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Terry Cowgill
Joe Toole's recently opened 89-room Courtyard Marriott on Route 7 in Lenox. Next door, competitor Vijay Mahida plans to replace the defunct Magnuson Motel with a 100-room extended stay and conference center complex.

The Berkshires ‘Hotel Wars’: How many is too many?

By Sunday, Jul 16, 2017 News 5

Berkshires — For the last couple of decades, they seem to have been popping up like weeds — or perhaps like redwoods. The Berkshires have seen a building boom marked by dozens of hotels and resorts, some of them large and muscular enough to house a small army.

But how much is too much? Does the demand actually exist for all these rooms and services? Or are developers pinning their hopes on the shopworn notion that if they construct those behemoths, tourists and travelers will fill the vacuum?

Joe Toole, at left, with attorney Rich Dohoney at the hotel opening. Photo: Terry Cowgill

Joe Toole, at left, with attorney Rich Dohoney at the hotel opening. Photo: Terry Cowgill

“I don’t think so,” said hotelier Joseph M. Toole, whose company recently opened an 89-room Marriott Courtyard on Route 7 in Lenox, near the Pittsfield line. “It’s no longer ‘build-it-and-they-will-come’.”

Toole held an open house June 28 to celebrate the opening of one of the largest hotels in the Berkshires. Its four floors loom above a hillside that make it look even more imposing from that busy stretch of Route 7 across from Lenox Commons.

The Marriott Courtyard features a restaurant — Toole avoids the term, preferring the upscale “bistro” — as well as an indoor pool, jacuzzi, fitness center, indoor lounge with oversized chairs and an outdoor lounge with an open-air fire pit. And cell service is five bars. There’s a tower literally right on the edge of the parking lot.

Joe Toole helps his mother cut the ribbon on the Marriott Courtyard. Photo: Terry Cowgill

Joe Toole helps his mother cut the ribbon on the Marriott Courtyard. Photo: Terry Cowgill

After helping his 101-year-old mother Marie cut the ceremonial ribbon to open the facility, Toole paused for a brief Edge interview, saying he has “high expectations” for the Marriott, “but we’ll have to work really hard.”

Asked whether the Berkshires market could bear another large hotel, Toole replied, “We are beyond saturation at this point, but we had planned this awhile ago and will have to work to get the business.”

Toole said he and his team, which includes his four children and a son-in-law and daughter-in-law, will work to make sure “everything is perfect” and bring in business that would not otherwise come to the Berkshires. It’s a concept he calls “latent demand.”

“We see this market as saturated,” Colin Toole, Toole’s son and CEO of Toole Companies, said in an interview in the new hotel’s toney bistro. “We don’t see any new demand in the Berkshires right now.”

Latent demand, as defined by the Business Dictionary is, in part, a “desire or preference which a consumer is unable to satisfy due to lack of information about the product’s availability.”

As an example of latent demand, the younger Toole cited the possibility that business travelers who intended to stay in Albany or Springfield might be enticed into lodging in the Berkshires instead, because during downtime they could take advantage of the county’s superior cultural and tourism offerings. In addition, he said some travelers might be tempted by the Courtyard because it offers “a better product than a Hampton or the Yankee.”

On the Pittsfield/Lenox line Vijay Mahida last year opened the 95-room HIlton Garden Inn

On the Pittsfield/Lenox line Vijay Mahida last year opened the 95-room HIlton Garden Inn

While he has redeveloped some smaller properties into hotels, the elder Toole is perhaps best known for large hotel projects. He has successfully developed the Hampton Inn & Suites and the Yankee Inn, both on Route 7 in Lenox, and the Yankee Suites Extended Stay on West Housatonic Street in Pittsfield.

How strong the demand for lodging is in the Berkshires depends on whom you talk to, according to Williams College economics professor Stephen Sheppard, who has conducted a number of studies on the economy of the county.

“The hotel issue is a difficult topic to report on because almost every existing hotel owner/operator will say that the Berkshires is getting overbuilt and that cities/towns in the region should not be allowing so many new hotels,” Sheppard told The Edge. “This is to be expected, since few business persons welcome having additional competition.”

Sheppard is the author of a 2009 study, commissioned by the Berkshire Chamber of Commerce, which found that the nonprofit sector was generating $1.9 billion in the Berkshire County economy every year and employing more than a third of its workforce. By 2012, that figure had risen to $2.4 billion from the nearly 375 Berkshire County nonprofits, including visitor impact generated by non-profit expenditures.

Mahida family at the 2015 ribbon cutting for the Hilton Garden Inn in Pittsfield. Photo: David Scribner

Mahida family at the 2015 ribbon cutting for the Hilton Garden Inn in Pittsfield. Then Pittsfield Mayor Dan Bianchi (far left), Congressman Richie Neale (second from left) and Fairview Hospital CEO Gene Dellea (at right) took part. Photo: David Scribner

Anecdotally, Sheppard says he knows a well-established arts entrepreneur who moonlights as a tour organizer for visitors who want to see the galleries and cultural attractions in the Berkshires. The organizer told Sheppard she could be booking more groups but cannot find blocks of available hotel rooms during the season.

