The Sanford Airport Authority (SAA) should decide in December how to move forward with bringing a hotel to property near the entrance to Orlando Sanford International Airport, after it terminated a contract earlier this year with a private developer for failure to perform.
The primary questions facing SAA are whether to lease airport property to a private-sector hospitality developer/operator, build the hotel itself while partnering with a management company, or create a hybrid model of the two approaches.
Whatever its decision, SAA is expected to move fast. With six years of double-digit growth in passenger traffic and the Bombay Sports Complex (located adjacent to the airport) generating more than 40,000 room nights in the past year, board members are adamant that the authority be the first to develop a hotel.
"There's tremendous value in being first," out-going SAA Chairman Frank Ioppolo told GrowthSpotter. "Being the first to plant the flag gives the airport a head start on anyone else who wants to develop a hotel, and allows us to control our own destiny."
Another reason SAA wants to move quickly is it's now armed with much more data about the viability of a hotel, thanks to an analysis done by a team comprised of Beacon Bay Project Management of Winter Park, Brush & Company of Miami, and The Litt Group of Boca Raton.
Jay Litt, founder of The Litt Group, told board members on Tuesday that the airport should look to attract a 120-room, full-service upper mid-scale to upscale hotel which includes brands like Best Western Plus, Hyatt, Fairfield Inn, Doubletree and Holiday Inn.
"Airports with growth like Sanford's need hotels," Litt said. "You have a growing commercial and leisure market, as well as new group business because of the sports complex right next door to you."
In addition, Litt noted that Allegiant Airlines will soon open it's east coast training facility, creating more demand.
The report submitted to SAA estimates that within three years of opening a hotel 30 percent of demand would come from airline passengers, 30 percent from visitors to the sports complex and 50 percent from airline training crews.
Other highlights of the report include:
-- In the past seven years, only 120 hotel rooms have been added in Seminole County (a Townplace Suites hotel in Altamonte Springs);
-- Of the Seminole County hotel rooms inventory, 40 percent are classified as economy;
-- The competition for an airport hotel is located at least five miles from airport property, a key point for airline crews. "They want to be on airport property, rather than some off-site hotel," Litt said;
-- By year five of operation, an airport hotel is projected to have 79 percent occupancy, with a room rate of $112 to $116 (in 2017 dollars) and Revenue Per Available Room (RevPAR) of $104 to $108;
-- A hotel needs to be located near the airport's entrance.
To the final point, SAA's focus for a hotel has mostly centered on property next to Lake Golden on Airport Boulevard, despite the main entrance being Red Cleveland Boulevard.
The preferred site, according to the report, is a 3.5-acre parcel located at the southeast corner of Red Cleveland and Marquette Avenue. The site is about a quarter mile from the terminal building, and roughly 0.5 miles from the sports complex.
For more than a decade, SAA has tried to attract a hotel to airport property. Plans first created in 2004 nearly came to fruition in 2007, but fizzled as the economy began to falter.
Three years ago, a deal was reached with SOIA Hospitality LLC, which planned to build a Hampton Inn at Lake Golden. The SAA twice extended deadlines for SOIA but ultimately terminated its contract when the developer failed to respond to requests for updates.