Tourism is jumping, and Napa is ready to put the heads in beds.
Watch out: Napa will soon be flooding again.
But, this time, water will not be the culprit. Instead, with a plethora of new hotel projects, plus renovations and expansions to existing lodging properties, you can expect floods of tourists, not only in the city of Napa but also throughout the valley.
Forget “staycations” and other belt-tightening measures from The Great Recession. Tourism is jumping, and Napa is ready to put the heads in beds. “Overall, the lodging community is very happy with what it sees,” says Clay Gregory, president of Visit Napa Valley, which promotes Napa Valley as a tourist destination. Tourism was projected to start making a recovery in 2013 and it did, but at a much more robust clip than anticipated. “It’s well beyond what was predicted. Revenue is up and the occupancy rate is up—that’s part of the attraction for new properties,” Gregory says. It’s also been a prod to get established properties into the remodeling and expansion mode.The new Napa
Although there are lodging construction projects throughout Napa Valley, it’s the city of Napa that’s attracting the most attention from new investors.
“The reality is, the city of Napa has changed in a very positive way over the last decade-plus,” says Gregory. There’s the sparkling Riverfront project, which has attracted shops, restaurants, live entertainment venues and hotels. There’s also the spiffed-up Shops at Napa Center project, a remodel of the old Napa Town Center by Zapolski Real Estate [see “Todd Zapolski,” GameChangers 2013]. And there’s the very popular Oxbow Public Market, which has been a magnet for food and wine aficionados since it opened in 2007. In short, practically the entire downtown area has gotten a much-needed facelift—and the results make Napa “quite a looker.”
Ironically, Napa’s new look and rather stunning turnaround can be attributed, at least in part, to one of its biggest failures—Copia: The American Center for Wine, Food and the Arts. The dream of the late Robert Mondavi and his wife, Margrit, opened to much fanfare in 2001, only to go bankrupt and close in 2008. It still sits empty on prime downtown real estate. But when Copia was in the planning stages, Napa’s flooding issues had to be faced head-on. “Once the flood control project was approved and Copia was built, downtown Napa began to catch the eyes of investors,” says Gregory. “When the city flooded on a regular basis, no one was the least bit interested in opening something in Napa.”
Today is a different story, particularly when it comes to lodging. Gregory says a new Archer property is slated for the Shops at Napa Center. To be located on First Street, it will have 185 rooms. Another lower-profile project is planned for Stanley Lane in Carneros. “It will be a five-star property,” Gregory says, a 110-room resort called VieVage Napa Valley, managed bby Auberge Resorts. The Oxbow area also has a hotel project that’s been approved, but is still in limbo. “Originally, it was to have been 350 rooms, but I expect it will be a bit smaller,” Gregory says. The problem, he says, is that, “It’s a lot easier to get approval than it is to get financing.”
Facing competition from new properties—even if they’re just on the drawing boards—has also led some of Napa’s well-established hotels and resorts to announce plans to refresh and expand, including Embassy Suites Napa Valley, Napa River Inn and Milliken Creek Inn. Two of the biggest projects in Napa include one of the city’s oldest lodging properties (Silverado Resort and Spa) and one of its newest (Meritage Resort and Spa).
Silverado Resort and Spa
Napa’s Silverado Resort and Spa, which has been in business as a resort since 1953, got its start 140 years ago when John Franklin Miller acquired several parcels of land and built a stunning mansion that today is the resort’s centerpiece. He named the estate La Vergne. A Union general in the Civil War, Miller’s colorful career included a stint as collector of the Port of San Francisco and election to the United States Senate, where he represented California from 1881 until his death in 1886. Today, the land is still owned by John Miller—just not the same one. Johnny Miller, the professional golfer, purchased the venerable property—a California landmark that appeared in the opening scenes of every one of the 227 episodes of the 1980s “Falcon Crest” television show—in 2010. Since then, Miller and his partners have been on “quite a renovation track,” says Julie Maurer, vice president of marketing for the iconic property.
First up was renovation of the North Golf Course (one of two—the other is South Course) to the tune of $1+ million. If you haven’t been there in person, you can see it on TV this October 6 to 12 when it hosts the Frys.com Open, the first event of the PGA Tour season.
After the golf course, “we continued with major renovations to our 12,000-square-foot conference center,” Maurer continues. Inspired by the Colonial design of the resort and historic mansion, the conference center renovations incorporated white oak hardwood, aged brick and other special nuances that “really look and feel so fantastic,” Maurer says. The conference room has wainscoting, ballroom windows overlook golf course fairways and the lower level of the conference room has been “made to look and feel like a wine cellar, with authentic brickwork, exposed concrete and custom wine racks,” she explains.
“We purchased all new, state-of-the-art conference equipment, including chairs that are ergonomically correct. We also improved Internet access. Overall, it’s quite a transformation from what it had been previously,” Maurer says.
Next up were the guest rooms—all 380 of them.
