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Strategy

Springfield's Hotel Boom

Springfield’s hotel scene has seen an impressive growth spurt, but some officials are cautioning the market is oversaturated. We talked with six hotel developers who are betting on Springfield.

By Ettie Berneking | Art Direction by Alex Wolken

May 2019

Hotel Vandivort, luxury hotel in downtown Springfield, MO
Photo by Brandon AlmsThe luxe life is available to travelers and residents alike thanks to luxury suites in hotels like Hotel Vandivort. Purchase Photo

Springfield has enjoyed a surge of new hotels during the last few years. Although the growth has been a bonus for the city’s business traveler and visitor, there is a question of whether the jump in available hotel rooms is growing too quickly. The city’s Convention and Visitors Bureau is warning that the market is already oversaturated, and more than 500 new hotel rooms are scheduled to come online between 2019 and early 2021. Even many area hotel developers admitted that the market is at risk of flying past demand. But that doesn’t seem to be stopping new hotels from breaking ground.

Maybe they see a growing market of visitors and tourists. Maybe they see the potential draw from attractions like Wonders of Wildlife, which brought in 1.6 million visitors in its first year of business. Maybe they’re hedging their bet on Springfield’s growing segment of business travel. Or maybe they’re being foolishly optimistic. Whatever it is, one thing is for sure: Springfield’s hotel industry is surging. Now the only question is how long that surge can last if demand for rooms doesn’t surge with the supply. To get a better understanding of which types of hotels are making their way to Springfield and to learn what’s drawing them to the Queen City, we talked with six hotel developers who all have big plans for the future of Springfield.

Learn more about new local hotel concepts:

Is the Market Truly Oversaturated?

Before diving into Springfield’s growing hotel industry, it’s worth pointing out the obvious. “People don’t go to a city to stay in a hotel,” says Tracy Kimberlin, president of the Springfield Convention and Visitors Bureau. People travel to visit family, see a ballgame or attend a concert or a business function. The hotel comes in when they need a place to crash. Increase a city’s draw as a destination, and the number of hotel rooms increases with it. That’s exactly what’s happening here.

As the city becomes more of a destination with the growth of MSU, business headquarters and Wonders of Wildlife, the number of hotel rooms has jumped 13.3 percent between January 1, 2018 and February 28, 2019, according to the CVB, which said 195 new rooms opened last year and 569 additional rooms are expected to be finished between this year and early 2021. That increase worries Kimberlin.

“Building more hotel rooms can actually be a bad thing,” he says. “If supply gets out of whack with demand, you end up with a rate war.” As available hotel rooms surge, Kimberlin has already seen trouble. In January, Springfield’s room sales were down 1.7 percent, and by February it dropped 5 percent according to Kimberlin. Despite the dip in room sales, Matt Morrow, president of the Springfield Area Chamber of Commerce, is excited about the hotel boom. “Building hotel capacity can bring about additional pressure needed to get those amenities,” he says. By amenities, Morrow  means convention centers and athletic facilities. As Morrow explains, Springfield’s convention space is spread out around town. Morrow wants a full-size convention center attached to a high-end hotel. He would also like to see a new indoor athletic facility like the one in Cape Girardeau.

Springfield, MO Hotels by the Numbers

To get a better understanding of how much Springfield’s hotel industry has grown the last year and the impact the industry has on the city, we turned to the Springfield Missouri Convention & Visitors Bureau for a breakdown of the numbers.

5,826

Hotel rooms in Springfield as of February 2019

195

New hotel rooms added from 2018 to 2019

1,375,942

Number of hotel rooms occupied in 2018

1,326,252

Number of hotel rooms occupied in 2017

569

Hotel rooms opened, under construction or planned from January 1, 2019 to early 2021
Decrease in Amount Generated in Room Sales:

▼1.6%

Comparing numbers from January 2018 to January 2019, room sales are down 1.6%

▼5%

Sales were also down 5% when you compare February 2018 to February 2019


A massive athletic facility could be a big draw for Springfield. This year, Springfield hosted the National Christian Homeschool Basketball Championships and the MSHSAA state basketball championships. More than 400 teams arrived in Springfield, and the city scrambled to find courts. “We had to round up 30 gym floors from Springfield Public Schools to Missouri State University,” Kimberlin says. “It’s a challenge that we don’t have an indoor sports facility that has more than four courts under one roof.” In comparison, Cape Girardeau’s facility has eight basketball courts and two soccer fields.

