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Updated: February 24, 2021

$6M, 101-room South Portland hotel planned amid its own competition

Courtesy /City of South Portland A rendering shows the entrance to the 101-room TownePlace Suites hotel proposed for a vacant two-acre parcel of land in South Portland.

The owner of four South Portland hotels wants to build another between two of them, and will present plans for the $6 million project to the city’s Planning Board Wednesday night.

New Gen Holding Co. LLC is seeking site plan approval for a 101-room TownePlace Suites hotel at 70 Maine Mall Road, an undeveloped two-acre lot next to a Home2 Suites hotel on the east, at 50 Maine Mall Road, and a Comfort Inn on the west, at 90 Maine Mall Road. The area is surrounded by the mall, the Maine Turnpike and Portland International Jetport. 

Courtesy / City of South Portland
The proposed TownePlace Suites hotel would occupy a vacant two-acre lot, outlined in red, between two other hotels owned by New Gen.

According to city documents, New Gen is affiliated with New Gen Hospitality Management LLC, the owner of the Home2 Suites and the Comfort Inn — as well as a Days Inn, at 461 Maine Mall Road, and a Howard Johnson hotel, at 675 Main St.

Another New Gen company purchased the vacant land at 70 Maine Mall Road in 2016 for $2.5 million, according to tax records. The city estimates construction costs of the project at $6 million, with work beginning this spring and completed by June 2022.

The principal of the New Gen companies and several other related ones, Suresh Gali, did not respond to repeated inquiries from Mainebiz for this article.

The four current hotels and the proposed four-story, 60,600-square-foot one all have roughly the same guest capacity. All are designed for cost-conscious travelers. And the similarities don’t stop there.

Both TownePlace Suites and Home2 Suites, which opened in South Portland three years ago, are extended-stay hotel chains, with kitchens, amenities and pricing to accommodate businesspeople and others who are visiting for a while.

Both chains target each other by name in their marketing. Both are managed by global hoteliers: Home2 Suites by Hilton Worldwide Holdings (NYSE: HLT), and TownePlace Suites by Marriott International (Nasdaq: MAR). Comfort Inn is also a chain, a budget line operated by Choice Hotels International (NYSE: CHH).

If its new project is approved, New Gen will owns branches of all three, side by side. Their proximity and ownership prompted the Maine Department of Environmental Protection to review them as a "common scheme of development" in October 2018, when New Gen first submitted plans to South Portland. The DEP review is sometimes required for such add-on projects, and the New Gen one passed.

Squeezing the competition

It’s not unusual in the fiercely competitive hotel industry for rival franchises to sit within range of a well-aimed ice bucket. And the area near the mall and the jetport is already lined with lodgings.

New Gen’s Days Inn and Howard Johnson, budget brands of Wyndham Hotels & Resorts (NYSE: WH), are less than 10 minutes from the site of the proposed TownePlace Suites. Competing extended-stay properties are also nearby, including a Candlewood Suites — a brand of InterContinental Hotels Group (LSE, NYSE: IHG) — that until recently was flagged as a TownePlace Suites.

InterContinental and the four other multinational companies together account for 97 hotel brands and tens of thousands of hotels, so their geographies naturally overlap. But franchisees and other businesses that provide accommodations as part of a chain try to steer clear of each other where they can. Often, the breathing space is required in a franchise agreement.

However, that's starting to change, and New Gen may be an example of the trend.

Driven by scarcities of land and a need to squeeze out greater operational efficiencies, more hotels are squeezing into common sites. In fact, a December 2018 report by New Hampshire-based consultant Lodging Econometrics forecast that 414 hotels would soon break ground on 281 shared sites across North America.

Hotels in a common location typically belong to the same family, but not always. In fact, two years ago TownePlace Suites and Home2 Suites opened hotels totaling 248 rooms at a single site on the Las Vegas Strip, and today operate independently there and even share a parking garage.

Back in South Portland, the two brands would be merely neighbors, facing each other across Darling Avenue. But they would share common ownership, as well as a common stormwater system. On the other side of the vacant site, a driveway from the Comfort Inn would link to the TownePlace.

Photo / William Hall
The Home2 Suites hotel, on Maine Mall Road in South Portland, sits across Darling Avenue from the site of a proposed TownePlace Suites hotel, at right.

Another brand that almost joined the face-off is Avid Hotels, a midscale brand belonging to InterContinental.

New Gen’s proposed hotel initially was to have carried the Avid flag, and plans submitted in 2018 by South Portland engineering firm Gorrill Palmer and updated this week depicted a building with Avid's logo. A business created during the original planning and managed by Gali, Avid Hotels Portland LLC, owns the land for the proposed hotel. It's not clear why the Avid arrangement fell through.

The South Portland Planning Board meeting is scheduled to be held virtually at 6:30 p.m., and more information can be found here.

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