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As Buffalo awaits the opening of two Marriott hotels, a Hilton Garden Inn, and a few other planned lodging establishments, the older hotels – longtime fixtures in downtown Buffalo – are girding for a fight over who will house the city’s visitors.

Buffalo’s hotel capacity is getting an extreme makeover, with developers building hundreds of swanky new rooms downtown. That has caused the operators of existing hotels to examine their own offerings and make sure they’re up to snuff.

The established downtown hotel owners say they’re confident of the quality and reputations of the hotels they run. And they’re optimistic about Buffalo’s new growth prospects – especially the potential for Canalside and the medical campus to bring more tourists and business travelers to the city.

“We’re very excited,” said Jay Dellavecchia, general manager of the Hyatt Regency Buffalo, which marks its 30th anniversary next month. “I’m probably more excited for the city overall, because it’s really going to change Buffalo and the perception that people have of Buffalo.”

Nevertheless, many are worried that increased demand won’t be enough for the flood of new rooms coming online in the next year or two.

For the entire Buffalo market, the occupancy rate for hotels throughout the region averaged 65 percent for all of 2013, down slightly from 2012, with the winter months of December and January hovering below 50 percent, according to data from Smith Travel Research, of Hendersonville, Tenn., known as STR.

“There’s only a finite demand in Buffalo, so every new room will diminish the overall occupancy of the other hotels,” said Ronald B. Kendall, president of Buffalo Lodging Associates LLC, the Stoughton, Mass.-based division of Benderson Development Co. that owns 40 hotels, including the 140-room Hampton Inn & Suites Buffalo-Downtown on Delaware Avenue. “It’s always difficult to overcome more inventory in a market that doesn’t need any more.”

Buffalo-area hotels generated nearly $302 million in revenues last year, or $62.58 per room, the highest in at least seven years, according to STR.

“Anytime there’s new supply, you’re going to lose some market share, so it’s going to damage it further,” said Minesh Patel, chief financial officer for Corning-based Visions Hotels LLC. The company owns both the 486-room Adam’s Mark Hotel and the 146-room Comfort Suites Downtown – both of which already lag a measure of their peers’ performance by at least 10 points, Patel said.

In response, Buffalo’s long-standing hotels are investing heavily in upgrades and renovations – in some cases from top to bottom.

“We recognize that we’ve got competition. There is no future in us not being a first-class hotel, being maintained in a way that’s above every other hotel being built,” said Paul L. Snyder Sr., chairman of Snyder Corp., which built and owns the Hyatt Regency in the Theatre District near the Buffalo Convention Center.

New competition

The surge in downtown hotel activity in the past three years is a radical change for a city long characterized by just a handful of older options that at times have been described as “tired.”

Besides the Embassy Suites at the Avant, the city’s four other “upper upscale” hotels all opened before March 1984, and half of the upscale hotels predate 2000, according to STR. The city’s two dominant full-service hotels – the Adam’s Mark and the Hyatt – have each been in existence for decades.

But that’s changing with the current building boom downtown. State and local government, together with many local developers, are pouring billions of dollars into a host of redevelopment projects. Much of the attention is focused on the waterfront and the Buffalo Niagara Medical Campus, and that has spurred significant activity in surrounding areas, with developers reviving older buildings that sat neglected for years. Many of these efforts are incorporating hotels as part of mixed-use initiatives – although they’re mostly “limited-service” hotels.

One of the first was Uniland Development Co.’s conversion of the former Dulski Federal Office Building into the Avant, complete with the 182-room Embassy Suites hotel that occupies eight floors, with four restaurants and bars. That was followed by Rocco Termini’s painstaking renovation of the neglected Lafayette Hotel into the Hotel@The Lafayette – with 57 guest rooms – restoring the glamour of the century-old high-end hotel designed by architect Louise Bethune.

More recently, Benderson Development Co. is finishing a 96-room Courtyard by Marriott hotel in the lower half of its One Canalside conversion of the former Donovan State Office Building, while the Sabres are building the new full-scale 205-room Marriott Buffalo HarborCenter Hotel in their hockey and entertainment project across from the First Niagara Center.

Additionally, Hamister Group bought the Tishman Building on Lafayette Square and is converting it into its headquarters and a 116-room Hilton Garden Inn. Uniland has approval to build a 12-story office and hotel tower at 250 Delaware Ave. at Chippewa Street, with 120 guest rooms. And Carl Paladino plans a 138-room hotel as part of his Carlo project beside the Erie Basin Marina.

That’s 900 additional rooms, all in downtown Buffalo, and that doesn’t include projects that are still in the works. Krog Corp. is discussing plans for an all-suites hotel on the medical campus, and Mark Croce is talking about a boutique hotel with 68 rooms in his Curtiss Building on Franklin Street – not to mention the potential future revival of the Statler that he now owns.

Renovation boom

In the meantime, the existing hotels are upgrading. The Hyatt Regency, which was built in the former Genesee Building using federal and city funds in 1982, invested $16.3 million in significant renovations in 2009 and 2010 that helped to boost its occupancy and overall business. Last year, over 500,000 guests stayed at the hotel.

The guest rooms, corridors, function and meeting space, elevators, restaurants and lounge were all upgraded, with the hotel even adding backlit murals of Buffalo in the early 1900s inside the elevator cabs. “We wanted to bring the culture and history of Buffalo into the hotel and into the cabs,” Dellavecchia said.

The hotel has a full-service spa, a concierge on duty, and a new “women’s experience floor” fully dedicated to female travelers. It replaced and upgraded all of its banquet china, glassware and silverware, which is now personalized with the hotel’s name, in anticipation of new catering competition from the Statler and Lafayette. And it retrained its staff.

Upcoming plans call for expanding the hotel lounge, with a new look and 35 new seats. Designers and architects are also working on a complete makeover of the hotel’s Main Street entrance, to appeal to those who live and work downtown now that its portion of the street is being revived and car traffic will be returning.

“We’re spending several million dollars over the next couple of years to do all sorts of things to take this hotel to a new level,” Snyder said. “We’re going to be very competitive. Hopefully the other hotels being built will make this city more desirable to people coming to visit, and that’s what we all want.”

At the Adam’s Mark, Visions invested about $2 million two years ago, renovating the lobby, restaurant, bar and other public spaces, and rebranding the restaurant as the Harbor Bar & Bistro. The hotel also benefits from having its own convention space, totaling 72,000 square feet – more than twice what any other hotel in the region has.

Patel said the company also created three new executive floors with “all new finishes” and made “significant changes” on other floors with new carpeting, soft seating, and window treatments. “We touched all of our guest rooms in one way or another,” he said.

The hotel has now caught the eye of a potential outside buyer – an investor group called Buffalo-Niagara Holdings LLC, based in Ormond Beach, Fla. The group, led by Joseph G. Gillespie, approached Visions and has been negotiating for over six months, though there’s no final agreement yet, Patel said.

And Benderson’s Buffalo Lodging spent $4 million upgrading the Hampton Inn nearly two years ago, including the lobby and second floor, and all the guest rooms and bathrooms. The hotel, with three restaurants, now has a wide variety of room sizes, including some as big as apartments and some with fireplaces and whirlpools or spas, Kendall said.

Kendall acknowledged that Benderson itself is adding competition with the new Courtyard by Marriott, but he said he’s not too worried. “I wouldn’t say we’re insulated, but given the brand, given the condition of the hotel, the quality of the management that runs the hotel, I think we’re in pretty good position there,” Kendall said. “We’ll be fine, but we’ll be less profitable, as will every hotel in the city.”