Nampa Idaho Hyatt Hotel
In 2018, Boise, the state's capital, was named America's fastest-growing city by Forbes magazine, and showed robust economic growth in 2019. The festival has only been around for five years and attracted more than 35,000 visitors, but by the end of 2019, the hotel market in Boise appears to have entered a period of recovery, with continued increases in demand driven by a strong and diverse local economy. With the economy, demand and growth, the hotel construction boom in Idaho continues, with the first wave of new offerings coming to market in 2016 and 2017. Upcoming major events include the annual Idaho State Fair and Boise State University's annual Music & Arts Festival. After successfully hosting the event in 2018, she will return to Boise State University for the second year in a row.
The steady pace of bookings at the convention centre is expected to benefit the city centre hotel market, with 31 confirmed congresses planned until 2021. With many government agencies and institutions nearby, travelers are looking for new hotels in downtown Boise. City hotels that were previously unpursued by travelers because of their limited travel budgets can now absorb government demand with slight discounts.
Moreover, the arrival of the Amazon Fulfillment Center should act as a catalyst for growth in the Boise suburbs, including Nampa and Meridian. Based on the Amazon success story, this development should act as another catalyst for the local economy and increase the number of hotel rooms available in Boise and other parts of the state. The outlook for the Boise hotel market in 2020 is cautiously optimistic, based on current hotel bookings and occupancy rates and expectations for future growth. Occupancy rates are expected to stagnate over the next few years as the market continues to absorb additional new supply. However, local hoteliers are optimistic for 2020 and expect low interest rate rises in the future.
The impact of this new offering can be seen from our conversations with local hoteliers at Boise Hotels. Our data shows that hotels have experienced robust growth in recent years due to rising tax revenues, which is related to higher occupancy and tax revenues.
Boise Hotels' efforts to bring the 31-year-old hotel to the industry standard are also noteworthy. The extension will include an expanded public car park, a new restaurant and additional retail space.
The hotel is scheduled to open in March 2020, with hotel management working with project developer Burgess Investment Group. Noecker and HVS Brokerage Advisory may also discuss assets that could be sold in 2020.
Four more hotels are opening in 2018, as the map below shows, including a new Hilton hotel in Meridian, a Marriott hotel in Boise and a Hyatt Regency hotel on the Boise River. The fourth hotel is the state's first TRU Hilton hotel to open on the Meridian in spring 2018. It is the largest hotel opening, but only the second of its kind in Idaho, according to the U.S. Department of Housing and Urban Development (HUD). The following maps illustrate the hotel offerings for the next five years in each of Idaho's four major cities.
Major developments include the expansion of Boise Airport, the opening of a new Hyatt Regency hotel on the Meridian River and the construction of the new Marriott Hotel in Meridian. A major driver of tourism in 2019 is the addition of hotels in Boise and Meridian, as well as the development of new hotels and restaurants in downtown Boise.
In total, 870 hotel rooms have been added in Greater Boise, with most of these hotels being upper middle class. On the one hand, it is expected that this new offer will weaken the densification that previously led to an overflow into the periphery at city-wide congresses. The Boise Convention Center itself is currently being greatly expanded, allowing for a significant increase in the number of congressmen with a focus on larger congresses. On the other hand, the city's new hotel offerings have enabled it to attract and capture large congresses that it has not been able to host due to supply constraints.
Convention center officials said the focus is expected to be on attracting a few more visitors to conventions in the emerging technology sector, including data storage. The larger Treasure Valley is also facing further growth, driven by the announced Amazon Fulfillment Center coming to Nampa and the suburbs of Boise. Amazon says it has already invested $14 million in the state of Idaho between 2010 and 2018.
Based on unprecedented airport statistics, recent data show that expanding existing destinations in Treasure Valley, such as the Boise Convention Center, has significantly increased passenger traffic at Boise Airport in 2019. According to local news sources, a $1.5 million increase in hotel occupancy tax has been approved for 2019, illustrated by the fact that the Boise Centre has generated more than $100 million in annual revenue for the city and the state of Idaho, and that the occupancy tax is expected to exceed the 2019 budget due to high levels of visits. The 10-year, $2.1 billion Boise Center project, worth $3.2 billion, is expected to be completed in 2024 with about $200 million in funding.