With new stadiums and initiatives over the past few years, including the Beltline, Mercedes-Benz Stadium and the College Football Hall of Fame, Atlanta is vying for tourists. And that means more filled hotel rooms.
Atlanta hotels’ occupancy and average rate levels stood at historic highs in 2016, according to HVS hospitality consulting firm. That’s before Mercedes-Benz Stadium opens for business Aug. 26.
Frank Phair, chairman of the Georgia Hotel & Lodging Association, has served as general manager of Embassy Suites by Hilton Atlanta at Centennial Olympic Park for three years. Phair has worked for the Embassy Suites brand for more than two decades.
He spoke with Crain’s Atlanta about the local hotel industry and how the city’s projects have expanded hospitality business beyond conventions.
Q: How is the Atlanta hotel industry doing right now compared to the last few years?
A: We’ve been on a good roll. We’ve seen some nice increases year after year, and we’re always optimistically cautious. The hotel industry is very cyclical, so we see seven- to 10-year runs, usually, and then we have slight recessions, and then we come back and build it all up again. But this one has been kind of nice. It’s been longer than usual.
Atlanta has a lot to offer, and it keeps getting stronger. With the three new stadiums that are being built here—SunTrust, Mercedes-Benz and you have [Georgia State University], which now has a football stadium where the old Turner Field was—I think those things are just attracting more of the leisure customer. I’ve been in the Atlanta downtown market three years. I was in Cobb County for a while. But years ago, the downtown market was driven by the corporations that are down here, mainly Coca-Cola, Ernst & Young, PricewaterhouseCoopers, things like that and also the conventions.
Well, that has changed. All the leisure demand drivers—the aquarium, the Center for Civil and Human Rights, World of Coke moving to Centennial Park, the growth of Centennial Park itself with the $30 million renovation they’re doing right now, the new stadium, what Philips Arena is thinking about doing, kind of making an L.A. Live [entertainment district] there—there’s now leisure coming here. Years ago, that didn’t happen. You stayed away from downtown.
I think that my ownership company was on the foreground of that. They bought this property pre-Olympics, and [it] used to be no one would go west of Peachtree. No one. And now, it’s the place to be with the greenspace and all the attractions and the College Football Hall of Fame right across the street. There are so many demand drivers now downtown, that leisure component has really changed the dynamics.
Q: How has the city’s tourism-friendly initiatives, including the Beltline, the stadiums, the College Football Hall of Fame and the Center for Civil and Human Rights, affected the hospitality industry throughout the city?
A: I think maybe a customer would come in for one day and see the aquarium. They could stay in Cobb County. It’s just an easy drive down 75. Or [they could] stay at the airport and take MARTA in. It’s very simple… Now you’ve got the streetcar which goes to the King Center, which is revitalizing Auburn Avenue and Old Fourth Ward area, and also all the bike trails they’re putting in downtown. They have all these rentable bikes now that you can bike the city, which is really cool. We have a station right by our hotel that has 12 slots for bikes and [you] constantly see about half of them gone, which is a nice sign. I think that’s bringing people in for two and three days where it used to be one. And I think that’s really helped build the occupancy levels downtown, especially summer months. Summer months are historically not convention months. We’ve had some good years with conventions in the summer, but mainly it’s driven by leisure, and that’s really helped the summer.
Q: What challenges does the Atlanta hotel industry face?
A: I think labor as an industry is tough. It’s not that [employees] are not out there. It’s just the way the economy’s growing, jobs are being filled in all sectors and that affects our industry… The workforce is getting kind of small for people that are looking for it. That’s driving up wages, which is nice for the families, but tough for ownerships and businesses, so I think that’s a challenge… We work closely with the hospitality schools. We’re fortunate that Georgia State University is downtown and has a great hospitality program, so we try to get involved from an early start. We do tours for their students here at the property to really get them energized about the industry.