The Philadelphia hotel market is red hot, thanks in part to its booming convention business. Three major conventions in June elevated Philadelphia Center City hotel occupancy rates to a 22-year high for the month, according to PHLCVB, Philadelphia’s Convention and Visitors Bureau. As reported on philly.com, occupancy reached 89.4 percent in June, the highest June rate since 1993, with hotels booked to nearly full capacity on some days.
The three big citywides that drove convention group traffic in June were the Government Finance Officers Association, which had an estimated attendance of 6,000; the Biotechnology Industry Organization, which hosted 15,858; and the International Society for Technology in Education, which drew 19,500 attendees and exhibitors to the city. The three citywides, in addition to several smaller conventions, combined for a total of 97,208 hotel room nights, generating an estimated economic impact of more than $121 million for the region.
“June was a great month for us and for many Center City hotels,” Bill Fitzgerald, general manager of the Hilton Philadelphia at Penn’s Landing, said in a statement published on philly.com. “When the [Pennsylvania] Convention Center is consistently filled is when we thrive.”
Philadelphia has been tracking hotel occupancy rates since 1993. “June was the strongest month in the over 20 years for which we have records, both in terms of occupancy and average room rate,” said Peter Tyson, vice president at PKF Consulting, which compiles its data from hotel research firm STR, in an article that appeared in Philadelphia Business Journal.
“This is even more impressive when you take into account that the second-strongest occupancy month over that period, October 1998 at 89.2 percent, was with only 7,100 rooms in the inventory, and the current inventory is well over 11,000 rooms,” Tyson told Philadelphia Business Journal.
Philadelphia hotel market momentum is expected to continue—the NAACP held its annual convention at Pennsylvania Convention Center in early July, generating $10.5 million in economic impact. Other huge events coming to the City of Brotherly Love include Pope Francis’ visit at the World Meeting of Families convention at the end of September, as well as next year’s Democratic National Convention.
Hotel Openings and Closings
After more than three decades in the same location, the 357-room Four Seasons on Philadelphia’s Benjamin Franklin Parkway closed in early June. It is expected to reopen in 2018 atop the brand new Comcast Innovation and Technology Center, which at 59 stories will become the city’s biggest skyscraper. The new hotel will have 222 rooms. It has not yet been announced which hotel brand will take over the space formerly occupied by The Four Seasons, which is currently undergoing renovation.
Other new properties scheduled to open include Roost Rittenhouse in the fall of 2015, AKA University City in the spring of 2016, The Study at University City in the fall of 2016, and an Aloft Hotel, SLS Hotel and Residences and AC Hotel by Marriott in 2017.
The community is also excited about an innovative W and Element hotel project currently under construction and scheduled to open in 2018. The dual brand hotel development is located at 15th and Chestnut Streets. Philadelphia Magazine reports that funding for the $280 million W/Element project was made possible with the help of $33 million in tax increment financing and $160 million in loans. Starwood Hotels & Resorts will manage the property.
Although they will both be housed in the same 51-story building, the two hotels will maintain their distinctive identities. W Philadelphia will have 295 guest rooms, 45,000 sq. ft. of meeting/event space, a 7,000-square-foot outdoor terrace with a pool and destination bar, and a 2,900-square-foot spa, among other amenities. LEED-certified Element Philadelphia will offer 460 guest rooms, a 1,600-square-foot fitness center and a 560-square-foot branded meeting space, among other features.