This story has been updated.
Work to turn the shuttered Wyndham hotel tower downtown into an InterContinental Hotel brand property in San Antonio is underway.
Owners IHG Hotels & Resorts and Scarlett Hotel Group recently announced the start of a $158 million project to transform the building at 111 E. Pecan St. into a luxury hotel serving the city’s business and convention industry.
The 21-story hotel located along the San Antonio River Walk is next door to the Weston Centre office tower and about a block away from where Weston Urban is building a 32-story apartment tower.
Construction is expected to be completed in late 2024.
The hotel has been closed since 2021 when Scarlett Hotel Group acquired the building from Cypress Real Estate Advisors of Austin and announced plans for a $50 million overhaul.
Since then, Scarlett worked with Trailbreak Partners, a Denver-based real estate investment and development firm, to secure financing for a project that has grown in scope.
The hotel has about 400 rooms, a rooftop pool and direct access to the river taxi service.
Following renovations, the InterContinental San Antonio will include 40,000 square feet of meeting space, restaurants and bars and expanded rooftop amenities.
Co-working spaces are being designed to become private dining spaces at night. “Smart” glass will be installed in meeting rooms to make it easier to control backlighting or daylight for events and presentations.
InterContinental Hotels & Resorts is a worldwide luxury hotel brand with 211 operating properties and 93 in the works, stated a release from the company. Matt Frankiewicz, senior vice president of development for the Americas division of IHG said the San Antonio property is an “exciting addition” to the brand’s portfolio.
“The energizing spirit of San Antonio coupled with the unrivaled experiences, inspiring design and personalized service for which InterContinental Hotels & Resorts is globally celebrated will undoubtedly create a memorable experience for visitors and locals alike,” he said.
The tower wasn’t always a hotel. Built in 1958 as an office building, it later opened as an Adam’s Mark hotel, then the Crowne Plaza San Antonio Riverwalk and later the Wyndham San Antonio Riverwalk.
Such building conversions have become a growing trend during the past couple of years, according to a 2022 report by the commercial real estate firm CBRE.
Turning office buildings into multifamily developments — as the Tower Life Building is set to become — and other uses gained traction last year as office vacancies increased due to hybrid work models.
CBRE found 218 office conversions completed in the U.S. from 2016 to 2021 with 42 conversions completed in 2022, another 21 set to be finished and 217 under construction or in planning stages.
Of those under development, half are being converted to life sciences labs while others are multifamily and mixed-use projects and 6% are destined to become hotels.
In San Antonio, tourism and convention business could be driving the post-pandemic rebound for the real estate industry.
Hotels are bouncing back from historic occupancy lows during the COVID-19 pandemic, according to data from the travel research firm STR. In May, occupancy levels hovered between 61% and 64%.
While the hospitality industry in other major Texas cities is rebounding faster, San Antonio is seeing some increase in demand, according to San Antonio-based hotel consultants Source Strategies.
Demand, as measured by room nights sold, surpassed pre-pandemic levels during the first months of the year, the company stated, with the San Antonio metropolitan area experiencing a 1.7% increase over the first quarter of 2019.
Statewide, demand was 11% higher in the first quarter of 2023 than in the same period in 2019.
Developers are rushing to supply the growing need for hotel space. In addition to several hotel renovation projects recently completed or in progress in downtown San Antonio, several brand-new hotels also are going up.
Data by the travel research firm STR published on the Hotel Investment Today website shows that, as of May 11, three hotels are under construction in San Antonio, 19 in planning and 22 in final planning, for a total of almost 5,000 new hotel rooms.
On South Alamo, the city’s first Kimpton Hotel, a $95 million project, is under construction and expected to be complete in late 2024, and the Marriott Plaza San Antonio next door is also getting a major upgrade.
A California real estate developer has plans for an eight-story hotel at 151 E. Travis St. just a block from the InterContinental Hotel.
Lodging makes up about 17% of the annual $16 billion economic impact of the hospitality industry in San Antonio, according to a report by Richard Butler and Mary Stefl of Trinity University for the San Antonio Hotel and Lodging Association.
The InterContinental is positioning itself as a hotel that caters especially to one segment of visitors to San Antonio — those here on business.
Of the 32 million business and leisure visitors to San Antonio during 2021, 3.3 million people were in the city for a convention or meeting, stated the report.
This story has been updated to remove a reference that the downtown hotel undergoing renovations would be San Antonio’s first InterContinental Hotel. The St. Anthony Inter-Continental San Antonio was once part of the Intercontinental Hotel Group.
