Can you envision a Hilton Hotel in Kyle?

The consultants hired by the City of Kyle to evaluate whether the city could feasibly be the location of a major hotel has said a full-service 150-room hotel with 13,500 square feet of meeting space would be a perfect fit.

"We believe a 150-room Upper Upscale, full-service hotel (Hilton, Marriott, Starwood, Hyatt, or similar variation) would successfully meet the needs within the Kyle market area while conservatively planning for future growth in the city," according to the report prepared by Stone Hospitality & Real Estate. "We have recommended approximately 13,500 square feet of meeting space (roughly 90 square feet per room). This figure stems from comparable properties in similar locations and intelligence collected from experienced industry professionals who recommend 70 to 100 square feet of hotel meeting space for every hotel room."

The report is interesting because it seems to me that it relies more on what’s happening in Austin than the current realities of Kyle. For example, the report says: "While the Greater Austin hotel market has enjoyed one of the greatest booms of new hotel supply in recent history, there continues to be absorption of the new inventory; however, we do not expect this trend to continue much longer. For this and other reasons, we are recommending a full-service hotel with 150-rooms. This is not to say that other types of hotel inventory would not work or will not be developed, but that our ‘best’ choice is as presented here."

That doesn’t sound like a ringing endorsement for locating a Hilton-type facility here, but you can decide for yourself by reading the report in its entirely.

The recently announced Comfort Inn, to be constructed behind the Target Store, does not qualify as an "Upper Upscale, full-service hotel," in the Stone analysis. It said the Average Daily Room rate at the hotel it recommends to be located here should be $137.25, based on a 2017 opening. The average ADR at the Comfort Inn ranges from $70 to $95.

Although Stone did not recommend a specific site for the hotel, it was strongly suggested it should be plainly visible from I-35.

"There is a certain degree of intuitive support for a full-service hotel in Kyle," Stone reported. "Occupancies in the competitive market indicate that properties are already highly occupied on Monday through Saturday resulting in the need for additional full-service rooms to accommodate any new business to the area."

Again, you could read the entire report right here.

If we build it, will they come?

According to Assistant City Manager James Earp, the economic development cadre at the City of Kyle would consider the landing of a nice hotel somewhere within the city limits a huge feather in their cap. Not another La Quinta or a Best Western like we already have (both of which, incidentally, are doing quite well, Julie Snyder of the Kyle Chamber of Commerce told the city council last night). But a real hotel, one with an in-house restaurant as well as meeting and banquet rooms which could become the sites of small conventions. A hotel that possibly even provides shuttle service to the Austin airport, the Circuit of the Americas or to UT and Texas State football games.

Problem is, every time the city approaches representatives of these types of hotels, the representatives come back and say "Sorry, the numbers just aren’t there to support that level of an investment in Kyle." Not willing to take "no" for an answer, Earp said the city went first to the company that is consulting them on all things retail and that company said it really didn’t have the expertise to advise the city on the subject of hotels, But, it knew someone who did, Dr. Jeremy Stone, who runs a company called Stone Hospitality and Real Estate. Stone has a bachelor’s degree in environmental design, a master’s in land development and a doctorate urban and regional science. Granted, all three degrees are from Texas A&M, but I am willing to let that slide for the time being. His bonafides appear to be in order.

Last night, the Kyle City Council authorized dipping into the Hotel Occupancy Tax Funds to the tune of $15,000 to $20,000 to pay Stone to, in Stone’s own words:

• "Perform an in-depth evaluation of the market for operation of a hotel facility.
• "Investigate potential and existing demand on a local and regional scale to determine market sources of demand including transient, weekday/weekend meeting demand characteristics and other trends pertinent to the project.
• "Develop recommendations pertaining to the nature and extent of facilities and services that would be the most effective in attracting and accommodating the identified and existing market sources of demand, and evaluate the proposed facilities’ ability to meet future needs."

Or, to put it more succinctly, to determine if what all these other hoteliers have been telling Kyle economic development people is true and, if not, exactly what hotel brand(s) would be the best fit for Kyle.

I asked Earp after the meeting what happens if Stone comes back and says "Yep, everything you’ve heard is true. Kyle is not a good prospect for a hotel of this type." Doesn’t that mean you spent $15,000 to $20,000 for nothing?

Earp, ever the optimist, replied, "Well, at least we will learn what we have to do to attract such a hotel."

Stone promised to deliver his analysis "within four to six weeks after receipt of your written authorization (signed proposal), retainer and the required information." That means we could know something by the end of June or mid-July at the latest.

Watch this space.