Lebanon
Construction crews have begun laying the foundation for developer Jay Campion’s Hilton Garden Inn and Conference Center on Route 120 as it awaits its full building permit in time to be ready for opening next fall, said Eben Tormey, project manager at XSS Hotels, the project’s co-developer.
“We’re very excited to have this hotel finally under construction. We see it as a gateway project to Lebanon at the Exit 18 intersection which continues to be one of the busiest in the region,” he said.
Upper Valley businesses are excited about the new Hilton, but for a different reason: They hope it will pressure the other hotels to hold down room rates, which they say tend to run high as operators have taken advantage of a historically tight market.
The addition of the 100-room Hilton will bring the number of hotels all within a couple miles of each other to five and increase the total number of rooms to 508, representing a 43 percent increase in capacity from two years ago.
Initially green-lighted in January 2011, the $12.3 million project had been put on hold until the city completed replacing sewer lines on Route 120 and installing water line extensions required to serve the planned structure.
But over the six years of the project’s gestation significant changes have occurred in the Upper Valley’s hotel market, forcing the developers to adapt their plans.
“Originally, we were going to build a Hilton Homewood Suites, which is an extended-stay hotel,” Campion said in an interview. “But then we switched to the Hilton Garden Inn concept after there was an additional extended-stay hotel in the works. The more conventional design of the Garden Inn lent itself better to what the market needed.”
The extended-stay hotel Campion was referring to is the Element Hotel, also on Route 120, which David Leatherwood’s Lebanon-based hotel company, Norwich Partners, opened in 2014 with 120 rooms.
In addition, in 2015, Norwich Partners teamed up with True North Group, (the two also own the Courtyard by Marriott at Centerra Park), to reacquire the 114-suite Residence Inn that they had previously owned and embarked on extensive multimillion-dollar renovations.
Instead, Campion and his partners, Mark Schleicher and Mark Stebbins of XSS Hotels, hope the drawing card for the Hilton Garden Inn will be its 300-seat capacity conference center equipped with the latest technology targeted to the business needs of the likes of Dartmouth-Hitchcock, Hypertherm and the hub of tech startups at Centerra Park.
“The need for convenient, modern conference space is going to be what drives this,” Campion said.
But in this, too, the Hilton Garden will face competition it didn’t have when originally on the drawing boards.
The 108-room Hanover Inn completed a $41 million renovation in 2012 that included expanding its meeting and event space to 11,000 square feet. The Hanover Inn has been the default conference venue not only for Dartmouth College but for the college’s Geisel School of Medicine, Tuck School of Business and Thayer School of Engineering as well.
In addition, there are there other meeting and conference facilities at West Lebanon’s Fireside Inn and Suites, the Wilder Center in Wilder, and the Woodstock Inn in Woodstock.
XSS Hotel’s Tormey said “our market study shows there is still a significant demand even with the construction of another hotel. And there’s no other modern conference center except Hanover Inn.”
Two of Lebanon’s largest employers, DHMC and Hypertherm, are each important generators of hotel stays in Lebanon and Hanover. DHMC has booked 585 room nights so far this year, while Hypertherm booked 330 room nights this year through August and 500 nights for all of last year, according to representatives for each organization.
But in each case those figures underreport total figures because they do not reflect reservations made by guests who booked rooms themselves.
During the early stages of the permitting process, Campion received letters of support for the project from both DHMC and Hypertherm when he was seeking a zoning variance because the site is classified as “light industrial” under the town’s zoning ordinances.
Michelle Avila, a spokeswoman for Hypertherm, said in an email that the company backed the Hilton project “because of their proximity to our existing buildings on Great Hollow, Etna, Mt. Support, and Heater roads. From our perspective, this additional capacity would be a good thing as it would create increased competition, greater availability, and ultimately lower prices.”
The Hilton Garden Inn also will include a 60-seat restaurant and employ a total of 45 people, according to site plans on file at the Lebanon Planning and Zoning Department.
Scott Milne, president of Milne Travel American Express, a regional travel agency, said hotel rates in Lebanon and Hanover have risen faster than the national average because of the traditionally tight market owing to a paucity of available rooms.
“We’re finding over the last four years price increases have gone up more than the national average and we’re still seeing that many times of the year,” he said, especially around graduation and homecoming at Dartmouth and during the fall foliage leaf-peeping season. “My sense is they’ve done a pretty good job at analyzing the market.”
And he’s hoping for an upside as a result of the expanded capacity.
“Hopefully it will take some of the pressure off the price increases,” he said.
John Lippman can be reached at 603-727-3219 or jlippman@vnews.com.