“They needed to be rejuvenated and refreshed,” Maurer says. Many of the rooms have mini-kitchens and some even have full kitchens. With the help of AMB Designs of Miami, Fla., the rooms were updated with the latest appliances, luxurious showers and stone vanities. “Guests love the light and airy feel,” Maurer says.
“There’s still more on the agenda,” she says. “As we move forward, there are plans for mansion and restaurant renovation. The new owners are motivated to make moves to offer guests all the modern conveniences,” hence the rapid changes.
With two PGA championship golf courses, 13 tennis courts, 10 different pools, a bocce ball court stadium and the largest spa in Napa, the resort is an automatic draw, but Maurer notes there’s been an uptick in the amount of new conference/meeting business in recent months, as well as another emerging trend: multi-generational travelers.
“With the type of lodging we offer—kitchens and one-bedroom suites that can be locked off and made into two bedrooms—we’re finding a lot of parents who are traveling not only with their kids, but with the kids’ grandparents as well,” she notes.
The Meritage Resort and Spa
While Silverado Resort and Spa has invested millions in its refurbishing, the project pales in comparison to that of the Meritage Resort and Spa, which has spent $8 million on renovations and an additional $43 million on expansion over the last few years.
Located at the base of the iconic Grape Crusher statue, the Meritage Resort and Spa, which originally opened in 2006, has basically doubled its original size, adding 165 new guest rooms, a sports-themed ultra lounge, a café, an event piazza, a fitness studio and a 7,300-square-foot ballroom, according to Andrew Bradley, marketing manager. At the same time, it’s upgraded all of its original rooms, replacing beds and desks, adding new features to baths and showers, updated its 10,500-square-foot ballroom and improved Internet access for guests.
The Meritage Resort and Spa is owned by Pacific Hospitality Group, which also owns three other hotels in its “Meritage Collection”: Estancia Hotel and Spa in La Jolla, Balboa Bay Resort in Newport Beach and Bacara Resort and Spa in Santa Barbara. The company also plans to add another property in Huntington Beach to the collection.
The rooms are lavishly appointed. The new Crush Ultra Lounge offers six lanes for bowling, plus pool tables, 12 television screens and a full bar/full menu. There are views of the Grape Crusher statue and nine acres of hillside vineyards planted to Bordeaux varieties. Trinitas Cellars has a tasting room, which is co-located with the sprawling spa in a 22,000-square-foot estate cave. The spa is open to the public by appointment from 8 a.m. to 8 p.m., and anyone who can prove they live in Napa or Napa Valley even get a 20 percent discount on weekday treatments. Also on the property are a chapel, a restaurant, a special event space inside the estate cave for up to 200, plus meeting and event space.
The Meritage Resort and Spa also boasts Napa’s two largest ballrooms—one is 10,500 square feet and the other is 7,300 square feet. And yes, the resort is capable of hosting two events at once—for a grand total of about 1,900 people. “We’ve had both going at the same time,” Bradley says. “We can do it because we have amazing teams [of employees] here.”
Next door to the Meritage Resort and Spa is Vino Bello Resort, a time-share owned by Wyndham, with 180 rooms. Between the two complexes, there are 503 rooms available for visitors.
Up-valley boom
While Napa proper is attractive to many investors, there are also new projects and renovations up-valley, particularly in St. Helena and Calistoga. These projects are on a much smaller scale than those in Napa because of legislation passed in 1968 that established Napa Valley as America’s very first Agricultural Preserve.
“Basically, any development has to happen within the town limits of the communities,” Gregory explains. “The vast amount of the valley is in the preserve. That’s why there are no condos and only one winery with a restaurant [Domaine Chandon], which, along with the deli at V. Sattui Winery, was grandfathered in.”
According to Gregory, the towns, for the most part, “are receptive to hotels, except for Yountville, which has run out of room” for such developments.
Three new hotel projects have been approved recently, two in St. Helena and one in Calistoga. All other lodging projects are renovations and expansions.
On the north end of St. Helena is the Grandview Hotel project. Once completed, it will have 57 rooms and will be built across multiple adjacent properties. Five rooms are planned to be built in the historic Acacia House on Main Street. The hotel will include meeting space, a spa and a small, 40-seat restaurant.
On the southern end of St. Helena, the new Vineland Station, which is comprised of mixed commercial businesses, has been approved for a 60-room hotel, which will be the town’s largest.
At the top of Napa Valley, in Calistoga, the old Silver Rose Inn property has been torn down and will be replaced with a new structure that will have 84 rooms, a spa and a restaurant. It will be owned by Colorado-based Bald Mountain Development.
Recent lodging renovations and expansions in Calistoga include the new Sunburst Calistoga, which took over and remodeled the historic (and somewhat legendary) property that was once the Royal Inn. Located on Lincoln Avenue, the town’s main drag, the Sunburst has retro-modern rooms decorated in bright colors and mineral water pools for guests and drop-in visitors (visitors must pay a $25 non-guest fee to use the pools).
