NAPA — After 18 months of construction — and after weathering one of the toughest economic recessions in memory — The Meritage Resort and Spa officially opened a newly built, $40 million expansion that essentially doubles the size of the existing hotel, which it hopes will help boost tourism spending not just at the hotel but throughout the surrounding area.
The completion of the expansion marks the end of more than five years of planning and construction. Plans to construct the adjacent expansion were halted in 2008 amid the economic crash that had a crippling effect on the hospitality industry. And the hotel is opening its expanded wing on time, despite delayed construction in October 2010 from one of the wettest winters in years.
“After 18 months of construction, we’re about to embark on an incredible journey,” said Michael Palmer, general manager of the hotel and spa, which is owned by Pacific Hospitality Group.
The expansion added 165 rooms to the already existing 154 rooms, bringing the total to 319. The new three-story wing will also bring the total amount of meeting space across the resort to over 50,000 square feet, and includes numerous amenities that the hotel hopes will help it stand out as a destination unto itself.
Among them are: the Crush Ultra Lounge, which features a six-lane bowling alley and a pool table; the Bacchus Suite, a two-level, 1,280 square-foot room with a full bar and four flat-screen TVs; and the Carneros Ballroom, which totals 7,300 square-feet for meeting and event space (divisible by 10 meeting rooms). That’s in addition to the Estate Cave, which opened in 2007 as a 22,000-square-foot space that includes event space for up to 200 people, the Trinitas Cellars and the full-service Spa Terra.
All told, the expansion adds 131,300 square feet to the property at 875 Bordeaux Way in Southern Napa. Tourism representatives and The Meritage expect the significant investment to reverberate throughout the immediate area and perhaps throughout the Napa Valley.
“The Meritage’s bullishness on the Napa Valley is a very good signal all around, as was the selling price of the Marriott last year — virtually double what it sold for in 2009 — and certainly can’t hurt the enthusiasm of other hoteliers,” said Clay Gregory, chief executive officer of the Napa Valley Destination Council.
County tax revenue and a countywide tourism improvement district are expected to improve as well, Mr. Palmer said. He estimated that in 2011, the resort contributed about $800,000 in transient occupancy taxes and another $135,000 in TID funds. The TID is a two percent assessment that goes toward tourism promotion, with a portion going to the county and some remaining in each city. In 2012, Mr. Palmer projected the resort would pay $1.3 million in TOT and about $215,000 in TID funds. And in 2013, based on current performance, that total is expected to rise to $1.7 million for TOT and about $300,000 for TID funds.
“So you can see, in two years, we’re going to double the amount of TOT revenue and more than double the tourism assessment,” Mr. Palmer said. “This is just huge for the city, the county, the Napa Valley.” He added that the ancillary businesses — transportation companies, balloon operators, wineries, restaurants, etc. — will also benefit.
The Meritage was also the first large hotel in the Napa Valley — perhaps in the state — to undertake the significant expansion following the recession, all with private funding. The hotel industry was hit especially hard, as Americans largely stopped traveling to high-end resorts during the recession. But recently, the Napa Valley has seen a number of hotel-construction projects get off the ground, a sign of a rebounding tourism market, officials have said.
In Napa and the surrounding area, there are 1,100 hotel rooms planned. Currently, there are 5,232 hotel rooms in the county — a 42 percent increase since 2002.
Mr. Gregory said that, overall, the industry continues to post strong growth.
“In general, our lodging industry is quite healthy with meaningful continuing gains in occupancy, daily rate and overall revenue,” he said. “The highest end luxury properties have not experienced as swift a recovery as the rest of the market, but that seems to be the case in other regions as well.”
Mr. Palmer said the response on the expanded property has been positive. “The feedback we’re getting from our guests is, ‘Wow,’” he said.
With the increased square footage of meeting space, Mr. Palmer said the hotel plans on attracting large trade shows as well as large groups. The largest room will still be in the original hotel, at over 10,000 square feet.
The hotel also held eight job fairs to hire more than 100 new staff.
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