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More business coverage of the North Bay fires: nbbj.news/2017fires

After more than two chaotic weeks of lodging evacuees and firefighters, hotels in Napa and Sonoma counties are edging toward business as usual. Hotel construction projects that have been delayed are also getting back on track again.

Shortly after fires began, evacuees flooded into North Bay hotels, which also provided lodging for firefighters.

Steve Jung, general manager of DoubleTree by Hilton Hotel Sonoma Wine Country in Rohnert Park, has spoken with managers of other hotels in the area, many affected by the fires.

“Hotels have a similar story,” he said of the rush for crisis housing. Donations poured in to help with lodging and other needs, but some evacuees paid for their own rooms.

The Red Cross set up in the banquet rooms at the DoubleTree. The hotel took in $500,000 in donations and was turned into a one-stop place for fire victims to obtain clothing, water, toiletries and even chair massages.

Downtown Napa was not in the path of the fires. At Napa River Inn on Main Street, most evacuees stayed for free, said Sara Brooks, general manager.

The inn typically runs at 90 percent occupancy in October, and although there will be short-term losses, Brooks is confident November and December will be fine as tourists return.

“There were definitely cancellations due to air quality and uncertainty,” she said. “In Napa, small, independent hotels have a real connection with their guests. People were calling just to ask if everyone is OK.”

Also in downtown Napa, the much-anticipated 183-room Archer Hotel was set to open in mid-October after delays due to heavy rains last winter. The opening has now been pushed back to December.

“Final building inspections by local and state authorities have been postponed, understandably, so that those critical resources can direct their attention to the priorities at hand — and to protect the health and safety of all those involved,” a company spokesperson said.

North of Napa, the town of Calistoga was evacuated for five days, which caused delays in construction of a 90-room hotel and resort managed by the Four Seasons. Another 110-room resort on the other side of town, managed by Rosewood Hotel Group, is slated to open in 2018.

3,450 NEW ROOMS

More than a dozen hotel projects are in various stages of development in Napa County that could bring at least 1,700 new hotel rooms to the county in the next few years, according to city planners.

That’s on top of 5,146 rooms at 131 existing properties, according to Visit Napa Valley, which promotes the county’s tourism.

In Sonoma County, there are 30 lodging-property applications at various stages in the approval process. When completed, those projects could add 1,750 rooms to the existing inventory of about 6,600 rooms, according to city planners.

Lodging projects have been adding retail and restaurant options to give visitors more things to do, more to buy and reasons to stay longer.

The roughly $200 million, 325,000-square-foot First Street Napa project, which includes the Archer, will encompass 45 shops and restaurants, and 30,000 square feet of office space.

“We have three blocks of mixed-use including 110,000 square feet of retail, which is pretty huge by Napa standards. We’re trying to create more of a reason to come for the day. Grab lunch, go shopping, have a little wine and be home for dinner,” said Todd Zapolski, managing member of Zapolski Real Estate, which owns the property.

More business coverage of the North Bay fires: nbbj.news/2017fires

Visitors indicated that they wanted more shopping opportunities in responses to a survey by Visit Napa Valley, which conducts surveys of tourists.

Owners of Napa Valley Wine Train are delving into the hotel market and have submitted plans to the city for a 5-story, 148-room European-style resort near the 40,000-square-foot Oxbow Marketplace downtown.

Like the Archer, the project includes retail space.

“We saw the popularity of the nearby Oxbow Marketplace,” said Scott Goldie, a partner of Brooks Street, a California-based real estate development and investment company that owns the train along with Noble House Hotels & Resorts.

The wine train itself is already a destination, with 100,000 visitors per year, Goldie said.

“We’re in the right place at the right time. Napa has had such a renaissance, we’re happy to be a part of downtown,” he said.

NAPA TOURISM CLIMBS

The number of visitors to Napa Valley has grown each year.

In 2016, 3.5 million people came to play in Napa Valley, an increase of 6.3 percent from 2014.

The majority of visitors, 65 percent, were day-trippers. Overnight visitors spent much more money than those who came just for a day.

Overnight hotel guests in 2016 spent about $400 per person per day compared to about $150 per person per day spent by tourists who visit for the day.

The average daily room rate in Napa County has grown steadily. As of June, the average rate was $293 per room, up 4.3 percent from a year ago, according to STR, a tourism-data-research firm.

The highest rate tops out at $439 in Yountville, where that town’s yearly collection of transient-occupancy taxes accounts for most of its operating budget.

That compares to an average rate of $152 in Sonoma County and $174 in Marin County.

Revenue from hotel stays in Napa totaled $425 million in 2016, up from $375 million in 2014.

While rates and revenue climb steadily, hotel occupancy rates in Napa Valley are holding steady for now. The average rate was 78.9 percent in June, up 1 percent from a year ago.

“Napa is a market that seems to have a lot of depth. The question is, will it last?” Zapolski said.

In an effort to make it last, Visit Napa Valley is focusing its marketing on overseas travelers.

Over the past year, Napa Valley saw an increase of 20 percent in international visitors, with visitors from China accounting for 5 percent of travelers.

“In the international market, the Napa (brand) is something they connect with. It resonates with people all over the world as a place they want to go,” Zapolski said.

Goldie said Brooks Street works closely with Visit Napa Valley, and one of the company’s executives is on the board. He has also noticed an increase in Chinese visitors on Wine Train tours.

“We have Mandarin-speaking staff and intend to hire more,” he said.

Goldie is optimistic that his hotel project will be a draw to those who visit Napa in the wake of the fires.

“We feel there’s a need for an elevated hospitality experience in downtown Napa. Ours will be unique, with a Wine Train station in the center of town,” he said.

“There are only a couple other train-station hotels in the country,” he said.

NAPA PROJECTS ON HORIZON

A four-story 90-room Cambria hotel at 320 Soscol Ave., a main thoroughfare into downtown Napa from Silverado Trail, is expected to open in 2019.

Silverado Trail, located along the eastern edge of Napa Valley, was closed during much of the fire disaster. Stags’ Leap Wine Cellars on Silverado Trail suffered damage to some of its structures, but the main buildings survived intact.

The Meritage Resort and Spa, located in southern Napa County, will add The Commons, a new facility slated to open in summer 2018. The Commons will feature 145 guest rooms, including 39 suites, an outdoor pool area, and a food-and-wine village.

Across the street from Meritage Resort and Spa, Marriott also has big plans in the area, with a 253-room Marriott-branded hotel and two-story office building next to Trinitas Cellars winery. That project is expected by 2020.

Despite the 1,700 or so new rooms planned for the Napa region, not every project approved by the city will necessarily go forward. Obtaining financing or an operator can present obstacles.

“Things happen and certain things get delayed,” said Rick Tooker, Napa’s community development director.

“The actual number of projects is hard to pin down. Not every project that’s approved gets built.”

Cynthia Sweeney covers health care, hospitality, residential real estate, education, employment and business insurance. Reach her at Cynthia.Sweeney@busjrnl.com