Hotel development is booming in Portland ... but questions abound over how much is too much

BY Laurie Schreiber

Photo / Tim Greenway
Photo / Tim Greenway
Jim Brady, president and director of Fathom Cos., which is planning a hotel at 1 Center St. in Portland.

Convention wisdom

Portland’s lack of a convention center could be a constraint on the hotel sector’s growth.

"Portland has not really courted business travel, in part because it doesn’t have a venue for the largest groups, like a convention center," says Hospitality Maine President and CEO Steve Hewins. "There are hundreds of large business groups that would come here, but can’t."

Although hotel occupancy is far higher off-season than it once was, conventions could help fill midweek and off-season gaps, says Lynn Tillotson, president and CEO of Visit Portland.

A decade of growth of new hotels in Portland and southern Maine doesn’t seem to have an end in sight, thanks to a growing market of consumers attracted to the region both as a leisure and business destination.
Observers say they continue to see opportunity in new-hotel construction, even though growth in occupancy rates has slowed somewhat.
Portland Foreside Development Co. principal Casey Prentice, whose company is planning a West Elm brand hotel at 58 Fore St. in Portland, says he’s bullish on Portland’s hotel market and the average daily rate charged.
“Despite the recent development activity, we have seen occupancy hold and ADR continue to rise,” says Prentice. “We believe the Portland peninsula continues to experience an undersupply of rooms, specifically in the upper upscale and luxury market segments.”
Still, developers say they’re closely monitoring the market.
“Anybody in the hotel business is always worried about oversupply it the market,” says Jim Brady, president and director of Fathom Cos., which is planning a hotel at 1 Center St. in Portland. “That has been one of the biggest concerns people have expressed with the Portland market: When will we have built more supply than there is demand? I heard the same thing when we redeveloped the Press Hotel, that there was no way the market could absorb 110 rooms. I believe that’s proven to be wrong.”

Development activity in southern Maine took off over the past decade, says Steve Hewins, president and CEO of Hospitality Maine.
“It hasn’t always been this way,” says Hewins. “For Portland specifically, there were a number of years with nothing new built.”
In Greater Portland, a year-round market with one of the most expensive hotel markets in peak season, trade is increasingly busy, even through the winter, he says.
Strong demand is due to factors like year-round business traffic, tourism and Portland’s burgeoning attractions as a restaurant and brewery destination.
“Portland has become the new Cape Cod. People are coming here even during the winter,” Hewins says.
Not all visitors are driving, though. The Portland International Jetport reported a record of 2 million total passengers for 2018, compared to a post-recession low of 1,671,826 in 2012.
“For a city the size of Portland, that’s off the charts,” Hewins says. “If we didn’t have an airport of this caliber that would limit us beyond the drive market.”
Younger people comprise a growing segment.
“The millennial crowd comes to Portland with a checklist of places to go for food and drink,” says Hewins. “Food-and-beverage tourism is very real throughout Maine.”
The older crowd, he says, is extending seasonality in search of experiences beyond leaf-peeping.
“We feel the market will continue to be strong,” Hewins says.

