Hotel signs up future guests
Downtown Sheraton gets convention boost
Ginger D. Richardson and Stephanie Paterik
The Arizona Republic
Oct. 29, 2006 12:00 AM
The new Sheraton Phoenix Downtown Hotel has booked more than 67,000 room nights in four months of marketing, even though the property is still two years away from opening.
Artist renderings show an expansive lobby and nicely appointed guest rooms in elegant shades of copper, burgundy and beige. But right now, the hotel is a tangle of steel beams, reinforcements and concrete, which makes the reservation numbers that much more impressive.
And its 1,000 rooms aren't coming cheap.
Rates at the new hotel are expected to range from about $139 in the low season to $500 in busy months, said Steven Spivak, director of sales and marketing.
The $350 million, city-owned property is getting its business from the big groups that are booking future meetings at the Phoenix Convention Center, which is undergoing its own $600 million-plus renovation and expansion.
"When you put this caliber of product in the Valley, open a brand-new Sheraton, you don't have to drop rates to get people in the door," Spivak said.
But while booking business is going well, managing the hotel's construction budget has proven more challenging.
Rising prices of materials, such as copper, concrete and steel, have forced engineers and city planners to go back and make changes to the building's design. Officials say guests will not notice the alterations because they involve interior, structural fixes.
For example, crews swapped out copper feeders on the electrical units with aluminum, for a savings of $800,000.
"I don't think we've done anything in any way that will impact the quality of the building," Deputy City Manager David Krietor said. "We haven't had the kind of huge crisis come up on this like we've had on some other major projects."
Krietor's comment was in reference to the Convention Center construction project, where rising costs forced the city to use the facility's operating budget to pay for millions in budget overruns.
But Phoenix officials say the hotel project is going more smoothly, and they are hopeful that they will be able to build the property with all the planned amenities.
One of the areas currently on the bubble is a spa with five treatment rooms.
The spa, part of the hotel's fitness center, was featured on the hotel's original architectural renderings. But last year, the city met with Sheraton executives and the amenity was put low on the priority list behind meeting room space, as something that could be cut if the budget got tight.
Project manager Jay DeWitt said the current plan is to build the shell of the spa facility and wait to see if there is enough room in the budget to finish it out before the hotel's planned October 2008 opening.
"We're very hopeful that there will be," he said.
Spivak said it would be a bonus if all the amenities were ready to go when the property welcomes its first guests.
"Obviously we understand that there's a construction budget that has to be met," he said. "But the challenge . . . from a competitive standpoint is that in the summer months, we are likely to compete against those resorts that have spas and other features."
The Phoenix Downtown Sheraton will boast an outdoor swimming pool, at least one, and possibly two outdoor meeting and function spaces, two ballrooms and 80,000 square feet of meeting space.
Some existing area properties say they worry that the competition will negatively affect the occupancy, but hotel analysts predict the new Sheraton and the Phoenix Convention Center will actually help drive business and increase demand.
That's because they can accommodate groups that were previously too big to meet in Phoenix.
There are currently only a handful of hotels in downtown Phoenix, including the Hyatt Regency Phoenix, the Wyndham Phoenix Downtown and the historic, but small, San Carlos Hotel.
"We don't want to just fill downtown, we want to spill over," Spivak said.
But, he added, the hotel's ultimate success depends on all the promises of downtown Phoenix coming to fruition: urban dwellings, light rail, university campuses and biotech companies.
"This is about more than opening a hotel," he said. "It's about reinventing the city of Phoenix for the people of Phoenix."