Article via Nashville Business Journal:
The developer of a hotel near the Gaylord Opryland Resort & Convention Center expects to start construction next week, on the heels of Metro approving a $14.9 million building permit for the work.
The forthcoming Residence Inn extended-stay hotel is a reminder that Nashville's hotel boom isn't confined just to the urban core (as our Crane Watch development map shows). To underscore that point, the developer on this project, Nashville-based Pinnacle Hospitality Partners, has at least three others in its pipeline. All of which could break ground by year's end, most notably a 14-story Holiday Inn & Suites one block from downtown's Music City Center (as well as hotels in Brentwood and Goodlettsville).
The surging cost to book a room downtown is pushing more tourists, convention attendees and traveling business executives to book hotels further from downtown in the hopes of finding lower prices. The cumulative demand from those three types of customers far exceeds Nashville's existing supply of rooms, making it a magnet for hotel developers and producing growth in room rates and occupancy levels that rank the best in the nation, according to industry research firm STR Inc., of Hendersonville. STR says the average hotel room in the region costs $128 on a weeknight, up 30 percent from 2013. And that's just the average — hotels in urban Nashville can be triple that price, or even more.
"The rates are so high downtown that it will push people to surrounding areas," said Ray Dayal, co-founder and CEO of Pinnacle Hospitality.
The 125-room Residence Inn will be located at 2500 Music Valley Drive, amid a cluster of other hotels. According to Dayal, the Residence Inn will be the only extended-stay hotel near Opryland, which gives Dayal hope that he will attract business from vendors serving conventions at that facility. Opryland has roughly 600,000 square feet of convention meeting and exhibit space, according to data provided for our Book of Lists research. That makes Opryland the region's second-largest convention facility, behind only Music City Center, which opened three years ago in SoBro.
Pinnacle Hospitality bought its 4.4-acre property in 2012 and tore down a larger shuttered hotel on the site. Dayal, a longtime Nashville hotelier, said he expects to close on a bank loan this week to finance construction of the Residence Inn.
Pinnacle Hospitality hired Nashville's Biscan Construction to build the hotel. Dayal said it should open by fall 2017.
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