“This suggests to me that hotel availability is constraining travel to the area and limiting the potential for artists and galleries to prosper in the area,” Sheppard surmised.

Great Barrington resident and lodging magnate Vijay Mahida is an adversary of Toole’s. Their rivalry has evolved over the years into what some have dubbed the “hotel wars” in Lenox and Pittsfield. Like Toole, Mahida and his wife Chrystal have been enormously successful in the Berkshire County hotel scene.

In addition to the Marriott-branded Fairfield Inn in Great Barrington, Mahida owns the nearby Monument Mountain Motel and in September of 2015 opened the 95-room Hilton Garden Inn  in Pittsfield. Mahida’s brother, Pravin Mahida, owns the Days Inn in downtown Great Barrington.

A rendering of the Mahida family's Berkshire Hotel on Bridge Street, adapting the Searles School.

A rendering of the Mahida family’s Berkshire Hotel on Bridge Street, adapting the Searles School.

Last year, Mahida got the go-ahead from the Selectboard to convert the former Searles Middle School on Bridge Street into an 88-room hotel and conference center. As if to go Mahida one better, during the Mahidas’ permitting process, Toole actually floated the idea of building an upscale 95-room hotel across the Housatonic River on the polluted 100 Bridge Street property, the site of the former New England Log Homes factory.

The two hoteliers have also locked horns in court, most recently in May 2014 when Mahida sued Toole’s company for allegedly contributing to a major delay in the construction of Mahida’s Hilton Garden Inn project because a corporation with ties to Toole purchased a small parcel near the Hilton site and later challenged access rights for the hotel project. The Hilton opened the following year, the suit was settled and the terms were not disclosed.

And right next door to Toole’s brand new Marriott Courtyard, Mahida also acquired the old Magnuson Hotel, which he intends to demolish and replace with a 100-room Element Hotel by Marriott, which will be an extended stay facility and conference center.

Vijay Mahida and Dave Carpenter at hearing for the Berkshire Hotel on Bridge Street in Great Barrington. Photo: David Scribner

Vijay Mahida and Dave Carpenter at hearing for the Berkshire Hotel on Bridge Street in Great Barrington. Photo: David Scribner

But Mahida and Toole do have one thing in common. Neither is sure there’s a lot of room left in the Berkshires market for large hotels.

“Increased competition in the Berkshire lodging market and sharply rising construction costs will mean that those projects in the development pipeline will have to be innovative in how their projects are structured so as to achieve financial success,” Dave Carpenter, Mahida’s director of administration, told The Edge.

Not surprisingly, as an example of that innovation, Carpenter cited Mahida’s plans for the Magnuson. But in a rare note of agreement, he echoed the Tooles’ sentiment that those who run new hotels in the Berkshires will have to “work harder” to be competitive.

“My sense is that the intense competition in the market has all operators lifting their game, to provide even better experiences for guests,” Carpenter said. “That is a very good thing for the Berkshires.”

Mahida himself added that he admires “what competitors like Sarah Eustis and her team at Main Street Partners [which owns the Red Lion Inn] are doing to help bring more visitors to the market. When the lodging industry is truly market focused, we can together create a rising tide that lifts all boats.”

The upscale Hotel on North opened in 2015 in downtown Pittsfield.

The upscale Hotel on North opened in 2015 in downtown Pittsfield.

Others aren’t convinced the market is saturated. Lauri Klefos is executive vice president of 1Berkshire, the umbrella organization created in 2010 to coordinate the region’s economic and cultural agencies. She said visitor spending in the Berkshires has increased by 25 percent over the last five years.

“There are lots more people coming here and spending more money,” Klefos said. “That has increased demand and has developers looking for new hospitality properties.”

Klefos noted several expansion projects of cultural destinations in the Berkshires, either in size or in year-round programs: the Clark Art Institute in Williamstown completed an expansion in 2014 that added almost 100,000 square feet to its already sprawling physical plant.

Tanglewood, the cultural anchor of the Berkshires and the summer home of the Boston Symphony, earlier this year announced its first major expansion since the addition of Ozawa Hall some 20 years ago — a complex of four pavilions with state-of-the-art facilities that will provide additional spaces for performances, practicing, dining, socializing and education.

In North Adams, the Massachusetts Museum of Contemporary Art is poised to become the largest museum of its genre. A new building will add 150,000 square feet to MASS MoCA’s already enormous capacity, almost doubling the museum’s size.

The Jacob’s Pillow dance festival in Becket recently announced a five-year plan to open its facility year-round for choreographer residencies, workshops and collaboration with schools and other cultural institutions.

And even the Mahaiwe Center for the Performing Arts has moved aggressively to offer year-round programming in an effort to attract patrons in what has traditionally been the off-season.

“That was not the case when I came here 10 years ago,” said Klefos, who came to 1Berkshire from a similar position in Arizona.

And Shakespeare and Company has expanded its offerings over the years to include off-season productions and other events to keep its Lenox campus in use year-round.

