Air travel return means more hotels by Sacramento International

The Sacramento International Airport hotel market is strong as travelers continue to return in record numbers spurring a new hotel and plans for more.

A dual-branded Hyatt House with 81 units and Hyatt Place Hotel with 108 rooms opened July 20 on Duckhorn Drive in the Gateway West neighborhood of North Natomas.

Site plans also have been submitted to Sacramento County’s planning officials for four new hotels near the airport.

They are a 92-room Candlewood Suites, a 112-room Springhill Suites by Marriott and two unnamed establishments, with 112 rooms and 80 rooms each.

The hotels are expected to be built on a tract of land off West Elkhorn Boulevard near Metro Air Parkway and Skyking Road in the unincorporated Metro Air Park.

The hotel plans by Galaxy Hotel Groups of Texas could be subject to review in the fall, said county spokesman Ken Casparis. He said he did not have a timetable for the construction of the hotels.

A spokesperson for Galaxy, which is based in San Antonio, did not respond to requests for comment.

Sacramento International Airport spokesman Scott Johnston said 13 million passengers are expected at the airport in 2023. If those projections hold up, that would put the airport back to levels not seen since 2019 and the COVID-19 pandemic.

After 2023, airport projections show a passenger growth rate of 4.3% per year for the next eight years, Johnston said.

The new hotels come has room occupancy in the Sacramento International Airport zone has recovered from pre-pandemic levels and is much stronger than the overall Sacramento hotel market, according to industry analysts.

Data from CoStar shows that airport-adjacent hotels had an average occupancy rate of 81.4% in the January-to-June period, returning to around the same level as the same period in 2019.

Room occupancy had dropped to as low as 19% in April 2020 as the coronavirus took root, CoStar data showed.

Average room rates of $169.72 for the first six months of 2023, meanwhile, are slightly higher than before the pandemic and have been increasing for the last three years, according to CoStar.

Generally, limited-service hotels that predominate near the airport can make a profit at an occupancy level of 70%, according to CoStar.

Overall in the city of Sacramento, the data shows, hotel occupancy was a lower, at 67.3%, in the first six months of 2023 and remains slightly below pre-pandemic numbers.

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Randy Diamond is a business reporter for The Sacramento Bee.

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