Right down the street from Sunburst Calistoga, the historic Indian Springs Resort and Spa—California’s oldest continuously operating pool and spa facility—is set to soon complete an expansion project it began last summer, adding new guestrooms, an event barn, restaurant, yoga studio, culinary garden, new lawn games, gardens, ponds and a walking path around the entire property. While privately owned by the Merchant Family, the project is estimated to be between $5 million and $25 million, according to public records.
The Napa experience
Investments in Napa lodging, in short, are proof that tourism is making a sustained rebound from recession lows, Gregory says. And it’s the Napa experience that’s luring them back.
“We have a great visitor profile—we get people who are well-educated and love wine, food and art. And the number one thing they tell us they love about Napa Valley is its natural beauty,” he says.
Maurer agrees. “It’s Napa,” she says, replete with sprawling oaks, rolling hills and vineyards. “It’s just hard to duplicate.”
Marin County Hotel Projects
When it comes to new lodging projects, Marin is one tough nut to crack.
Case in point: Corte Madera residents are up in arms about a proposal to rebuild the Best Western Corte Madera Inn, located just off Highway 101 on Madera Boulevard. Plans call for the demolition of the existing hotel and construction of a new facility with 187 rooms, which is 77 more than the current hotel has.Residents expressed concern at a Town Council meeting in May that the new hotel, which would be co-branded by Residence Inn and SpringHill Suites by Marriott, would create more traffic and eliminate a small pond called Edgewater Lagoon, which is in the flight zone of egrets and herons.
Reneson Hotels, a Marin company, owns the property and is willing to place wetland areas in another location to mitigate the loss of the pond, but the offer doesn’t seem to mitigate the concerns of the locals. A public hearing on the project is expected in August or September, at the earliest.
“It’s very difficult to build here,” says Sam Pahlavan, general manager of the Courtyard by Marriott in Larkspur. “The price of land pretty much prevents it, and then you have the environmental issues. Plus most of the cities are against growth, which isn’t bad for existing hotels, but at some point, competition is good.”
Meanwhile, the dearth of hotel rooms keeps the few lodging properties available in Marin at pretty high occupancy rates. Pahlavan says his Courtyard by Marriott is forecast for more than 80 percent occupancy this year.
Lack of competition doesn’t mean, however, that Marin hotels aren’t keeping up with the times. Courtyard by Marriott in Larkspur demolished its lobby four years ago and rebuilt it, adding a bistro that serves breakfast in the morning and dinner/drinks in the evening. Last year, it renovated its 146 rooms and all public spaces such as hallways and stairways.
“The renovations gave the hotel a new feeling,” Pahlavan says. The property is 27 years old.
According to Pahlavan, the hotel—like most lodging facilities—is on a six-year renovation plan, which means the lobby is set for another refresh in two years.
“Six years is sort of the life span” for renovations, he says. “You need to update to keep up.”
Sonoma County Hotel Projects
Napa isn’t the only hot spot in the North Bay when it comes to new lodging projects and renovations/expansions. Things are heating up in Sonoma County as well.
According to Sonoma County Tourism—a private, nonprofit organization that seeks to increase overnight stays in Sonoma County—the hotel occupancy rate in 2013 was 73.2 percent, up from 59.5 percent just three years earlier (during The Great Recession). At the same time, the average daily rate paid for a hotel room in Sonoma County also jumped to $123.70 (in 2010, it was $106.90).“Everything is looking up,” says Tim Zahner, chief marketing officer for Sonoma County Tourism, “We took a hit in the recession, but we were lucky, in that we were able to pivot away from larger markets back to more local. People who normally go for longer-haul destinations came to closer locations—say, here instead of Europe. And then, being in the Bay Area puts us at the northern doorstop to roughly 8 million people. Geography has been our friend; we’ve just had to be nimble to target those audiences.”
Zahner continues, “When people perceive they have more wealth, they tend to spend more on vacations, especially Americans. During the recession, Sonoma County Tourism targeted more local markets, and we also targeted more international travelers because it’s well known they don’t give up travel as readily as Americans do,” when times are tough.
While there aren’t many large-scale lodging projects currently underway in Sonoma County, Zahner says several are in the works, but are currently languishing in the permits process. A February report issued by Sonoma County Tourism and the Sonoma County Economic Development Board shows that hotel companies have applied to build more than 1,400 rooms in 22 new and expansion projects throughout the county.
Among the ones currently all-systems-go are:
• Farmhouse Inn in Forestville is expanding, adding nine new rooms, which will bring it to 27 rooms total.
• Hotel Petaluma, located in the heart of the city’s downtown area, has been refurbished and has changed its status from a residence hotel to a transient hotel, bringing more rooms for overnight visitors to the downtown area.
• Plans are on the table for a new 60-room hotel at The Barlow in Sebastopol, with a target opening date of November 2015.
• The old Travelodge in downtown Santa Rosa has been remade into a “boutique” hotel. The 44-room property has been renamed Hotel Azura.
