The hotel boom in Billings continued last week with the opening of La Quinta Inn and Suites on the West End, and lodging experts say the boom should continue through the rest of the year.
This explosion in the number of rooms may be good news for visitors, who will likely see a leveling off of rising room rates because of the increased competition. For hoteliers, however, the increasing capacity means a greater struggle to fill rooms and find workers to keep them clean.
“It will be a little more of a buyers’ market,” said Steve Wahrlich, a downtown Billings hotel owner and president of the city’s Tourism Business Improvement District.
About 11 million people visit Montana annually, and the number has been rising in recent years, according to the state. In Billings, hotel demand is heavily driven by trips to Yellowstone Park and other outdoor recreation and events at MetraPark, such as high-school sporting events.
In January, Billings had 4,147 hotel and motel rooms, little changed from the beginning of 2013, according to the survey conducted by STR.
By the end of this year, the number of rooms will likely be more than 5,000 — a 20 percent jump for 2014. Much of the expansion has taken place in the past few months.
La Quinta is the third hotel to open in Billings since March, adding a total of 229 new rooms for lodging in the city. It’s at 5720 S. Frontage Road, next to the Cracker Barrel. Hotel Ledgestone opened in March on East King Avenue near the South Billings Boulevard intersection. My Place Hotel opened less than a block away in July.
According to the Yellowstone County Lodging Association, an additional five hotels are planned or under construction with as many as 478 new rooms. Another three to six hotels are rumored to be coming, possibly generating another 200 to 400 new rooms by next May, according to the association and local experts.
In response to the added capacity, the tourism district is ratcheting up marketing to attract more visitors to the area, particularly during off months in the spring and fall, Wahrlich said. The city assesses a $2 fee per rented room for marketing to the tourism district.
Meanwhile, new hotels are marketing their amenities to attract visitors.
The $7.3 million, four-story La Quinta Inn has a meeting space for up to 50, a fitness center and business work space. The pool is geared for families with a large slide and smaller slide shaped like a frog’s mouth.
“Our new hotel offers an upscale environment at an affordable price,” general manager Gail Linnell said in a written statement.
A room with two beds costs $159 a night, while a one-bedroom suite is $179. Hotels typically charge their highest rates during the summer months.
Since 2011, average room rates citywide have risen 20 percent to $91 in the January to July period, according to a survey commissioned by Visit Billings.
The July average rate was $101.36, among the highest in recent years, but Wahrlich, who owns the Best Western Clock Tower Inn, said he expects those prices will stabilize as more hotels open.
“My guts tell me the rates won’t go up,” he said.
The pressure to find good workers will, however. Yellowstone County’s unemployment rate is between 4 and 5 percent, and businesses in the service sector — including restaurants and hotels — are competing for quality workers.
“Personnel needs will become huge,” Wahrlich said.
Officials at La Quinta said they’ve operated in Billings for nearly three decades, and they see the need for another hotel in the growing city. The new hotel is owned by Sioux Falls, S.D.-based Kelly Inns, which owns two other hotels in the Billings area.
“We continue to invest in this vibrant business environment. Billings is a leading city in Montana and in the Rocky Mountain region,” Kelly CEO Brenda Schmidt said in a written statement.