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Hotel Thompson San Antonio — the first new luxury hotel in the city in more than five years — is scheduled to open downtown on Jan. 27.
The 20-story hotel on the River Walk, near the Tobin Center for the Performing Arts, will feature 162 rooms and 33 suites, and charge some of the highest room rates in San Antonio.
The city’s hospitality industry likely will still be struggling when Hotel Thompson open its doors. Many business travelers are staying home, and San Antonio’s convention business is nearly at a standstill.
Nevertheless, visitors are trickling back, though mostly on the weekends.
Hotel Thompson originally was scheduled to open in late October or early this month, but its owners decided early next year would be a better time to launch.
“We decided to push it back a little obviously because of the pandemic,” said Ted Knighton, the hotel's general manager. “But we’re ready to introduce it now.”
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Knighton said a standard room will go for $300 a night during the week and $400 on the weekends. Rates jump to $2,500 a night for the hotel's 2,100-sq.-ft. penthouse suite, with two bedrooms, a dining area, a living room with a pool table and a private terrace.
Among San Antonio hotels in the downtown area, only Hotel Emma at the Pearl generally charges higher rates. The hotel’s website lists a standard room for $475 a night on Wednesday, Jan. 27, the day Hotel Thompson is scheduled to open.
Hotel Emma opened in November 2015.
The Thompson chain, part of the Hyatt Corp., is aiming for excitement, with “celebrity chefs” — Knighton said the hotel will identify them at a later date — anchoring its restaurants, art exhibits and disk jockeys playing music poolside.
“There really is not a hotel in San Antonio that will have the nightlife scene like we will have,” Knighton said.
The $130 million building housing the hotel also includes 59 condominiums, called the Arts Residences at Thompson San Antonio.
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Residents of the condos, which priced from the low $500,000s to more than $4 million, will share the pool deck and workout room with hotel guests. They’ll also have access to hotel services, such as 24-hour room service.
Condo owners started moving in last week. Fifty-two of the 59 units are sold.
Amid the COVID-19 downturn, which has forced most hotels to cut workers, Knighton said one factor in Hotel Thompson’s favor is the limited number of luxury properties in San Antonio.
“San Antonio is different,” the general manager said. “It doesn’t have a surplus of luxury products.”
He said guests in the luxury market are traveling sooner than expected. The hotel, he added, has generated strong interest from groups for meetings and catered events, such as weddings, for next summer and fall.
Downtown hotels in all price ranges filled 33.8 percent of their rooms in September, according to STR, a firm that tracks hotel data. That’s down from 64.6 percent a year earlier.
The downtown hotel market has been slowly recovering since April, when the pandemic shut down tourism. Only 10.2 percent of hotel rooms were filled that month, the STR data shows.
Still, many hotels are a long way from profitability.
Hotel consultants say luxury hotels usually need an occupancy rate of at least 60 percent to stay in the black.
Overall, Hotel Emma has prospered since opening in late 2015, said Paul Vaughn, senior vice president at Source Strategies, a locally based hotel consulting firm.
Vaughn said the San Antonio market should be able to support several luxury hotels — Hotel Contessa is another — in the downtown area. But how long it will take Hotel Thompson to turn a profit is an open question.
“It would not surprise me if the first couple of quarters for the hotel are not that hot,” Vaughn said.
Houston-based DC Partners is developing the Thompson hotel and condo project.
DC Partners president and CEO Robert Contreras said he was elated to hear drugmaker Pfizer’s announcement Monday that its experimental COVID-19 vaccine is more than 90 percent effective. If approved by U.S. regulators, people could start receiving the vaccine late this year.
“We are hoping that by the second quarter of 2021 things will be getting back to normal in terms of travel,” Contreras said.
Hotel projects have been scrapped nationwide since the pandemic started, but most hotel developers who had their funding in place and had started construction stayed the course, said Stephanie Ricca, editorial director at the trade publication Hotel News Tonight.
“Hotel stakeholders need some return on their investment,” she said. “So in a pandemic situation like this, we’ve seen a lot of hotels opening.”
Ricca said, however, that it's not uncommon for developers to push back their debuts several months past their originally scheduled opening.
The Thompson chain operates nine hotels in the U.S. and Mexico. DC Partners will open the 10th Hotel Thompson — the 51-story building includes apartments — in downtown Dallas on Wednesday.
Knighton said DC Partners is also planning hotels for Houston and Austin.
The San Antonio location will be the Thompson brand’s 11th property. Thompson will manage the hotel for DC Partners.
A reporter toured the San Antonio hotel last week. Many of the rooms were finished, but the lobby, rooftop patio and fourth floor pool deck were still under construction.
Knighton said the Thompson plans to draw locals to its first-floor restaurant, called Landrace, and a second restaurant on the roof deck. The hotel will also offer a spa and beauty parlor that will be open to non-guests.
The Thompson is hiring 100 employees.
Knighton said about 1,500 people have applied for the jobs, a reflection of San Antonio’s depressed hospitality industry. Managers are conducting Zoom meetings with candidates, and finalists will be invited to a job fair at the hotel on Nov. 17.
The hotel-condominium project has not been without controversy. In 2018, CD Partners received $10 million in incentives through a city program to encourage downtown housing.
Critics had said the incentives weren’t necessary to stimulate residential development in the area — the real estate market had strengthened in recent years. City officials, however, maintained the subsidy would help stabilize the downtown housing market.
The incentives include the reimbursement of $9.5 million in property taxes and water utility and city fee waivers.
Without the incentives, Contreras said, the project would not have been financially feasible.
“The incentives were absolutely essential,” he said.
Contreras said DC Partners secured 60 percent of the equity for the project while the other 40 percent came from several dozen international investors under the federal EB-5 program.
The program allows foreigners to obtain vivas to live in the U.S. by making at least a $500,000 investment in a project in an area with high unemployment. The projects must create at least 10 jobs.
Randy Diamond covers tourism and the travel industry. To read more from Randy, become a subscriber. randy.diamond@express-news.net
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