hotel cannot house the overflow, he said. So the addition of 138 rooms would complement the city well, Massaro said.

Knowing Hartzler's hotel was going to operate under the Skywood Aloft hotel brand helped define his point of view, too. Skywood is a limited-service hotel that features a minimal amount of meeting space and targets a younger, businesstraveler clientele. The four-star Hilton, on the other hand, attracts convention business throughout the week, some business travelers and leisure guests on the weekend. hotelier Jules Patt's hotel, however, will be independently run, with no national chain affiliations.

Massaro was not as quick to laud Patt's plan to develop a luxury hotel. He is withholding his opinion on the project until he learns more.

"Right now, we (Hilton) are the top tier (in Harrisburg), with the amount of amenities we offer. We are three distinctly different hotels (Hilton, Crowne Plaza and Skywood Aloft). What the new hotel is going to offer is still not defined," Massaro said.