Developers are proposing two new waterfront hotels that could add almost 300 rooms to Portland’s hot tourism market.

Furniture chain West Elm unveiled plans Tuesday for a 150-room boutique hotel as part of a redevelopment on Portland’s eastern waterfront. That announcement followed a proposed change to the development plan for a former lumberyard on Commercial Street to include a hotel and conference center.

As Portland has grown into a successful tourist destination, the supply of rooms and the revenue of hotels have kept pace. But it’s uncertain whether adding hundreds of rooms in an already crowded market will pay off for developers.

Portland’s hotel occupancy rate hovers around 70-85 percent during the peak summer season, but dwindles in the colder months. That puts the city’s average year-round occupancy rate just above 60 percent – perfectly good, but not on fire, said Bobby Bowers, senior vice president of operations at hospitality analysis company STR.

“Just looking at the numbers, it would in some ways suggest you could add some supply there and it wouldn’t be a huge downturn to the market,” Bowers said, noting that some of the city’s older hotel stock could face competition from new properties.

“It is OK, (but) it is not screaming ‘we need more supply here,’ ” he said.


West Elm, a chain of high-end furniture and home décor stores, entered the hospitality sector in 2016, with properties proposed for five U.S. cities scheduled to open in early 2019. West Elm’s hotels are managed by hospitality firm DDK.

The Portland location is advertised as a boutique hotel situated above the waterfront that offers views of Casco Bay. The company says its hotel will have an outdoor harbor-view pool and a lobby bar and restaurant.


The proposed hotel is part of a 10-acre redevelopment along the city’s eastern waterfront around the former Portland Co. complex at 58 Fore St. CPB2, a local development company, gained approval last year for a development master plan that proposes creating a waterfront community in the area with residences, restaurants, shopping and a marina. Construction of the first phase of the project is expected to begin in spring 2018.

West Elm’s announcement speaks to the “attractiveness of the city of Portland as a destination city for both Maine residents as well as the many visitors that Portland welcomes every year,” according to a statement from Portland Foreside Development Co., an affiliate of CPB2 that is leading the redevelopment project. Jim Brady, a principal with CPB2, did not respond to an interview request Tuesday.

Portland’s Planning Department has not received an application for the hotel development and had not seen West Elm’s announcement, said city spokeswoman Jessica Grondin.


Reger Dasco Properties, responsible for redeveloping the former Rufus Deering Lumber Co. yard on Commercial Street, also is considering a hotel project. On Tuesday, The Planning Board will consider requested changes to the developer’s master plan that would include a 128-room hotel and conference center.

Preliminary plans for the development filed in December showed three six-story buildings with about 300 condominiums and market-rate apartments, and first-floor retail space.

The company’s revised plan proposes the hotel and 206 condominiums, along with parking and retail space.

Joe Dasco, a partner in the venture, did not respond to an interview request Tuesday.


The two proposals follow a flurry of hotel projects in Portland aimed at high-end guests. In February, Bateman Partners unveiled plans for a 96-room hotel, office and retail complex on the waterfront, and last spring the Planning Board approved a 150-room AC Hotel by Marriott in the East End near the Portland Foreside property.


Even though occupancy rates were generally flat or slightly improved last year, revenue per room was up, according to a January analysis of the market from the Daigle Commercial Group in Portland.

Portland’s market is still growing and can sustain the addition of a few hundred more rooms, said Mitch Muroff, a broker with the firm.

“Maine has been performing well, Portland has been performing exceptionally well,” he said. “We don’t think there is any reason to be concerned with about 300 rooms coming into the Portland market.”


However, Sean Riley, president of the Maine Course Hospitality Group, thinks new hotel proposals are coming at the tail end of a development cycle and might have a hard time competing. Locally, the company manages the Portland waterfront Courtyard by Marriott and the Courtyard Portland Airport properties, as well as the Homewood Suites in Scarborough.

“I’d be nervous about putting a new hotel in,” Riley said. “The oversupply is going to be a detriment to someone in this market, we don’t know who.”


The Courtyard Marriott was built in 2014, and since then the Press Hotel has come in on Congress Street and AC Hotel by Marriott has been approved, Riley said. He’s heard rumors of other hotel developments on the way, but doubts all the planned hotels will be built.

“We are strong, we have a good brand, have a good hotel,” Riley said. “We’ll just have to sharpen our game and play a little harder.”

Although summer is always going to be the strongest season for hotel bookings, changes in Portland’s tourism market might mean a gamble on hotel rooms will pay off. Visit Portland, which markets the city to visitors, has been aiming its efforts at making Portland a destination in the autumn, spring and winter.

“As it is right now, hotels are full, they are doing really well, when they need our help is the shoulder season and the winter months,” said Lynn Tillotson, president and CEO of Visit Portland. “We have to work that much harder to fill those rooms to make sure everyone is successful.”

Peter McGuire can be contacted at 791-6325 or at:

[email protected]

Twitter: PeteL_McGuire

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