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The new Scion Dallas hotel — the latest concept from Trump Hotels —will bring a total… more
President Donald Trump’s namesake hotel brand — New York City-based Trump Hotels — has been scouring Dallas-Fort Worth for development sites to build 4- and 5-star upscale hotels, including tracts in Dallas’ central business district, the Turtle Creek area and Legacy West.
Trump Hotels, which has been searching for North Texas sites since March 2016, has been attracted to the Big D because the city has turned into a destination for business. But Trump Hotels has yet to place a flag in the ground — even after allegedly having a signed letter-of-intent in place on a parcel in downtown Dallas.
That could be because there are thousands of new hotel rooms in the development pipeline in Dallas-Fort Worth, said Hank Wolpert, vice president of HREC Investment Advisors.
"The boutique upscale hotels have a lot of appeal and this is a convention city, but there are a lot of rooms coming to the market" Wolpert told the Dallas Business Journal."The Virgin Hotel in the Design District is also a formidable competitor."
Wolpert said if Trump Hotels wants to put a Scion-branded hotel or a namesake Trump hotel, it will take a combination of finding the right development partner to help pull off a hotel with ties to the controversial U.S. leader.
With upwards of 4,000 rooms in the development pipeline in downtown Dallas, he said, and two boutique upscale hotels being developed by Dallas-based Sam Moon Group in Legacy West — the market is getting crowded.
And that’s not to mention the recently opened new Omni-branded hotel, which was developed in partnership with the Dallas Cowboys, at The Star in Frisco or new hotels opening or under construction along the Dallas North Tollway or the Sam Rayburn Tollway.
"A developer has to decide if they wait for the demand to build up from these big companies to build a hotel or if they want to build the hotel ahead of demand — it’s kind of a hard call," Wolpert said. "You could go either way."
Trump Hotels has yet to sign a letter-of-intent in Legacy West, with no ETA on a potential LOI. A letter-of-intent will need to be signed before a real estate deal comes to fruition.
Meanwhile, the development tract near Dallas City Hall once earmarked for a Trump Hotels Scion hotel has remained a surface-level parking lot. The outstanding deal to sell the two parcels totaling nearly one-acre has been extended by an oral agreement as Turkish developer Mike Sarimsakci tries to rally a development plan.
The six-month extension began on Sept. 1 and it has yet to be formalized by a legal contract, said Larry Hamilton, CEO of Dallas-based Hamilton Properties Corp.
Despite the number of hotels either announced or under construction in Dallas-Fort Worth, the latest hotel forecast by CBRE is calling for RevPAR (revenue per available room) to increase by 1.4 percent by year’s end.
That RevPAR is less than the national projection — a 3 percent increase — in part because of the new supply hitting the Dallas market.
"With great economies come new hotels, and the first quarter dip in occupancy is the result of new investments to develop new hotels," said Jeff Binford, director of CBRE Hotels’ Consulting.
Binford added that the current rate of new hotels being developed in the market is temporarily exceeding the rate of occupied rooms and new visitors to the area, resulting in the lower occupancy rates. But he is still bullish on North Texas’ hospitality future.
"The Dallas hotel market remains vibrant for the foreseeable future," he added.