There were no hotel openings in Santa Rosa, California, from 2014 to 2017, but now the wine-country destination has a few hotels under construction and in planning.
SANTA ROSA, CALIFORNIA—Napa Valley isn’t the only California destination where you can explore wine country and also be near the ocean. There’s Santa Rosa, located in Sonoma County, California, which is enjoying a tourism renaissance leading to more hotel development.
The Santa Rosa market didn’t have a single hotel opening from 2014 to 2017, according to Alan Reay, president of Irvine, California-based, Atlas Hospitality Group. But now there’s a hotel under construction, and nine projects with 762 rooms in planning.
Reay said there are a few factors that play into supply in the market.
“One is it’s very difficult to build in Sonoma and (defined good) locations,” he said. “Second, in terms of values of existing product, it wasn’t the same as what we were seeing in … Napa Valley, where hotels were trading at $1 million and above per room. We just hadn’t seen that kind of pricing in Santa Rosa or up in Sonoma County.”
While the market didn’t see any openings for three years, there were a few hotel sales, according to Reay:
- The Astro Motel: 33 rooms, sold for $3.6 million in 2017;
- the Hyatt Vineyard Creek: 155 rooms, sold for $40.1 million;
- the Sandman: 135 rooms, sold for $8.8 million; and
- the Motel 6 South; 100 rooms sold for $2.8 million.
As of May 2017, occupancy was down 0.1% to 76.7% compared to May 2016, according to data from STR, Hotel News Now’s parent company. Average daily rate was up 6.8% to $143.62, and revenue per available room increased 6.7% to $110.10.
Brad Calkins, executive director of Visit Santa Rosa, said destination spend increased 2.3% to $1.8 billion in 2015. He added that the market has over a quarter of the hotel rooms in Sonoma County.
Unique properties, experiences
More national hotel brands are entering the market, such as a 142-room AC Hotel by Marriott, and Reay said those properties get business from loyalty members using their points for stays. He added that there are a lot of boutique properties in the area that appeal to guests who want to experience wine country and its associated culinary offerings.
The Vintners Inn is one of those unique boutiques in Santa Rosa. Percy Brandon, GM at the hotel, said couple’s getaways, weddings and some corporate retreats make up the bulk of the hotel’s business.
“We get a lot of the drive coming over from San Francisco on weekends, and once again, a lot of couples,” he said. “We don’t have a lot of services for children here, so that is mostly why our customer base is romantic getaways, social wine tasting, things like that.”
While there are more big brands coming into the market, Brandon said there’s still demand for boutique hotels.
“Right now, they’re building a lot of hotels around here, but many of them are limited service,” he said. “The Vintners Inn is more of the luxury line than full service, so we are in a unique place. We are a hotel that has almost 100 acres of land with vineyards, so it’s a very unique setting, very different than what’s going on right now.”
Demand drivers, busy season
Michael Gooding, regional VP of operations at G6 Hospitality, which has two Motel 6 properties in Santa Rosa, said local wineries and local events bring guests to the area.
“Summer obviously is the busiest time with tourists traveling to the wineries and fests in the areas,” he said. “Thus, during the weekends, we capture our highest occupancy.”
Gooding said he’s optimistic about continued growth in Santa Rosa.
“With the smart train (testing phase) going through Santa Rosa and the new hotels being built in Rohnert Park (six miles away), we are very optimistic and look forward to a great year,” he said.