Knoxville and Knox County See Resurgence of Hotel Market

Knoxville and Knox County are seeing a resurgence of hotel property investment. The upswing began in July 2011 when the Hampton Inn and Suites opened in Turkey Creek. Two hotels have already opened this year, Embassy Suites on Parkside Drive and Holiday Inn Express on Papermill Drive, with two more scheduled to begin operation later this summer: Marriott Courtyard near Brookview Town Center and Hilton Garden Inn on Cumberland Avenue.

Historically, Knoxville and Knox County have added an average of 173 hotels rooms annually. The five properties above delivered 571 rooms to the market in two years?a 6.5 percent increase over the previous decade's trend.

"We've seen a steady increase in the number of hotels that cater to business travelers," said Dan Kelly, Manager of Development Services for MPC. "This type of hotel tends to locate near the interstate with easy access to restaurants. We've seen new ones near Turkey Creek, in the Cedar Bluff area, and at the Strawberry Plains interchange."

Not all recent activity in the hotel market has been new construction. The soon-to-open Hilton Garden Inn on Cumberland Avenue was a blighted and vacant hotel before the Paramount Hospitality Group undertook a major renovation and restored it to serve the University of Tennessee and downtown areas.

Anne Wallace, Cumberland Avenue Project Manager for the City of Knoxville, said the renovation will be a boon to that corridor. "It's a $17M investment. It's going to have tremendous, positive impact on both the revitalization project and the economic well-being of the entire area," she said.

The current pace of hotel building is expected to continue. Three projects are in the pipeline: a Marriott Residence Inn and the conversion of the former Henley Street State Office Building are both downtown investments. A third development will result in two hotels sharing the current Zuma Fun Center property on North Peters Road.

Posted 06-07-2013. Written by Sarah Powell.