Meritage expansion helps boost Napa Valley tourism

JQUACKENBUSH

July 30, 2012

Project details

Location: 875 Bordeaux Way, Napa, TheMeritageResort.com

Owner: Pacific Hospitality Group LLC, Irvine

Description: 131,300-square-foot, two-building expansion of a 158-room hotel, resort and convention center

General contractor: Midstate Construction, Petaluma; Tom Stallings, superintendent; Dana Vallimont, project manager; Ben Honsvick, project engineer

Architecture: structure -- PK Architects, Tempe, Ariz.; landscape -- Gretchen Stranzl McCann, Napa

Engineering: civil -- Riechers Spence & Associates, Napa; electrical -- DC Engineering, Meridian, Idaho; mechanical/plumbing -- NP Mechanical, Phoenix

Subcontractors: electrical -- Capitol Valley Electric, Sacramento; mechanical -- Simpson Mechanical, Santa Rosa; plumbing -- RCI Plumbing, Rio Linda; framing -- Ellison Framing, Brentwood; tile, flooring, showers and embellishments -- Dennett Tile & Stone, Santa Rosa; drywall -- Maudlin Drywall, Santa Rosa

Bowling alleys: All American Bowling Equipment Co., Moon Township, Penn.

Start of construction: October 2010

Completion: April 2012

Cost: $40 million

NAPA -- The scale of the recently opened $40 million expansion at The Meritage Resort & Spa -- effectively doubling the size of it -- already is contributing significantly to the ongoing resurgence of Napa Valley tourism.

In May, the number of rooms increased by 165 to 319 with a new three-story lodging building. That's not including the affiliated 182-unit Vino Bello vacation housing complex across the parking lot. Meeting space expanded to 50,000 square feet with the new 7,300-square-foot Carneros Ballroom, divisible into 10 "salons" just as the 10,500-square-foot Meritage Ballroom in the existing hotel building is.

Also added were the Crush Ultra Lounge with six bowling lanes, 1,600-square-foot fitness room, Blend cafe and bistro, and outdoor meeting areas, croquet lawn and fireplace between the new buildings. The existing pool area also got a $500,000 upgrade, including a firepit and eight permanent cabanas.

The additional rooms and amenities are boosting group bookings by attracting functions the resort couldn't before, namely companies or organizations wanting to reward star employees or customers, according to General Manager Michael Palmer. Attractions at the resort predating expansion have been the Siena fine dining restaurant, Spa Terra and Trinitas Cellars tasting room in a 22,000-square-foot cave bored under the landmark Grapecrusher statue overlooking the area.

"We were fortunate to do a lot of site tours before we opened, and that has allowed us to put a lot more heads in beds Sunday through Thursday with group bookings," Mr. Palmer said. Such reservations help keep hotel occupancy up between waves of tourists making weekend trips to Wine Country.

[caption id="attachment_58575" align="alignleft" width="320" caption="Spa Terra and Trinitas tasting room are nestled into a 22,000-square-foot cave bored underneath the estate vineyard surrounding the hotel and landmark Grape Crusher statue atop the knoll."][/caption]

In 2011, groups accounted for about 17,000 room nights at The Meritage, according to Mr. Palmer. The group total is on track to reach roughly 30,000 nights this year then expand to 40,000 nights in 2013.

The resort expansion is allowing existing group bookings to expand and get back ones that had taken their events out of Napa Valley, according to Mr. Palmer.

For example, a group that had reserved all the rooms in the resort in past years, instead moved the event to larger venues in San Francisco as of 2011. With The Meritage expansion, the group will be back, signing a multiyear contract to reserve the entire property, according to Mr. Palmer.

"That was the reason we added additional conference rooms and meeting space, because groups were outgrowing us," he said.

[caption id="attachment_58576" align="alignright" width="360" caption="In conjunction with the addition, the pool area, seen here from the resort's estate vineyard, received a $500,000 enhancement, including a firepit and eight permanent cabanas. The upstairs living room of the Bacchus Suite overlooks an outdoor firepit sitting area, water-free turf and the new conference center."][/caption]

In another example, a Silicon Valley group is doubling its bookings at The Meritage from reservations in 2012. In January, the group has reserved for four days all 319 rooms in the hotel and all 182 condos in Vino Bello.

That additional space and added guest rooms also are attracting association meetings from out-of-state locales such as Washington, D.C., and the Midwest, according to Mr. Palmer.

With more reservations, the resort has been expanding its resources to connect guests with other Napa Valley attractions.

"It's not just about The Meritage," Mr. Palmer said. "The entire valley is benefiting from the added guest and conference facility. We buy a lot locally, and every vendor we're buying from -- linens, food, beverages and wineries -- we're buying twice as much."

[caption id="attachment_58577" align="alignleft" width="360" caption="Top: To keep up with guest demand downtown Napa shopping and dining, the resort added a 28-passenger van that leaves every 40 minutes for six evening hours. Bottom left: Firepit area. Bottom Right: Crush Ultra Lounge has six bowling lanes, pool and shuffleboard tables, sports bar and fireplace."][/caption]

The three-person concierge team in The Meritage lobby is being doubled to have that many on hand during the busiest times. To shorten the wait times in shuttling guests to downtown Napa restaurants, shops and tasting rooms about every 40 minutes between 4 and 10 p.m., the resort recently expanded the service from an eight-passenger van to a 24-passenger vehicle.

However, that van isn't big enough to ferry increasing larger groups to wineries and other local destinations, so the added group business is spilling over into area transportation and events companies. Resort staff cater some off-site events too.

The resort expansion is forecast to increase its county transient occupancy tax to $1.3 million this year and $1.7 million in 2013 from $800,000 last year. The 2 percent Napa County Tourism Improvement District assessment is projected to rise to $215,000 this year and $300,000 in 2013 from $135,000 last year.

The Meritage expansion together with recent major renovations at local hotels such as Napa Valley Marriott, Embassy Suites Napa Valley and Meadowood are contributing to growth in tourism, according to Clay Gregory, president and chief executive officer of Napa Valley Destination Council. The valley has 2,300 hotel rooms, and 1,100 more are planned. [See "Napa hotel projects a sign of expanding tourism sector," Feb. 13.]

"Overall, tourism is doing very well in Napa Valley," Mr. Gregory said, pointing to the latest year-over-year lodging statistics from Smith Travel.

In June, total room revenue increased 14 percent to $26 million from a year before, and first-half receipts increased 9.5 percent to $106 million. The average daily room rate increased nearly 2 percent to $248, and revenue per available room (revPAR) increased nearly 10 percent to $186. Average occupancy increased about 8 percent to 75.2 percent in June.

Average occupancy has initially dipped with the opening of The Meritage expansion. However, promotion by resort owner Pacific Hospitality Group over the 18-month expansion project, opening of a number of restaurants and tasting rooms in downtown Napa and the two years of marketing funds provided by the Napa Valley TID are credited with helping to spur tourism growth.

The Meritage first opened in 2006, followed by the opening of the subterranean spa a year later. The second phase was planned to quickly follow the first, but the global financial crisis stalled the expansion until 2010, when tourism noticeably started picking up in the North Coast.