La Quinta Inn & Suites - Duluth's newest hotel - opened Thursday along the Miller Hill corridor, adding nearly 100 rooms to the local lodging pool.
The new $10 million, three-story hotel at 1805 Maple Grove Road sports an upbeat, contemporary look, mid-level rates that start at $129 a night, a fitness center, hot breakfasts and a handicapped-accessible saltwater pool equipped with lifts.
While the hotel is similar to other newly built La Quintas around the country, the new Duluth inn - a franchise owned by Morex Properties of Fargo, N.D. - differs with a Lake Superior-inspired theme. Deep, patterned blue walls suggest waves. An expansive image of the Aerial Lift Bridge backs the front desk. Accent walls resemble birch trees, and pictures of local sights decorate rooms.
Because it's the first La Quinta in the Northland and everything is fresh and new, it's bound to generate interest among visitors.
"Everybody wants to stay at a new hotel," said Jennifer Chesney, the inn's assistant general manager. "But our hotel won't be new forever. So it has to be our customer service that keeps them coming back."
That could prove challenging as four more new hotels open in the Duluth area in the next couple of years.
Construction has begun on Pier B Resort with 140 rooms on the downtown Duluth waterfront. A Hampton Inn & Suites with 75 rooms is planned for Superior, near Barker's Island. And two more hotels are coming to the Miller Hill corridor - a Holiday Inn Express & Suites with 80 rooms on the former Cinema 8 site in Hermantown, and another Hampton Inn & Suites - this one with 91 rooms - behind Texas Roadhouse in Duluth. Plans for another hotel, a Staybridge Suites at Central Entrance and Blackman Avenue, apparently have been dropped.
The new hotels, including La Quinta, will boost the number of hotel rooms in the Twin Ports by nearly 500. In Duluth alone, it will increase the current stock of 3,000 rooms to about 3,330.
The new hotels follow last year's opening of the Park Point Marina Inn in Duluth with 68 rooms and the opening of the Duluth Marriott Residence Inn with 92 rooms a few years ago.
"The Duluth area is undergoing the first significant influx of more rooms since the mid-'90s when we saw Canal Park explode," said Anna Tanski, CEO and president of Visit Duluth. "We haven't seen this kind of development in 20 years. It remains to be seen what the saturation point is, but I don't think we're there yet."
Duluth is not alone.
Rochester also is going through a boom, and so are some suburban areas in the Twin Cities, said Dan McElroy. executive vice president of the Minnesota Lodging Association, an industry trade group.
He said some of it is due to pent-up expansion needs, because there had not been much hotel construction since the start of the recession in 2008. Some of it is due to aging hotel stock. Some of it is to refresh and rebrand properties. And some of it is to meet the demand for the kind of upgraded amenities people are looking for today, he said.
Are more hotels needed?
"I don't think 'need' is the word I would use," Tanski said of the coming new hotels. "It provides more options for our visitors, especially a brand like La Quinta that is new to our market. It brings in their loyal customers with their rewards program."
With Duluth a seasonal market, hotel occupancy goes up in the summer - especially on the weekends and during special events such as Grandma's Marathon - and slows in the winter. But Duluth's year-round average of 60 to 62 percent occupancy is still pretty good, Tanski said.
"There are certain weeks and days when it can drop below that at some properties and some where it's 30 percent higher," she said.
Ellen Betzold, the general manager of Fairfield Inn in Duluth, said she believes more rooms are needed.
"I do see there is enough demand," she said. "On nights when we're sold out, people call and call looking for rooms."
The Fairfield Inn, on Joshua Avenue across from Miller Hill Mall, gets a mix of business travelers, shoppers and tourists. But Betzold says a growing number of guests are people working temporarily in the area or new workers in town staying there until they find permanent housing. She sees that transitional segment growing as the city moves toward its goal of population growth.
"Will the rooms sit empty in the winter?" she asked. "Yes, but we're not going broke, because of the winter demand for transitional housing. That has motivated people to invest in hotels."
Duluth's average occupancy is on par with the 2014 statewide average of 62 percent and the U.S. average of 64 percent, according to data used by the Minnesota Lodging Association.
But occupancy rate alone doesn't determine whether more hotels are needed, McElroy said.
"Some of this is not just about the number of rooms but the style and type of rooms guests are looking for," he said.
Besides inns that can accommodate guests for extended stays, demand is growing for hotel brands such as Hampton Inn that provide more amenities than an AmericInn or Super 8, but less than a full-service hotel, he said.
La Quinta and most of the new hotels coming to the Twin Ports fall into that mid-rate, enhanced-service category.
Next: Holiday Inn Express
Farther up Miller Trunk Highway, construction began last week on one of them, a Holiday Inn Express near Haines Road and Mall Drive. The five-story hotel will open next summer.
Behind that project is Lion Hotel Group, which also owns and operates the Holiday Inn Hotel & Suites in downtown Duluth. Its CEO, Mark Labovitz, said he expects the hundreds of additional hotel rooms coming to the market will cause occupancy levels to drop slightly.
"There will be plenty of hotel rooms in Duluth for quite a while," he said. "We are well supplied."
Being a brand-new hotel is an advantage, but it's also a disadvantage because people may not be aware of it, Labovitz said. But he's confident the timing of new Holiday Inn Express is right and that it will do well with tourists, shoppers, and airport and other travelers.
Like La Quinta, it will have a pool and hot tub, a fitness center and a small business center and complimentary breakfast and shuttle service. The Express also will offer overnight parking for airport travelers and space for large recreational vehicles and trailers.
Filling more rooms
"Duluth is a very dynamic market," Tanski said. "It's not like the Twin Cities where Monday through Fridays is peak and it falls off on the weekends."
In its mission to promote Duluth as a destination, Visit Duluth works to fill in the slower times during the week with conventions, conferences, tournaments and other draws.
"We try to shoulder the blow midweek versus weekends," Tanski said.
Hotels also respond to the fluctuations with special rates and other incentives for the slower times.
But the current hotel building boom will add to Visit Duluth's challenges as hotels feel the impact in the next 12 to 18 months. Existing properties will have to face more competitive rates as they vie for the same customer pool, she said.
"Our job is to bring more visitors here in response to fill the greater number of rooms," she said.
To draw more people, they're looking toward western Duluth and the plans to boost recreational attractions throughout the St. Louis River corridor.
"We really see that as the next big draw to Duluth since the development of Canal Park's attractions in the early 1990s," Tanski said. "That was the last big push. Now we're poised with western corridor development. A lot of momentum is going into that."