Aiming to capture the strong market, a number of hotels are winding through the development pipeline.
The 1 Center St. hotel that Brady and his firm are developing is being designed by HKS Architects of Dallas, for a 23,000-square-foot site of what’s now a parking lot owned by North River IV. The vision is “a design-focused lifestyle hotel,” Brady says. “Design-focused,” he says, means having a style related to the local community, rather than standardized. A franchise with a national hotel has been approved but can’t be announced yet, he says.
“It’s important to us that we work with a franchise that’s willing to work with our design team to create something unique to Portland,” he says.
Pending approval, Brady says they’ll break ground later this year and open by spring 2021. The six-floor hotel will have 135 rooms. Brady says it would be the first in Portland to feature an indoor-outdoor rooftop bar.
Brady says Fathom also holds an option to develop a hotel on Saco Island in Saco. J&B Partners LLC, owned by Saco developer Bernie Saulnier, previously told Mainebiz he plans to develop 5.84 acres there for multi-use that includes a hotel. Plans are still being reviewed by the city.
The hotel at 58 Fore St. is expected to open in 2020. It will be part of a larger $250 million development, called Portland Foreside, at the former Portland Co. property. Plans for the hotel include 150 guest rooms, lobby bar and restaurant with indoor and outdoor seating and outdoor pool.
At Thompson’s Point, Forefront Partners’ Chris Thompson and Jed Troubh plan the 148-room Hotel Portland, part of the Tribute Portfolio by Marriott International. Construction is expected to start this year, with move in by 2020.
“It’s the first hotel you’ll see driving into town, and the first hotel you’ll see by just about any mode of transit coming into town,” says Thompson.
The design, with features like a speakeasy bar, will evoke a sense of place. Brick construction with granite banding will reference existing historic buildings on the point. The building will connect with the adjacent Brick South, a 34,000-square-foot events space. That will allow both to leverage business and events opportunities, Thompson says. The hotel will tie together overall Thompson Point activity for customers planning cultural and food-and-beer visits there. Future plans call for building a hotel dock to accommodate water taxis to the Old Port.
“We feel a hotel will benefit greatly from demand generation that’s already happening on the site,” he says. “If we were just hopping in to grab a piece of the pie without contributing to growing it, we’d be more watchful. But Thompson’s Point is about growing a destination. Even without a hotel, we feel that’s happened.”

  • Bateman Partners LLC is developing a Cambria Hotels hotel at the Shipyard Brewing Co. property at 25 Hancock St. in Portland. The beer-themed “brewtel,” with 105 rooms, is in the planning stage and is part of a 211,000-square foot redevelopment of the Shipyard property.
  • Another Marriott International brand, Aloft Hotel, will be part of the redevelopment of the former Rufus Deering Lumber Co. site, at 383 Commercial St. in Portland. Norwich Partners is the developer. The hotel will have 155 guest rooms, restaurants, meeting space, fitness center, 22 on-site parking spaces and valet parking.
  • A Hampton Inn, at 1210 Brighton Ave. in Portland, has 86 rooms and is expected to open this year. The developer is Portland Hotels Inc.
  • Norwich Partners also developed the AC Hotel, a Marriott International brand, at 158 Fore St. on Portland’s eastern waterfront. That hotel opened in July 2018. The 178-room hotel is a ‘lifestyle boutique’ brand aiming to capture the millennial market. It also targets businesses with 2,700 square feet of meeting space, and meeting rooms and parlors.
  • At 6 Thompson’s Point in Portland, Forefront Partners is planning the 148-room Hotel Portland, part of the Tribute Portfolio by Marriott International. Construction is expected to start this year, with a 2020 opening.
  • Fathom Cos. plans a six-floor hotel at 1 Center St. in Portland. It will feature an indoor-outdoor rooftop bar. The rendering shows the hotel as seen from Commercial Street.
  • Portland Foreside Development Co. is planning a West Elm brand hotel at 58 Fore St. in Portland, expected to open in 2020.
  • In Westbrook, select- and full-service hotels are planned as part of Needham, Mass.-based Waterstone Properties Group’s 100-acre mixed use development, called Rock Row, according to Waterstone’s website.
  • Home2 Suites, at 50 Maine Mall Road in South Portland, opened in July 2018. It’s owned by New Gen Hospitality Management of South Portland. The 111-suite hotel features energy-saving features like a cogeneration heat system.

There doesn’t yet seem to be any sign of saturation, as shown by strong and growing average daily rates, Hewins says.
“All the new capacity is being absorbed,” he says. “Eventually there has to be a tipping point. But I don’t believe we see that point yet.”
Brady agrees. “We recognize that all good things don’t continue to go up forever,” Brady says. “We’re fortunate in Portland that we’ve been discovered as a tourism destination and, even more importantly, that large businesses continue to come downtown” like WEX and Covetrus, both developing new headquarters. “Large businesses are a positive for the hotel market because they’re demand generators. So I remain optimistic about the opportunities.”
“It’s been interesting to see how little issue there’s been absorbing new rooms in this market,” says Thompson. “My opinion is we’re quite a ways away from saturation. I don’t see any signs of Portland ceasing to be a desirable destination, even if we head into a softening. I think people who are looking for a weekend away will come to places like Portland disproportionately over other markets, because it’s a short drive from a large region and there’s always something to do.”