January 1, 2004
- The Boston Globe
This week’s opening of the glitzy 112-room Onyx Hotel on Portland Street near North Station is a stylish addition to a downtown district long considered commercial has-been.
Where workers once ferried between outmoded factories, underused warehouses, and low-rent offices, doormen are now ushering guests into the lobby of this $24 million boutique hotel, where the bar top is illuminated and rooms cost up to a $209 per night and the penthouse suite will run guests $1,800 for a night.
"We’re in a neighborhood that’s becoming popular," said Thomas W. LaTour, chairman and CEO of Kimpton Hotel & Restaurant Group LLC, operator of 39 hotels and 32 restaurants in 14 cities. A year ago, the San Francisco company cut the ribbon on the colorfully decorated, 236-room Hotel Marlowe in East Cambridge. The Onyx is a block from the Fleet Center, where the Democratic National Convention will be held July 26-29, and near tourist attractions like Quincy Market as well as public transit.
The rooms, adorned with original art and Art Deco furniture, are about 50 percent booked in May, 70 percent booked in June, and 80 percent booked in July - and sold out for the convention week. The hotel also sits near the Big Dig. "The money spent on public improvements was the incentive for us to build in this location," said LaTour, who expects his privately held company to earn profits on 2004 revenues of about $350 million.
The Onyx is entering Greater Boston’s expanding 18,000-room hotel market. In 1997, the city and state agreed to finance development of the Boston Convention & Exhibition Center in exchange for 4,800 new hotel rooms to accommodate conventioneers and generate tax revenues to help pay for the South Boston center. Since then, about 8,700 new rooms have opened, are in construction, or have been authorized. This year, five new hotels with 676 rooms will open, while construction on 1,132 more rooms will start by 2007, said Matthew Arrants, director of Pinnacle Advisory Group, a hotel consulting firm.
But Boston hotels have been hit hard by the region’s slow economy and the travel slump since the 2001 terrorist attacks. After the hotel industry’s peak in 2000, revenue had fallen by 9.3 percent nationwide by 2003, but by almost 40 percent in Greater Boston, said Geffrey Baekey, a manager at Pricewater Coopers.
"Boston has added twice as many rooms as the US average but has had the biggest loss of revenue per room in the country," he said. "It’s costly to visit here, business travel hasn’t rebounded as in other recoveries, and the regional economy hasn’t added jobs."
The Onyx, nevertheless, has its merits. The all-new 12-story building, designed by Boston-based Group One architects, has little competition and will benefit from brisk residential development and office upgrades nearby. Yet, Baekey said, the challenges include a lack of on-site parking and the high fixed costs but limited operating efficiencies typical of small properties.
Still, LaTour is certain the Onyx - with its attentive staff and lively interiors - will succeed. "The frivolous design and flattering lights make people feel good," he said. "When a lot of people are feeling good, it’s called a party."