Plans for a luxury hotel at Stanford Shopping Center, an extended-stay hotel to replace the Palo Alto Bowl and Motel 6 on El Camino Real and a possible combination extended-stay hotel and restaurant on the current Ming's Restaurant property are being explored, according to city officials and developers.
The hotel-building wave is being aided by a spike in hotel occupancy in recent years. Revenues from the hotel transient-occupancy tax rose 6 percent last year, according to planning commissioner Pat Burt.
It couldn't come soon enough, say some city officials and residents, who are still bemoaning the loss of Rickey's Hyatt and its tax revenue. To recoup some of the funds, city officials are asking voters this November to approve an increase in the city's hotel tax from 10 to 12 percent.
The Stanford hotel would include 120 rooms with restaurant, bar, conference and meeting-room facilities. It is part of an overall proposed expansion of Stanford Shopping Center by the Simon Property Group, Inc., the mall's owners.
The hotel would cover 120,000 square feet and rise to 54 feet in height, according to the preliminary development plans. It would primarily serve Stanford University, Stanford Medical Center and the shopping center. Its location is proposed for either the corner of Quarry and Arboretum roads or the corner of Quarry Road and Pear Lane.
Preliminary estimates of annual revenue expected from the shopping center hotel alone are $800,000 to $960,000, according to Palo Alto's Assistant Planning Director Curtis Williams. And the less-pricey 125- to 200-room hotel considered for the Palo Alto Bowl/Motel 6 location is projected to bring in $1 million a year in taxes, according to Ryan Leong, development manager with SRM Development, which is partnering with Barry Swenson Builders on the project.
The Palo Alto Bowl/Motel 6-site project is still in the planning stages, but the developers are considering TMH Hotels, a Wichita, Kansas-based management company known for its Residence Inns and Hilton Garden Inns, among others, he said.
Leong said the developers are looking at a moderately priced, extended-stay hotel. Such hotels can be cash cows, since longer stays mean lower labor costs and such hotels offer fewer costly perks, according to industry reports.
The development would also include 50 town homes on the back portion of the approximately 3-acre property, he said.
The Ming's hotel is still being explored, according to owner Vicky Ching.
"It's far, far away," she said.
Ching estimated firm plans for a hotel/restaurant complex at the Ming's site on Embarcadero Road east of U.S. Highway 101 would not materialize for at least three years.
Ching is reticent to discuss the project, since a small mention in the news some months ago created some fear among a few clients who booked banquets that Ming's might close, she said. Ming's books many banquets at the restaurant and has no plans to change its services, she said.
"We're not in a hurry to have a hotel because the restaurant is still doing OK. If we have a hotel, we would have a smaller restaurant. At any rate, we would have an interim site if we build," she said.
Ching said that as China becomes increasingly prosperous and with the Asian tourist market growing, she expects an extended-stay hotel might be worth exploring. The combination of a family-style hotel with the restaurant could be a winning combination, she said.
"Every major chain is considering (an extended-stay hotel)," she said.
Planning commissioner Burt said hotels make sense as part of Palo Alto's overall goal to be a destination city. The hotel market is the strongest it has been since the dot-com bust, he said.
Two years ago, hotel occupancy rose 1 percent, compounded by a 1-percent increase in the average hotel room price, he said.
"The city got a 2.5 percent bump in revenue," he said, with the average room rate being $150 per night.
Hotels impact less on communities, too, according to Burt. Traffic generated is the lowest of any use and most of those trips are not at peak hours. The hotels offer the best opportunity in the long run for added revenue, he said.