A third hotel is about to rise on the Richardson International Airport campus and battle lines are being drawn in the effort to win customers.
Two independent Toronto developers -- Paresh Raja of Brock Hotels and David Kemper of Belmont Equity Partners -- are building a $20-million, 120-room Courtyard by Marriott on a surface parking lot on the eastern side of the airport grounds, directly east of the FourPoints by Sheraton Hotel.
It will bring the total number of rooms on the airport campus to about 400 when it is built by the spring or summer of 2014. Lakeview Management's 80-room Grand Hotel is to open next summer. That company also owns the 150-room FourPoints by Sheraton, which has typically been the highest-occupancy hotel in the city for some time.
The latest new hotel development is part of a major boom in the business in Winnipeg. Not counting the just-opened Holiday Inn on Ellice Avenue, there are now five new hotels under construction or in the works in the airport/Polo Park region.
But the two Toronto developers, who are partnering for the first time, are not afraid of entering a competitive market.
"We realize there is a lot of new product coming online," said Raja, whose company has seven other small hotels including Best Western hotels in Oshawa and Guelph. "There is a general upgrading of the market taking place. We feel this offering will be able to carve out its own little niche."
Although none of the parties would say it, it's likely this will be the last hotel on the campus for awhile.
"There's no question we're always considering what will be the tipping point in a market," Kemper said. "You don't want to have too much product without enough new demand-drivers. But we think there are things on the horizon that we feel quite comfortable will drive demand. But even if demand turns out to be less than expected, our capital structure will be able to handle that."
Belmont Equity Partners is a private real estate investment and development company based in Mississauga with interests in more than $225 million of office, industrial and retail properties in Ontario and Montreal.
They also have the security blanket of the loyalty-rewards programs from a growing brand such as Courtyard by Marriott.
Manlio Marescotti, a senior executive with Marriott Hotels & Resorts, said the Courtyard product -- which he said "created the upper moderate tier" -- is on a growth spurt. On a stand-alone basis, Courtyard by Marriott is the 11th-largest chain in the world.
It recently had properties open in Calgary and Ottawa and there are 10 more in development in Canada, including the one in Winnipeg.
Jim Baker of the Manitoba Hotel Association said brand loyalty is a big deal among frequent travellers. With broad coverage around the world, the Marriott brand has a lot of followers and a Winnipeg Courtyard by Marriott property probably has a built-in client base just from the loyalty program.
It's an angle the two Toronto developers are hoping will come into play. But even with the plethora of new hotels, developers are clearly confident the business will be there.
Barry Rempel, chief executive officer of the Winnipeg Airports Authority, would not say definitely that this would be the last hotel on the property, but he came close.
"Is this the last hotel? I can't say, because 20 years from now who knows," Rempel said.
"But I can say we are trying to be prudent and working with the community in a sustainable fashion."
In other words, the WAA wants its partners in development deals to be successful.