Hotels Proliferate in Hot Springs

Clockwise from left: The Waters, Dame Fortune's Cottage Court, and the Hale Bathhouse.

The Hot Springs hotel market has been steaming along for the last few years, and the city’s convention and visitors bureau, Visit Hot Springs, expects that to continue as newcomers are drawn in by a revitalized downtown and thriving tourist attractions.

Four hotels and a motel have opened in Hot Springs in the last three years, and at least two hotels are to open next year. Revenue from the city’s 3 percent tax on lodging has grown, sometimes by as much as 9 percent, every year since 2010.

“There’s a lot of hotel interest in Hot Springs right now. Things are going in the right direction. We’re excited about it, the new energized downtown,” Visit Hot Springs CEO Steve Arrison told Arkansas Business. “A lot of good things are going on in the tourism industry here, and the future looks very bright.”

Right now, there are 3,108 hotel and motel rooms in the Hot Springs city limits, and its Advertising & Promotion Commission collected $5.98 million in hospitality tax last year, up 28 percent since 2010. There were more rooms then — 3,362 in fact — indicating higher occupancy and/or higher room rates.

Arrison said the tax is not collected on the hotels and rental condos along the nearby lakes because those are outside the city limits. About 200 hotel and motel rooms are just outside the city.

He also said the hotel market has been growing since the city created the Thermal Basin Fire District downtown after a blaze destroyed the historic Majestic Hotel three years ago. The district imposed stricter rules that forced owners to either upgrade their properties or sell them, making more space available downtown, Arrison said

He believes the revitalized downtown, along with Hot Springs’ other tourist draws, spurred the influx of hotels. The city’s attractions include Oaklawn Racing & Gaming, Magic Springs & Crystal Falls amusement and water park, restaurants, retail shops, baths, Hot Springs National park and Garvan Woodland Gardens. “I think people are excited about the future that they can predict for Hot Springs, and they’re betting on that future,” Arrison said.

But he said he didn’t know whether the city’s supply of hotel and motel rooms fits the demand, or how competitive the market is. Arrison said properties that have been taken care of are doing well, but “I’m not in that business … That’s for the lenders in the banks to decide, I guess … It must look good or they wouldn’t be building [here].”

For Every Taste
Arrison also said Hot Springs has attracted a variety of hotels, from small boutique properties to full- and limited-service ventures.

The Waters, a boutique hotel, opened in February at 314 Central Ave., and plans for transforming the Hale Bathhouse at 329 Central Ave. into another boutique hotel are expected to come to fruition next year.

Mayor Pat McCabe and his wife, Ellen, are investing more than $1 million in that venture, to be called the Hotel Hale. It will have seven rooms, two suites and a restaurant called Zest.

The Waters is in what was known as the Thompson Building, built in 1913. It was bought in 2014 for $1.25 million by Bob Kempkes and Anthony Taylor, founders of Taylor/Kempkes Architects of Hot Springs, and Robert Zunick, a local financial adviser. The total cost of the project was about $7 million.

The Waters has 62 rooms and a restaurant called The Avenue. The manager of the hotel did not return a call seeking comment.

Another property that opened in Hot Springs recently is Dame Fortune’s Cottage Court at 609 Park Ave. It’s in the uptown area of Hot Springs, near Deluca’s Pizzeria Napoletana and the Red Light Roastery coffee house.

Owner Andi Roberts said she bought the 12-room motor court-style motel in May 2016 and spent a year renovating it. She said her initial investment was $300,000, but she declined to provide any other financial details. She said it had been fully booked every week except one since opening in July.

The place had been vacant for 10 years, she said, but the motel’s Facebook page declares that “modern luxuries and vintage-inspired design merge with mid-century roadside motor court cool.”

Roberts said the interiors of the buildings were torn out and redone, but the court’s footprint was kept and its facades were restored. “We really wanted to maintain the feel and not go in and make it so new that it lost all its character,” Roberts said.

She also purchased the Bellaire Apartments this summer and will redevelop that former motor court into another motel or into a mixed-use property. She has not finalized her plans.

Roberts, who splits her time between Hot Springs and Nashville, Tennessee, said she and her two sisters are investing in Hot Springs because they remember going there on family trips growing up and know the draw it holds for tourists. The revamped downtown area was an attraction, she said, not to mention its location between her home in Tennessee and her sisters’ homes in Texas.

Another recent, but much larger, addition to the Hot Springs hotel market is the Hotel Hot Springs & Spa, formerly known as the Austin Hotel, at 305 Malvern Ave.

It underwent a $10 million renovation in 2015 and reopened in 2016 with 200 rooms.

Hotel Hot Springs is the third-largest hotel in the city, trailing only the Arlington Resort Hotel & Spa (478 rooms) and Embassy Suites Hot Springs Hotel & Spa (246 rooms).

Its manager also didn’t return a call from Arkansas Business.

Two other hotels that recently opened south of Highway 270 are the Courtyard by Marriott-Hot Springs at 200 Marriott Court (98 rooms) and the Holiday Inn Express & Suites-Hot Springs (94 rooms) at 206 Mehta Court. They opened in 2015 and 2014, respectively. Both are located off Central Avenue.

Soon, the community will welcome another similar property near Lake Hamilton Island Marina, off Highway 7. A $10.5 million Home2 Suites by Hilton is set to open in the first quarter of 2018 at 106 Catalina Drive. It will have 91 rooms, according to Ebrahim Valliani, leasing agent with Marcus & Millichap’s National Hospitality Group of Calabasas, California.

Hot Springs Hospitality Tax Collections
Monthly receipts on 3 percent tax on lodging rounded to the nearest dollar

Source: Hot Springs Advertising & Promotion Commission