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Room for More Rooms
New hotels welcome resurgent visitors despite supply-chain challenges
By Vanessa Orr

ourists returning to Alaska after the drought of 2020 had plenty of new and renovated hotels to choose from in 2021. Construction seemingly never ends, even in the face of materials shortages, rising costs, and transportation headaches.

“I would say that things are running on average,” says Alicia J. Maltby, president and CEO of the Alaska Hotel & Lodging Association. “It seems like a few things have stalled due to COVID, but if we had not faced a pandemic, several of these projects would already be open, which would keep the state on par with the number of average openings that we have seen in the past five to ten years.

“I think builders are facing the same challenges that all consumers and employers are facing, including materials that are not available and staffing,” she adds. “Every industry has been impacted by the pandemic and the lack of raw materials; add to that the challenge of finding employees that are qualified and ready to work, and it’s an on-going challenge.”

While some projects have been put on the back burner, others are beginning to ramp up in the new year as tourism begins to rebound and travelers once again put Alaska at the top of their bucket lists. According to Visit Anchorage, hotel demand was up 47 percent between May and September of 2021 compared to the same time period last year, a positive yet not unsurprising trend given the anomalous nature of 2020.

“I am very cautious to say that the industry rebounded and is in full recovery mode, but the 2021 season was definitely a bright spot in what had been a very challenging two years in the tourism industry,” says Maltby. “Alaska was looking at record bookings for 2020 before the pandemic, and though 2021 did not bring the number of visitors that we have grown accustomed to, it definitely was a look into the future, which has made industry leaders extremely optimistic for the 2022 season.

“If the need wasn’t there for more hotel rooms in the state, I can say with great confidence that these business owners and developers would not be spending the millions of dollars required to open a new property,” she adds. “Free enterprise is an amazing thing, and bringing more competition into the market will ultimately make the rates for hotel rooms in the summer months much more competitive.”

Just In Time

In September, the Gateway Hotel in Seward completed its first summer season. The 74-room hotel, which includes three family suites, booked up early for 2021 and is already looking at a successful 2022.

“Stuff books out really early in Seward, and that was proved this summer,” says General Manager Lyrissa Hammer. “For being a brand new hotel with zero reviews, we had a lot of 100 percent-booked days.

“If you look at Google Street View, we’re still a parking lot,” she says, laughing.

Tom Tougas, the majority owner with partners of the Seward Gateway Hotel, Major Marine Tours, and the Harbor 360 Hotel, saw a need for more space for tourists. According to Hammer, “There were a lot of people pushing to get more hotel rooms in Seward, and Tom realized that the only way to get them was to build them.”

Located at the south end of the Seward Small Boat Harbor, the hotel portion of the building is open from May through September, and it also offers a year-round events center that seats eighty people.

“We’re really excited about the events space because there’s not much of that in Seward—we have a very limited number of larger gathering spaces,” says Hammer. “We’re working with the Chamber of Commerce to attract conferences. We’re also hoping that we can host retreats for large churches or military groups.”

The hotel was originally supposed to open in summer of 2020, but it was not completed until December of that year.

“If the need wasn’t there for more hotel rooms in the state, I can say with great confidence that these business owners and developers would not be spending the millions of dollars required to open a new property.”
Alicia J. Maltby, President and CEO
Alaska Hotel & Lodging Association

“We had to deal with all kinds of shortages,” says Hammer. “The wall lamps didn’t show up until March of this year—they kept getting delayed. The phone system, which was supposed to be installed in May 2020, got put in three days before we opened. We got half our order of mattresses, and the other half came months later after the container accidently got shipped back to Washington. We got TVs a week before we opened.

“It all pulled together, but March and April were exciting months,” she laughs.

Because of its affiliation with Major Marine, its sister company Harbor 360, and other major tour operators, the Gateway Hotel was able to fill its first season fairly easily.

“Major Marine sold stay-and-play packages where, if guests booked a wildlife cruise and room, they got a discount at both places,” says Hammer. “We did a lot of sales calls to other major tour operators telling them about the property, and if Harbor 360 sold out, they pushed people our way. We relied on a lot of the relationships we have in the tour industry.”

According to Hammer, the hotel already has quite a bit of group space blocked for 2022, filling the allotments they’ve made with other tour operators. “Every day, we’re getting emails, calls, and bookings off the website,” says Hammer.

Hits and Misses

Hilton is on track to open a 107-unit Home 2 Suites in Wasilla at The Shoppes at Sun Mountain. Developer Cameron Johnson told the Mat-Su Valley Frontiersman in May 2020 that the hotel would tentatively open in 2022. Once built, the hotel will feature an indoor pool, fitness center, laundry services, breakfast area, and expanded modern meeting space.

Sitka’s Totem Square Hotel & Marina is expected to reopen for business in April of 2022. The 75-room hotel closed for renovations in October. Recently acquired by JL Properties, plans for the waterfront property include brand new guestroom furniture, fixtures, and equipment; lobby upgrades including a breakfast room; a new fitness center; and enhanced guestroom WiFi.

