Hotels and Downtown Knoxville

Over the past several years, there has been a significant increase in the number of hotel rooms available in Downtown Knoxville.  Our office has been a development partner on several of these projects, including the new Embassy Suites in the Conley Building.  The question today is:  Are there too many hotels in downtown Knoxville?

Some new planned developments such as a new 170 room upscale property by Aloft Hotel have been scaled back.  This project originally included the Aloft Hotel and a 230 unit apartment building  near the old Supreme Court Building.  The project has been scaled back form 82.8 million to 78 million. 

This isn’t really a negative for Knoxville.  It’s just part of sustainable growth.  We’ve seen similar patterns in cities all over the country.  

“Knoxville grows at a certain percentage rate, so you have to make sure you don’t out pace the growth,” There’s so many hotels coming online that I’m sure they’re wanting to test the market a little bit to see how (the hotels) do before they approve another franchise.  They’re probably not against it but want to see where everything is relative to new ones … a more cautious approach, in my opinion, It doesn’t mean they’re done here.”

 – Oliver Smith IV

Rick Emmett, Knoxville’s downtown corrdinator agrees.  He can see where companies may want to be cautious and invest wisely, but also said Knoxville is ready and willing to work with any developer who want to create something new here.  Developer Rick Dover has other ideas.  He is planning a mixed-use apartment building and shops on Henley street that could support an Airbnb styled hotel.  Managed apartments that can be rented via internet services.  This type of building supports small buisnesses, similar to B&B’s and Boutique hotels.  These types of properties allow Knoxville’s “authentic Tennessee hospitality” to shine through.

The current downtown hotel properties and available rooms:

• The Tennessean: 82 rooms
• The Hyatt Place (former Farragut Hotel building): 165 rooms (also a Dover project)
• Courtyard by Marriott/Residence Inn: 144 rooms and 88 rooms, respectively
• Andrew Johnson Building (pending): 94 rooms
• Embassy Suites: 160 rooms

Yes, there are ebbs and flows, ups and downs in the market, however Knoxville continues to grow and more hotels and residential buildings will continue to be built in downtown Knoxville.  It’s still a great place to invest.