March 15–Pittsburgh’s choked hotel market is getting some room to breathe.

More than a dozen hotels are either under construction or will open this year in the city — a $168 million investment by developers who are attracted by the market’s near 70 percent occupancy rate. The modest boom will add more than 800 rooms to the 4,570 available in Downtown hotels.

The increase will help to alleviate some of the problems visitors may have finding rooms during key events, such as Pittsburgh Pirates games, but the city still lacks an important element for major conventions: a 1,000-room hotel at the David L. Lawrence Convention Center.

“That’s what professional meeting personnel tell us,” said Craig Davis, president and CEO of VisitPittburgh. “That is one reason we fail to attract larger conventions.”

The 618-room Westin Convention Center Hotel is the sole major facility directly connected to the convention center. The problems posed by the shortage of rooms Downtown was underscored by the G-20 summit in 2011 when visitors had to travel to hotels in the suburbs to find a place to stay.

“While existing hotels Downtown don’t like the addition of new hotels, since they tend to take away some hotel guests, as president of the hotel association, I welcome all the new hotels opening in the region,” said Tim Zugger, president of the Greater Pittsburgh Hotel Association and general manager of the Doubletree by Hilton hotel, Downtown.

The four hotels opening Downtown are doing it at a good time. Davis said 2015 is shaping up to be the best year ever for conventions, with room bookings 54,000 more than normal. Davis wouldn’t say how many total rooms have been booked for 2015 but he said they include events by the Fraternal Order of Police with 19,000 rooms and the Barbershop Harmony Society with 15,000 rooms.

Developers invested $167.9 million in new or renovated hotels last year, up from $76.9 million in 2012, according to Breaking Ground magazine, published by Jeff Burd of Tall Timber Group in Ross. Some of the money is coming from out-of-state developers. They are attracted by the market’s stability and relatively high occupancy rate, says a report by HVS Global Hospitality Services Inc.

“I don’t believe out-of-state developers were significant owners of Pittsburgh hotels prior to the last several years,” said Keith McGraw of Sierra Associates in Sewickley, a partner with Mark LaPort in Concord Hospitality Enterprises Co. in Raleigh.

Concord, which has developed 15 hotels here, is building a Hyatt House in Bloomfield, a Hilton Homewood Suites in the Strip District with co-developer Walnut Capital, and a Hampton Inn & Suites next to its Courtyard by Marriott at Settlers Ridge in Robinson.

By the end of 2013, Western Pennsylvania had 24,355 hotel rooms, a 10.2 percent increase since the pre-recession inventory at the end of 2007, according to a count by Smith Travel Resources of Hendersonville, Tenn., which tracks hotel operations.

Lenders are interested in financing hotel construction with low interest rates, a developer’s dream, McGraw said. But the region could reach a saturation point, he said. Having too many rooms will soften the market.

Some investors see Pittsburgh’s high occupancy rate as reason to build, an indicator that the area lacks sufficient hotel rooms.

Mike Depatie, CEO of Kimpton Hospitality in Seattle, decided Pittsburgh was a logical choice for expansion because it lacks boutique-style properties — smaller hotels with luxury offerings in unique settings. Kimpton plans to open its Hotel Monaco, Downtown, this year.

“With many Fortune 500 companies, universities and a thriving technology sector, Pittsburgh deserves a great boutique hotel,” Depatie said. “We think visitors and locals will appreciate the warm and playful approach to hospitality Kimpton brings.”

The Hotel Monaco and another newcomer, a Drury Inn & Suites by St. Louis-based Drury Hotels Inc., are among four scheduled to open Downtown by 2016. The others are a Hilton Garden Inn, part of Washington County-based Piatt Investments’ $104 million Gardens at Market Square development, and an Embassy Suites in the upper floors of the Oliver Building.

Drury’s marketing director, Carolyn Feltner, said an analysis of Pittsburgh’s market took into account new rooms that would be coming, and “we believe that we would be able to perform quite well.”

Some hotels are simply changing hands.

Robert O’Neill, CEO of American Hotel Income Properties of Vancouver acquired four: the Hampton Inn Airport in Moon, the Hampton Inn Green Tree, the Hampton Inn Cranberry and the Residence Inn in Cranberry.

“We surveyed the Pittsburgh market and determined it was underserved. That led to our decision to buy here,” O’Neill said.

More recently, Washington-based Capetown Hospitality acquired the Marriott Springfield Suites at Bakery Square in the city’s East End.

Davis, with VisitPittsburgh, isn’t surprised that developers and investors are putting money into Pittsburgh.

“(They) realize either we have a shortage of hotel rooms, or that we are attracting increased number of visitors to the city, for a variety of reasons,” he said.

Conventions, corporate meetings, business trips, sports events and vacations kept Pittsburgh’s hotel occupancy at an average 67.2 percent from January through September last year, and September’s occupancy rose to 74.4 percent, up 3.3 percent over the same month the prior year, said Bobby Bowers, senior vice president of operations for STR in Nashville, which tracks supply and demand data for the hotel industry and provides market share analysis for chains and independent hotels.

Davis said the Hotel Monaco by Kimpton could be “very helpful” to convention planners because its location is only a few blocks from the convention center.

“There is a belief that adding hotel rooms in a vibrant Downtown, such as what we have, will affect suburban hotels to the extent they will have less occupancy,” Davis said. “But what we find happening here is that because of the many companies involved in the Marcellus shale, visitors to those companies tend to book rooms in hotels closer to their operations, not Downtown.”

Hotels are being developed outside Pittsburgh’s Golden Triangle, including an Indigo Hotel and an Ace Hotel in East Liberty; a Hyatt Place at the Meadows Racetrack & Casino in North Strabane; a Hampton Inn and Suites in Harmar and a Hampton Inn in Butler County; and a Hilton Garden Inn in Robinson.

Sam Spatter is a Trib Total Media staff writer. Reach him at 412-320-7843 or sspatter@tribweb.com.