How White Lodging helped transform Austin, Texas

The Westin Austin Downtown Rooftop Pool

When the 366-room, 20-story Westin Austin Downtown Hotel opened on July 16, it was a milestone for the city as well as for the developer, White Lodging. For Austin, it was the latest evidence that this central Texas city, the state capital famous for its live music scene, had emerged as a major leisure and group destination.

At the opening, Westin executives paid tribute to that tradition of live music, noting that the hotel’s interior design incorporated abstract elements of musical instruments, particularly the guitar.

But for White Lodging, the stakes were even higher—the latest affirmation that its development strategy was paying off. More than almost any other hotel developer, White Lodging is known for identifying a destination it feels has the demand generators, but is underserved in inventory and then proceeds to develop a range of hotels at various price points there, all carrying a premium brand and targeted at different types of travelers.

New Dual-Brand Hotel

With 15,000 square feet of meeting and event space and a location a block-and-a-half from the Neal Kocurek Memorial Convention Center, the new Westin is well positioned for groups. But White Lodging also broke ground in downtown Austin in late August on a dual-brand, 33-story Aloft and Element project, due for completion in mid-2017. The 278-room Aloft is targeted to hip millennial travelers, no doubt drawn to the annual South by Southwest music festival, while the 144-room Element is targeted to eco-friendly extended-stay guests.

Westin, Aloft and Element are all part of Starwood Hotels & Resorts Worldwide. White Lodging’s Starwood inventory in the market also includes a Westin and an Aloft in the Austin sub-market known as The Domain.

Beyond Starwood, the Merrillville, Ind.-based developer/owner/operator has also partnered on numerous projects in the Greater Austin market with Marriott International and, to a lesser degree, with Hyatt Hotels Corp. and Hilton Worldwide. In addition to The Domain sub-market northwest of the city known for its concentration of high-tech companies, White Lodging has been active in the airport, Parmer Lane and Round Rock sub-markets.

Largest Hotel in Town

Heading its Marriott International inventory in the market is the J.W. Marriott downtown, which opened in February. The 1,012-room, 34-story tower holds the distinction of being the largest hotel in Austin as well as being the largest J.W. Marriott in North America.

Five Residence Inn by Marriott extended-stay properties in different parts of the city are matched by five Courtyards, followed by a pair of Fairfield Inn & Suites properties, a pair of SpringHill Suites hotels and a single core Marriott brand hotel.

According to Lodging Econometrics, Austin had the 10th most active construction pipeline in the U.S. at the end of the second quarter with 72 projects under way, accounting for 9,437 rooms. Of the 72 projects, 26 were under construction (4,527 rooms), 26 were expected to start construction in the next 12 months (2,919 rooms) and the remaining 20 (1,991 rooms) were still in the early planning phase.

Large Majority

The Westin and the J.W. Marriott notwithstanding, a large majority (171) of the 273 hotels currently open in the Austin market—as in most U.S. markets—were not upper-upscale or luxury at the end of the second quarter. Rather, like Aloft, Element and Courtyard, they were upper midscale; midscale like Fairfield Inn & Suites or economy.

In addition to White Lodging, RLJ Lodging Trust, a real estate investment trust; Summit Hotel Properties, another REIT; and Centerbridge Partners, a private investment firm, have been active owners and/or managers in the market. Only 41 of the 273 hotels now open in Austin are unbranded, Lodging Econometrics noted.