Even amid Covid uncertainty, TGC Group to build three new hotels while selling another
By Shelby Kellerman – Reporter, Wichita Business Journal Nov 20, 2020, 2:41pm EST Wichita-based TGC Group is planning to expand its portfolio of extended-stay hotels with the acquisition of vacant properties — two in Texas and one in Colorado — for the construction of three new WoodSpring Suites.
Nick Esterline, president and founder of TGC, says even amid the pandemic's impact on the travel and hospitality industry, he's confident in the extended-stay model. "That's a good base that doesn't go away regardless of whether the economy's doing good or bad," he said. "The extended-stay segment certainly weathered Covid and continues to weather it better than the industry as a whole."
In addition to the three purchases, TGC, a development, hospitality management and construction company, also sold one of its Woodspring Suites in Atlanta. That brings the company's portfolio to 14 properties across the south and southeastern U.S., with a total of 1,532 rooms.
The two new Texas hotels will be in Round Rock and Cedar Park, and the one planned for Littleton, a suburb of Denver, will be TGC's first in Colorado.
"The population growth in Denver and Colorado as a whole, but specifically the Denver metro, is fantastic," Esterline said. "Job growth is strong there. The age demographic is getting younger and younger and we love the markets where those three elements exist... It's just a perfect little storm for us. We've had our eye on Denver for a handful of years and have never found the right opportunity to get in there and this just gave us that chance."
TGC's construction division plans to begin work on the three hotels within the next 30 to 90 days, with openings targeted for late 2021 and early 2022.
Esterline said TGC's existing hotels have seen a gradual increase in occupancy since the Covid-19 pandemic nearly decimated the travel industry. RECOMMENDED
"We've seen a trend since sort of the March-April timeline in occupancy and rate availability in most of the assets, but we're not immune, we've got some that have not experienced and we continue to struggle on some of those," he said. "But I think it really depends on the nature of your guests — are they transient or are they extended stay? So we've by and large seen an uptick and a slow trend north, but not in every property."
He said the economy, extended-stay hotels seem to be outperforming others in the hospitality industry because of the types of guest it attracts. There's a lot of people who utilize those hotel rooms as home for 30 days until their new apartment or home is ready to move in, Esterline said, or divorcees trying to get back on their feet.
"A lot of our guests, in good times and bad, are more of the essential working nature, meaning they're in the construction industry, they're in the traveling nurse industry, they're folks that are going somewhere for extended periods of time for work and a lot of those jobs were still essential jobs to keep the world moving," he said.