The CVB commissioned a $70,000 study to evaluate the impact of developing a convention and events center near WOW and Bass Pro Shops. According to the study, a new center could create up to 800 new jobs over 10 years and bring in $1.1 billion over 20 years. “A convention center would create demand,” Kimberlin says. “But the whole idea is to create demand for more than hotels; you want to create demand for the whole city.”

While talks with potential developers interested in a convention center are underway, the number of hotel rooms in Springfield keeps increasing. Kimberlin worries that supply and demand is already out of balance, but Morrow sees a lot of potential and some new opportunities on the horizon.

Tru by Hilton millennial hotel Springfield MO
Photo courtesy Bryan PropertiesTru by Hilton is a new concept by Hilton meant to attract millennial travelers. Opening Date: Fall 2019

The Year of the Millennial

For anyone following the hotel industry, 2019 could be described as the year of the millennials. Chains big and small have launched brands to attract the millennial traveler. Marriott has Moxy, Best Western has Vib, and Hilton has Tru.

Hilton first announced Tru in 2016. By May of 2018, Hilton reported 300-plus Tru hotels were in the pipeline. The first location opened in Oklahoma City, and now there are at least 50 Tru locations in the U.S. If construction moves as planned, Springfield will appear on that list this Labor Day. Bryan Properties is developing the four-story mid-level hotel, which will be the second Tru in Missouri. The other is in St. Charles.

The Springfield addition will put Tru on the doorstep of Missouri State University. “It will be a great location for athletics and families visiting students,” says Brad Gebhard, COO/CFO of Bryan Properties. “We feel it will be a bridge between MSU and downtown.” The company had a south side site picked out for Tru, but after the company relocated its corporate office to Walnut Street, it decided to also change its plans for Tru. “We really have an interest in getting integrated in development in downtown Springfield,” Gebhard says. “We also felt the Tru brand was more suited for an urban setting.”

Tru by Hilton millennial hotel Springfield MO
Photo courtesy Bryan PropertiesThe Elm Street Tru Hotel is the second location in Missouri. It is projected to open this fall.

To make room, Bryan Properties demolished six homes along Elm Street. That section of Elm is largely made up of rental homes, but a new student housing complex is set to open in fall. The Tru project is familiar territory for Bryan Properties, which owns and operates Hampton Inns in Branson—another Hilton brand. Tru doesn’t stray from Hilton’s economy price point, but it’s a departure from the brand’s aesthetic. “Technology is at the forefront of this offering,” Gebhard says, “It also has an emphasis on gathering places and community.”

The lobby is much more of a focal point at Tru locations, where you can check in, get some work done, gather with friends or enjoy a meal. Wi-Fi is free, charging stations are basically everywhere, the 24/7 market is stocked with local snacks and even single-serve wine and beer, and the traditional breakfast bar has been upgraded with a wider selection. The hope is that the less formal environment appeals to younger travelers, and Gebhard is optimistic about the future.

“We averaged 64 percent occupancy in the market last year. The growth of Springfield and especially downtown will continue to advance.”
— Brad Gebhard, COO/CFO, Bryan Properties

“We averaged 64 percent occupancy in the market last year,” he says. “The growth of Springfield and especially downtown will continue to advance.” But even with the arrival of Wonders of Wildlife, which Gebhard says, “really moved the needle for Springfield,” there’s risk of oversaturating the hotel market. Gebhard says the key to avoiding overcrowding is to develop hotels in underserved pockets. “As long as we hit the mark on those pockets with low in-brand competition, we should be fine,” he says. “There are always plenty of hotel rooms in every market, and there are more in the pipeline every day.”

What keeps Gebhard and Bryan Properties sanguine is the diversity of Springfield’s visitors. Unlike Branson visitors, which Gebhard describes as 100 percent tourism-driven, Springfield draws a mix of business travelers, athletes, families visiting college students and weekend fun-seekers. The hope is that millennials will be drawn to the price point and amenities Tru is offering.

Photo courtesy Sapp Design ArchitectsPlans for The Ridge in south Springfield, off of Campbell Avenue. Opening Date: 2021

Dreaming Big

Phil Williams and Trip Rhodes plan to add two hotels to Springfield’s south side—fingers crossed. These two developers are still in the planning stages of their $500 million development dubbed The Ridge, which will be located off of South Campbell Avenue. So far, the plans are ambitious, to say the least. They purchased 100 acres of undeveloped farmland and have since brainstormed blueprints for a high-end mixed-use space. If everything goes according to plan, that rolling farmland will eventually be turned into retail, office space, loft-style apartments, a continuum of care facility, bike paths and outdoor entertainment space, plus two hotels and a convention center. But before Williams and Rhodes—with RW Development—can start daydreaming about new hotel rooms and everything else they have planned at The Ridge, they have to first break ground on the property’s infrastructure. Public roads have to be put in place and water and sewer have to be run before anything else can go vertical. With that in mind, talk about a new hotel, let alone two, seems a little premature. In fact, Williams and Rhodes aren’t even sure if they’ll be the ones developing those two properties. What they do know is south Springfield could use a high-end, full-service hotel.