The growing demand for rooms is also reflected by what the cultural organizations themselves have told The Edge.

“For years, we have received comments from people that it’s very difficult to get rooms on the weekend. Especially, reasonably priced rooms,” said Kim Noltemy, the BSO’s chief operating and communications officer.

“We have some patrons visiting from out of town that have said they had difficulty finding a place nearby Jacob’s Pillow to stay, outside of renting a house or Airbnb,” said Abigail Wood, Jacob’s Pillow’s director of marketing and communications. “However the majority of our out-of-town patrons are either making a day trip from the city, or are second homeowners and have their own place to stay.”

At the Mahaiwe, Executive Director Beryl Jolly reports that, “We do hear requests about where to stay from some of our out-of-town audience members and know how busy the hotels get during some months.”

The Gilded Age Elm Court estate that straddles the Lenox and Stockbridge town line may become an expanded destination hotel and residential complex. Photo: David Scribner

The Gilded Age Elm Court estate that straddles the Lenox and Stockbridge town line may become an expanded destination hotel and residential complex. Photo: David Scribner

In addition to the aforementioned hotel projects by Toole and Mahida, Klefos pointed to other recent lodging additions, including the Hotel on North, a five-star affair on North Street in downtown Pittsfield, as well as three other hotels in Williamstown. In addition, the Redwood Motel in North Adams is expanding from 18 rooms to 47.

Then there is a proposed remake of Elm Court, the Gilded Age estate on the Lenox/Stockbridge line, into a $50-million high-end spa and resort. That controversial project, however, is still tied up in state Land Court.

And of course, earlier this year Hyatt Hotel completed its purchase of Cranwell Spa & Golf Resort for $22 million, only to spend millions more renovating existing facilities and adding 43 rooms to the Cranwell’s existing 105. Also in the works at Cranwell is a new spa and fitness center.

Klefos added that when observers question whether there is demand for more hotel rooms in the Berkshires, they neglect to mention the fact that a number rooms have been lost with the closing of the Magnuson and, more recently, the Williams Inn in Williamstown.

“Everyone’s looking at the additions, but not the reductions,” Klefos said.

Klefos says 1Berkshire research indicates there are about 4,265 hotel rooms in Berkshire County and that over the course of the entire year, the occupancy rate averages about 50 percent.

That explains, in part, why the emphasis is on larger hotels. In order to turn a decent profit, hotels in the Berkshire must be at or near full capacity during the summer to make up for leaner times when the weather turns cold.

Cranwell in Lenox has also planned a residential expansion.

Cranwell in Lenox has also planned a residential expansion.

The largest growth sector in terms of visitors to the area might surprise you. 1Berkshire does intercept surveys every five year. The last one in 2013 showed that, while visitors from the New York City metropolitan region are still in the majority, the number of people coming to the Berkshires from the Boston area is growing the fastest — and they tend to skew a little younger than those from New York.

Klefos says the region is also diversifying. 1Berkshire is quick to point out that the the county’s reputation for outdoor recreation has grown, as many of the region’s ski areas have added everything from zip lines to mountain biking trails to alpine slides.

Berkshire County is also gaining a reputation for its cuisine, as popular farm-to-table restaurants, such as Prairie Whale in Great Barrington, have proliferated and attract a sophisticated clientele with plenty of disposable income.

Kameron Spaulding heads the Lenox Chamber of Commerce, chairs the Lenox Planning Board and is a former reporter and editor for the now-defunct Berkshire Courier. He is convinced the demand exists for more hotel rooms in peak season.

Spaulding noted that on Airbnb, the online hospitality service that allows customers to book rooms in private residences or opt for short-term home rentals, there are 300 listings for Lenox alone. The weekend just before July 4, which occurred on a Tuesday this year, “we were just under 95 percent occupied,” in the Lenox hotels and resorts market, Spaulding said.

“In July and August, they will put up 90 percent numbers,” Spaulding explained. “Then we will settle back into more modest numbers.”

Spaulding agrees with Klefos that Berkshire County is growing its reputation as a destination for recreation. He says tourism groups are heavily investing in promoting recreation. Fully one third of the square footage of the new Lenox Chamber Visitor Center on Housatonic Street is dedicated specifically to outdoor recreation, with destinations and hiking trail and bike maps featured. So summer attracts people interested in recreation or culture — or both, which really tests the hospitality market.

“What you’re seeing is there is an obvious demand for rooms and it isn’t all being met by hotels,” said Spaulding. “In the summer, if you could do a pop-up hotel that you could blow up, you could probably fill it.”

Sheppard, the Williams College economics professor, see services such as Airbnb as playing an important role in the future of the Berkshires’ economy.

“Again, hotels generally hate this source of competitive pressure, but such properties do have the advantage that they can expand seasonally to accommodate pressure during the peak season,” said Sheppard.

At any rate, don’t expect a cease fire in the hotel wars in the Berkshires anytime soon, although Spaulding cautioned that, “When it comes to big chains, we’re maybe getting close to the limit because we’re running out of brands. Once you have one of every brand in the area, growth will be limited almost by necessity.”

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