Atlanta Area Experiences Post-Olympic Hotel Boom

<I>Atlanta</I> - Last year, during a frenzied construction boom in which one-seventh of all new hotel rooms built in the United States went up in Atlanta, some industry analysts were predicting a hotel bust in the city in 1997.

Despite forecasts of an oversupply of accommodations chasing an undersupply with crowds from the Olympic Games long gone, the boom continues, with new hotel properties opening and more planned.

The major reason why Atlanta's hotel industry continues to be on a roll is the rise of the city as a business center, and the influx of business travelers.

"This market is as vibrant as it has been since the mid-1980s," said Mark Woodworth, director of the Atlanta offices of PKF Consulting, "and I think one factor is the exposure it got during the Olympic Games."

Woodworth said the 1996 construction boom, in which more than 5,000 hotel rooms were built in the city-largely in small properties scattered throughout the metro area-made the city more accessible to business travelers.

"What you have is a supply of hotel rooms that's well distributed throughout the suburbs, so business travelers can usually find a room that's close to where business takes them," said Debbie Henry, president of Meetings That Move, an Atlanta-based destination management company.

Major lodging projects include the Grand Heritage Corp., which is negotiating to build a $50 million hotel above the Macy's department store downtown; Four Seasons, which plans to take over management of the Grand Hotel in the midtown area; and Hyatt, which recently paid a record $90 million for the former Hotel Nikko in the city's Buckhead area, another popular corporate address.

Henry attributes much of Atlanta's rise as a business travel center to the growth of Hartsfield International Airport, the second busiest airport in the United States and the site of Delta's main hub, the largest operated by any single airline in the world.

In September, after the Olympics had ended, Westin Hotels opened the 495-room Westin Hotel Atlanta Airport, offering meeting space that can accommodate groups of up to 550. The hotel, which had once been a Renaissance property, underwent an $8 million renovation before opening under Westin's flag. With the new property, the Atlanta suburb of College Park-where Hartsfield is located-now has a total of 4,000 hotel rooms.

A bigger hotbed of hotel development has been Gwinnett County, northeast of central Atlanta. During the pre-Olympics construction boom, 20 percent of all the new rooms built in the metro area were constructed in Gwinnett County, which has a vibrant corporate headquarters community, with Makita Power Tools, Fuji Film and Scientific Atlanta all expanding their operations there in the past two years.

Most of the hotels built in the county over the past 18 months are smaller than 100 rooms and offer no meetings facilities.

While those hotels are not well suited for meetings, they fit the bill for economy-minded corporate travelers. "The hotels like those in Gwinnett, most of which are located near retail centers with a big choice of dining options, offer the business traveler the opportunity to save some dollars on a hotel that doesn't have its own restaurant," said Woodworth.