Two hotels under construction in Green Hills will double the local hotel count by the end of the year but questions surround the area’s ability to fill not only those new hotels but nearly 100 new ones planned in the Nashville region in the next few years.
The Nashville hotel space is exploding and Green Hills is a part of the growth. By year’s end, Nashville will see 17 new hotels, nine of which have already opened or are nearing completion, totaling more than 2,000 rooms. It’s a sharp increase from nine hotels that opened in 2017, five in 2016 and four that opened every year prior since 2013.
In Green Hills, two new planned hotels — Hilton and Residence Inn by Marriott — will open this December. Together, the hotels will add 327 rooms to the existing 220 guest rooms available today between the Hampton Inn and Courtyard by Marriott.
Hotel developer and management company Chartwell Hospitality — which is responsible for the two new hotels coming to Green Hills — is all-in that the area can support many more hotel stays.
“Chartwell Hospitality identified Green Hills as an ideal destination that lacked a full-service hotel for its residents and visitors,” the group said in a statement provided to Rover. “[Chartwell] has the expertise and track record as a developer to execute a $120 million project, which we created, as well as put the capital structure together … The property management is also something we bring to the table.”
Others in the hospitality industry are taking a wait-and-see-approach. There’s a general sense of caution that all of the hotels planned will come through and questions around how many hotels a specific area can support.
There are a few factors to consider:
• It’s believed that hotels in clusters help drive rates and occupancy, which could make the new hotels in Green Hills successful.
• Residence Inn by Marriott, one of the two new hotels, will be the area's only extended-stay, creating some differentiation in the local market
• Nashville will soon have the hotel rooms for its growing convention base, but does the city have the meeting space?
Can occupancy rates hold in Green Hills?
Hotels located in a cluster — such as in Green Hills where four hotels will operate within a half-mile — help drive rates and generate occupancy in the market area, as opposed to existing hotels losing business when new ones move in.
“If occupancy rates hold up in Green Hills, that’s a sign there’s more demand in the area, which presents an opportunity for additional properties,” said Butch Spyridon, president and CEO of the Nashville Convention & Visitors Corp. “From what I know of the area, there has been strong business, but right now it’s too early to tell.”
The question of whether or not the area can support four hotels is just one part of Nashville’s task to fill more than 5,000 rooms over the next three years. That number would eventually climb to 14,000 if all 94 hotels in the pipeline are constructed, an unlikely prospect, Spyridon said.
“The demand doesn’t exist for all hotels overall,” Spyridon said. “Right now, the hotels under construction are probably the most we could reasonably absorb before seeing an overbuilt situation.”
Who’s staying here?
In Davidson County, 40 percent of hotel guests reserve rooms for meeting and conference purposes, while leisure guests make up 32 percent, followed by business travelers at 28 percent.
While the data does not exist for Green Hills, Spyridon believes business travelers are the area’s main source of occupants due to its central location to downtown.
“Hotels (in Green Hills) are seeing business guests, possibly from companies headquartered here like Nissan or Tractor Supply,” Spyridon explained. “On the weekend, you’ll see friends and relatives, weddings guests or people in town for family reunions.”
Gaylon Shockley, regional manager of Rochford Hotel Group, of which Hampton Inn and Suites Green Hills is a property, says about 80 percent of hotel guests are in town for business purposes. The hotel, constructed in 2000 and renovated three years later, operated as the only area hotel prior to Courtyard by Marriott opening in 2014.
“We see many of the same faces each month,” Shockley said. “Our guests know what to expect when they stay here, which I believe is why we’ve maintained a loyal customer base.”
New hotels in Green Hills
The two new hotels, both operated by Chartwell Hospitality, aim to bring something new to the area. Residence Inn, located at 3807 Cleghorn Ave, will be the area’s only extended stay hotel in Green Hills, meaning the rooms will feature full kitchens and living areas. The 116-room hotel will share a parking garage with Hilton Green Hills, a full-service hotel with 209 rooms, meeting space and a ballroom suited for weddings and corporate events.
The two properties are situated across from The Mall at Green Hills and will offer features to local residents, such as a restaurant called Harth that will offer locally sourced menu items, as well as a rooftop bar. Residence Inn will have street-level retail shops in addition to its more than 30,000-square feet of office space.