AUGUSTA — A new 120-room, $12 million hotel that opened last month on Western Avenue enters a local hotel market with occupancy rates that trail behind national and state averages.

The immaculate new four-story Homewood Suites by Hilton, which opened Aug. 16, specializes in “all suite” rooms seeking to draw customers for long-term stays of a week or more with kitchens equipped with full-size refrigerators and other home-like amenities in each room.

Hotel officials are confident there is sufficient demand for a new hotel, and say they see a growing market in Augusta.

“Augusta is a growing market, and with growth comes more room for rooms,” said Addie Stambaugh, general manager of the new hotel in a highly-visible spot alongside Interstate 95. “We’re really excited to be in the area and be part of such a wonderful community.”

The occupancy rate for hotels in the Augusta market was 53 percent in 2015, according to information from Smith Travel Research used by Matthew Arrants, of Pinnacle Advisory Group, in a recent presentation to the Maine Real Estate and Development Association. That is up by 1.7 percent over the prior year.

The statewide hotel occupancy rate was just under 57 percent in 2015. The nationwide hotel occupancy rate was about 65 percent.

Arrants, an industry analyst, said typically you don’t see new construction in markets with occupancy rates under 60 percent.

Asked if the new hotel could take business away from existing hotels, Arrants said it could.

“There’s an old expression some markets ‘are not over supplied, they are under demolished,'” he said. “I’m not saying that’s the case in Augusta, but it could be.”

Arrants said, however, that Homewood Suites may have decided to build in a market with relatively low occupancy in part because it hopes to attract demand from outside the market with its extended stay business model which is not yet widespread in Augusta.

Ross Cunningham, president and CEO of the Kennebec Valley Chamber of Commerce, said he welcomes the new hotel and said there is room for it to join Augusta’s existing hotel offerings without forcing any of them out of business.

“I firmly believe the growth in Augusta will support this additional hotel without creating any negative impacts on other hotels,” Cunningham said. “I think the demand is here, and it is growing. And each hotel has different specialties. This is just one more offering.”

Cunningham said potential customers for the long-term stay niche Homewood Suites is targeting could include companies bringing in employees for training in Augusta and medical professionals associated with MaineGeneral Medical Center.

Stambaugh said other potential guests are likely to include people traveling for business, people relocating, and people with government business with Augusta being the home to state government offices.

Cunningham said a company like Hilton deciding to invest here makes a positive statement about the region and its future.

“When an organization like Hilton identifies Augusta as a target market, it solidifies our belief we’re a growing and emerging group of communities that clearly has a bright future,” Cunningham said. “This kind of investment confirms we’re on the right track.”

The new building at 377 Western Ave., with natural stone columns accenting its exterior facade, is almost directly across Western Avenue from another Hilton-associated hotel, the Hampton Inn by Hilton, which sits behind Margarita’s restaurant.

Stambaugh said while both are Hilton properties, they have different room styles, and Homewood Suites targets longer-term stay customers while Hampton has more traditional hotel customers.

“They’re different properties with different room setups,” she said. “But we do look forward to working with them and forming a great relationship.”

Arrants said Hilton doesn’t believe the two brands compete directly with each other. He said Homewood Suites specializes in suites and has a higher price point.

Stambaugh said room rates will vary based upon season and other factors. She said group rates will be available, and the hotel has two meeting rooms available for use by guests.

As of Friday, a one-night stay this week in a studio room with a king bed was available for about $180. However, rooms were available for as low as $99 a night for dates later in the year and when the length of stay is longer, according to Homewood Suite’s online booking system.

The hotel has about 30 employees. Stambaugh said they’re still hiring, and people interested in seeking a job should come to the hotel to inquire.

The Augusta Planning Board approved the project in November 2014.

Existing hotels in the immediate area include the Hampton Inn on the other side of Western Avenue, a Super 8 motel just to the south, the Augusta Inn just up Edison Drive, a Quality Inn and Suites Maine Evergreen Hotel nearby on Whitten Road and the Senator Inn & Spa less than a mile away on Western Avenue.

Auburn Developer George Schott developed the property, which is overseen by Portsmouth, New Hampshire-based Ocean Properties. Schott, who owns the Auburn Mall and other commercial properties in Maine and hundreds of units of former base housing around the former Brunswick Naval Air Station, told the Planning Board his company researched the demand and determined “the need and numbers are there.” He said the extended-stay model has worked well elsewhere.

The 11-acre site was cleared of most trees in recent years and is made up of five combined lots, including three lots on White Rice Lane where homes were demolished to make way for the hotel.

Homewood Suites includes breakfast with room rental and also provides food for an evening social every Monday through Thursday night to help people unwind from their day in the hotel’s “lodge” area and in an adjacent courtyard, both of which have gas fireplaces.

The hotel does not have a restaurant or bar.

The hotel has an indoor pool and fitness room with treadmills and other exercise equipment.

Stambaugh said word is starting to spread about the new hotel. They have been busier than expected so far and look forward to a busy future.

Keith Edwards — 621-5647

[email protected]

Twitter: @kedwardskj

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