Allentown hotel expects big boost from hockey arena development

When Allentown's hockey arena opens its doors this summer, so will the attached Renaissance Hotel, one of Marriott's more luxurious and expensive international hotel brands.

But less than a half-mile away, there's another, much smaller hotel already open, and it hopes to take advantage of downtown development to fill its own, smaller niche.

The Holiday Inn at 904 Hamilton St. is hoping to borrow $1.8 million in Neighborhood Improvement Zone tax money to renovate the hotel and establish a first-class restaurant at the building's ground level.

Far from concerned about competing with the Renaissance Hotel, the Holiday Inn owners expect to market themselves as a less expensive, more family friendly alternative for visitors to the city.

"The Renaissance Marriott is an awesome hotel and I think everyone in Allentown is really excited about them coming here," said Mike Stoudt, a financial consultant representing the Holiday Inn owners.

"The Holiday Inn is a nice compliment to that but an entirely different type of hotel that serves a different type of customer that still wants to visit Allentown for a hockey game or concert," Stoudt said.

The proposal calls for a remodeling of the nine-floor hotel's 215 rooms, as well as its banquet rooms and lobbies, along with major improvements to the existing 100-seat restaurant.

Holiday Inn co-owner Vinay Barthwal expects those improvements will create as many as 60 jobs, at least 35 of which will be full-time and most of which will be filled by local residents.

"We want people to be able to walk to work," he said.

Barthwal hopes to have the improvements done by September -- which coincides with the projected opening of the hockey arena and Renaissance Marriott -- but it could be several months before it goes before a vote for final approval.

The current restaurant -- simply called "Bar and Grill" -- is currently run by the hotel itself, mainly because it is obligated to serve food for the guests. It had once been a Brazilian steakhouse.

The newly proposed restaurant -- the name and cuisine for which has not yet been determined -- will be operated by a "top-notch" management company and the exterior facade will be improved to better highlight the eatery, Barthwal said.

The Holiday Inn had been the Hamilton Street Hilton before Barthwal and co-owner Ramesh Majethia bought it in 2007, just as the economy began its decline toward recession.

As a result, the Holiday Inn has not been profitable and currently has a roughly 35 percent occupancy rate, which the owners hope will improve to the lower 60s after the arena opens.

"We've suffered the losses and continued on," Barthwal said. "We had the chance to get out and we didn't because we knew one day Allentown would turn around. We saw the light in the tunnel that something was coming up."

The hotel is within the city's 127-acre Neighborhood Improvement Zone, which diverts local nonproperty taxes into development at the city's waterfront and downtown, including the hockey arena.

The Allentown Neighborhood Improvement Zone Development Authority, which oversees improvement zone development and borrowing, will ultimately vote on the Holiday Inn project.

But the proposal was met warmly by the authority's three-member project committee today, including member Alan Jennings, who expressed gratitude to the owners for "sticking in" through the difficult financial times.

"It would've been devastating if you bailed out and were replaced by a lesser tenant," Jennings said. "We wouldn't have wanted a Motel Six there, no disrespect to Tom Bodett."

The hotel is also seeking tenants for retail spaces in its building, and Hertz Rental Car is expected to occupy one of the ground-floor spaces soon, Stoudt said.

The Holiday Inn has a current average daily rate of $85, which Barthwal expects could increase by $15 and $20 once the hockey arena opens and tourism increases.

It is one of two hotels already within Allentown, along with the historic Americus Hotel at Sixth and Hamilton streets, which is seeking improvement zone loans for $16.5 million in renovations.

Source: lehighvalleylive.com