Bay Area hotels ride the swell

A year of investor purchases and a recovering travel industry have resulted in a number of major renovations of San Francisco hotels, with more to come in the months ahead.

At the same time, construction continues on the InterContinental San Francisco, a contemporary-style business-traveler hotel at 888 Howard St. near the Moscone Center, and one of the few new offerings. Another new building, the eco-friendly Orchard Garden Hotel, opened in late 2006.

“The larger trend is that investment capital is looking at real estate, hotels in particular,” said Thomas Callahan, president and CEO of PKF Consulting. “What you have is a lot of money chasing hotels. The new owners, when they buy, are upgrading them.”

Add to that the recovery from 9/11— which kept hotels from doing their regular six-or-seven year renovations for years after the 2001 terrorist attacks — and what you have is a city full of new flat-screen televisions, new carpet and fresh linens vying for visitors.

San Francisco boutique hotelier Joie de Vivre Hotels recently went through the “re-flagging,” or rebranding process, at three San Francisco hotels after winning management contracts. Each included renovations, with $7.1 million spent on the former Sutter Hotel, now the Galleria Park Hotel, $3.8 million on Japantown’s Hotel Tomo (once a Best Western) and $7.2 million expected on Japantown’s Miyako Hotel, which will be renamed Hotel Kabuki in the fall.

At Hotel Tomo, the least-expensive renovation of the three, a lot of effort was spent to update a beige look, Joie de Vivre spokeswoman Dawn Shalhoup said. Extensive technology was also purchased, including a pair of rooms set up for giant-screen video game play.

Hotel officials said technology plays a large role in competitive upgrading, as do fitness facilities and new looks.

kwilliamson@examiner.com

businessBusiness & Real Estate

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