However, those targets could shift depending on external factors. For example, construction is still slated for 2022 on the new Holiday Inn Express Anchorage and Candlewood Suites in Midtown. Whether that begins in spring or late summer is uncertain, according to Casey Thompson, regional manager for TKO Hotels.

“Our original plan was to get the dirt work and foundation finished in fall 2021 and start the actual construction next spring/summer, which we’re hoping is still on course,” he explains. “We’ve had some delays already with the site and products and labor, so we may get started later in the summer than we had originally planned.”

The project consists of two buildings, approximately 100 rooms each, sharing a lobby on adjacent lots at C Street and 48th Avenue. The Holiday Inn Express is aimed at short-term visitors, while the Candlewood Suites provides kitchenettes and full-size refrigerators for weeks-long stays. The conjoined hotels are being developed by The Koehler Organization, based in South Dakota, with ACSC Builders of Fairbanks serving as general contractor.

The 74-room Seward Gateway Hotel completed its first summer season in May 2021. It is already quickly booking up for 2022.

Seward Gateway Hotel

The 74-room Seward Gateway Hotel completed its first summer season in May 2021
The 74-room Seward Gateway Hotel completed its first summer season in May 2021. It is already quickly booking up for 2022.

Seward Gateway Hotel

It is already quickly booking up for 2022

Thompson estimates that, if work can begin this spring, the hotel will likely open the following winter. Construction value is $22 million, but Thompson says the price tag is almost as uncertain as the timetable.

“We’re still going forward, though we don’t know what supply costs and availability are going to do to the project,” Thompson adds. “We’re seeing other projects around the country get substantially delayed because they are not able to get furniture and fixtures, but we don’t know what the supply chain will look like by this later this year. It could be fixed by this spring or it could be a long, tedious process. We don’t know what we don’t know.”

Also on Hotel Row in Midtown, construction to replace the Courtyard by Marriott that caught fire during construction in 2019 is still planned, but the project is on hold. Ric Marko of Anchorage MC Holding told the Anchorage Daily News in April that the 141-room hotel, with a value of $35 million, is being delayed while the company sues underwriters with Lloyd’s of London insurance company. Construction won’t resume until the insurance payment is complete.

For different reasons, construction is stalled indefinitely on The Hotel Indigo, a $60 million luxury hotel to be built on top of the Downtown Transit Center at Sixth Avenue between G and H Streets. In this case, the holdup is a contract dispute between Irwin Development Group and the landowner, the Anchorage Community Development Authority. The project was originally scheduled to start construction in May of 2021.

“The wall lamps didn’t show up until March of this year—they kept getting delayed. The phone system, which was supposed to be installed in May 2020, got put in three days before we opened… We got TVs a week before we opened. It all pulled together, but March and April were exciting months.”
Lyrissa Hammer
General Manager
Gateway Hotel
Waiting for Rooms

Some pre-pandemic renovations awaited 2021 visitors at hotels owned by Anchorage developers JL Properties. Work on the Bridgewater Hotel and the River’s Edge Resort, both located in Fairbanks, and at the SpringHill Suites Anchorage Midtown and the Residence Inn on East 35th Avenue were completed before the pandemic hit.

“We did a full fourteen-year refresh cycle on both properties,” says Anton Villacorta, project manager for JL Properties. “We put all new furniture in the guestrooms in the SpringHill Suites, changed out the tubs and showers, expanded the lobby, and added all new fitness equipment. We changed everything from top to bottom, including the outside of the building.”

Extensive renovations at the 148-room Residence Inn included gutting all of the rooms, adding new finishes, wallpaper, carpet, and tile, and refreshing the public spaces, including the breakfast area and meeting rooms. A brand-new fitness facility was added along with some exterior improvements.

Developers Jonathan Rubini and Leonard Hyde had planned to open a new Anchorage location, The Aloft Hotel, in spring of 2021, but that’s been postponed until spring of 2022.

“Around May of 2020 we realized that our original opening date wasn’t going to work out, so we furloughed the project for roughly eight to ten months and restarted construction in January of 2021,” says Villacorta. “Things are going well, though there have been setbacks with supply challenges; as anyone who has ordered anything in the last couple of months knows, there have been a lot of delays.”

The Aloft, a Marriott International brand, is a 146-room hotel and conference facility being built at the southwest corner of C Street and 36th Avenue. It will cater to tech-savvy tourists and offer voice-activated features and door locks controlled by mobile phones, along with the WXYZ Bar & Re-Mix Lounge. A 3,000-square-foot conference facility will offer room for weddings and other events.

“While a 3,000-square-foot conference facility is not typical of the Aloft brand, we recognized in this local market that it would help us capture more guests than the typical Aloft target market,” says Villacorta.

MCG Explore Design designed the new hotel, which is being built by Davis Constructors & Engineers. When completed, approximately $37 million will have been invested in the project.

“At this point, we’ve got the roof on, the building is dried-in, the windows are in, and we’re starting interior finishing,” says Villacorta. “We’re doing the four-story hotel in phases, with the public areas being the last to come together. We’re going full speed ahead.”