“Everything is on the north side,” Williams says. He’s not entirely wrong. During Springfield’s growth spurt in the ’90s, most hotels were developed along north Glenstone Avenue near I-65. As residential neighborhoods and businesses crept south, hotels have been slow to follow. There’s the Holiday Inn Express, a Candlewood Suites, Residence Inn and a Hilton Garden Inn, but those nightly rates hover around $150. Williams and Trip would like to see a high-end hotel pop up at The Ridge to serve the business travelers and medical professionals who work on the south side. Attach a convention center to the operation and build a mid-level hotel nearby, and you’ve got their dream scenario. “I think this could be a symbiotic relationship,” Williams says. “The convention center would draw people in, and the two hotels could feed off of that.”

The businesses could also feed off of the daily foot traffic RW Development hopes to see as a result of the mixed-use property. The idea is that all the businesses and events hosted at The Ridge will draw in outside visitors who can enjoy a more urban setting without having to head downtown. Restaurants, shops, bars, entertainment and lodging will all be housed at The Ridge. The two hotels and convention center are just one piece of this $500 million puzzle.

Airbnb loft above Refine Studios on historic Commercial Street Springfield MO
Photos by Beth Solano Photography, Elise Abigail PhotoMaster bedroom in an Airbnb loft above Refine Studios on historic Commercial Street.
Kitchen in an Airbnb on Urban Roots Farm near downtown Springfield
Photos by Beth Solano Photography, Elise Abigail PhotoKitchen in an Airbnb on Urban Roots Farm near downtown Springfield.

New Regulations for Airbnb and Short-Term Rentals

As of January 28, Springfield City Council passed new regulations that restrict short-term rentals like Airbnb. We talked with City Planner Daniel Neal to learn more about how the new regulations will impact the market.

Biz 417: When did city council start considering regulations? 
Daniel Neal:
This process started about three years ago when we were receiving concerns and complaints from citizens noticing there were transient guests and people coming in and out of homes in their neighborhoods. The council weighed the character of the neighborhoods, and in the end the people immediately adjacent to the property owners. They should know what’s going on.

Biz: What did you learn about the short-term rental industry in Springfield?
DN:
When we started researching this, we were in the ballpark of 30 to 50 short-term rentals. As time went on, it kept multiplying to where we were in the hundreds.

Biz: What were neighborhood residents worried about most?
DN:
They were worried about parking and overcrowding and the toll it could take on their services in the area.

Biz: What’s the elevator-pitch version of the new regulations?
DN:
Council wanted three types of short-term rentals. Type 1 is an owner-occupied rental where the owner lives in the home but can rent it out while they’re away as long as they don’t rent it out for more than 95 days each year. Type 2 rentals are not an owner-occupied residence and can be rented out the entire year. Type 3 is a short-term rental above a commercial building.

Biz: What worried the council? 
DN:
The type 2 is the one the council really focused on because they saw the potential this could have on changing the character of a neighborhood if you had multiple short-term rentals all in one block. That could turn a single-family neighborhood into a kind of hotel.

Biz: What business requirements are attached to short-term rentals?
DN:
All three have to get a business license, but Type 2s have to hold a neighborhood meeting with property owners within 500 feet to let them know they’re operating a Type 2. Then 55 percent of adjacent property owners have to agree to let the short-term rental be there. There is also a building inspection to address health or safety issues like proper access in and out of the house and ensure working smoke detectors are installed.

Biz: What are the restrictions in terms of short-term rental density?
DN:
You can’t have more than two on a block face, which is one side of the street on a block. So you can have two on either side of the street, and this doesn’t apply to Type 1 short-term rentals. Type 3 units can have no more than two units.

Biz: Which areas of Springfield have the highest density of short-term rentals in them?
DN:
The area around MSU is the highest density concentration, which is why we had that initial meeting with the Rountree and Phelps Grove neighborhoods to learn what kind of issues they would have with this regulation.