Two firms from outside Texas have purchased the Wyndham San Antonio River Walk hotel with plans to spend $50 million to turn it into a luxury InterContinental Hotel in early 2023.
A joint venture between Scarlett Hotel Group, which has offices in Chicago and Nashville, and Denver-based private equity firm Trailbreak Partners closed down the hotel last week after buying it for $19 million, said Andrew Scarlett, the group’s principal and co-founder. He said he believes that San Antonio’s tourism and convention industries will come back strong now that a large portion of the U.S. population has been vaccinated against Covid-19.
“Based on the history that we’ve seen in San Antonio and the market in general, nothing points to bad things on the horizon,” Scarlett said. “We think that a market like San Antonio, as strong as it was before, is going to be equally strong if not stronger once conventions start coming back full-swing.”
The firms plan to refurbish the hotel’s 390 guest rooms and 40,000 square feet of meeting space, and to create space for several food and beverage outlets on the ground floor, as well as a bar and restaurant around the rooftop pool overlooking the River Walk, he said. The details of the renovation are still being determined, he said.
The 21-story hotel, 111 E. Pecan St., will be the first location in San Antonio for InterContinental Hotels & Resorts, which operates 32 hotels in North America, including ones in Dallas and Houston, according to its website.
It is directly south of the planned site of the $400 million Riverplace development, which is expected to feature a 21-story Dream Hotel and a 20-story multifamily building. The hotel is also across the street from the Weston Centre, and about a block away from where Weston Urban plans to build a 32-story apartment tower. On the other side of the river, a short distance to the south, California developer Harris Bay plans to build the eight-story Artista Hotel.
Scarlett said he expects the hotel’s clientele to be a mixture of tourists, business travelers and convention-goers.
“From a location standpoint, you can’t beat this,” he said. “Clearly, we’re not the only ones who see a lot of upside to this area of the River Walk.”
The hotel’s previous owner was Cypress Real Estate Advisors of Austin, which had owned it since 2013, property records show. It was constructed in 1958 as an office building.
Recent data from STR, a research firm, shows that San Antonio’s hospitality industry has come a long way in recovering from the devastation wrought last year by the Covid-19 pandemic. The occupancy rate for the local market was 63.4% during the week ending May 29, only slightly less than the rate of 64.1% during that time in 2019 and up from 35.7% at that time in 2020, according to the data.
The recovery for downtown hotels has not been as strong, however. The occupancy rate for hotels in the central business district was 54.5 percent in the week ending May 29, according to STR’s data, down from 68.7 percent at that time in 2019.
Other investors have shown confidence in the sector’s recovery. Last fall, New England investment firm Wheelock Street Capital bought the Hotel Contessa on the River Walk. In March, the San Antonio Express-News reported that a group of investors plans to spend $5 million to transform a Best Western in the St. Paul Square neighborhood east of downtown into a boutique Aiden Hotel.
“San Antonio continues to be a leading city for conferences,” said Jordan Scharg, principal at Trailbreak Partners, in a statement. “Meeting and conference planners looking at convention locations for 2023 and beyond will have a brand new, high-end lodging option in San Antonio right on the River Walk.”
Richard Webner is a freelance journalist covering Austin and San Antonio, and a former San Antonio Express-News business reporter. Follow him at @RWebner on Twitter
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