Hospitality Newfoundland and Labrador

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Hotel hopeful - Steele Hotels planning new downtown St. John's development - November 16, 2007

Source: The Telegram
Peter Walsh, pwalsh@thetelegram.com

Newfoundland-based Steele Hotels has started design work on a 50 to 70 room hotel set for west-end Water Street in St. John's, making it the third mid-sized hotel development announced this year for the downtown.

John Steele, president of Steele Hotels, purchased the land several months ago for less than $500,000. Since then, he's had holes drilled in the lot to test its building capacity. He recently hired an architect to begin design work.

"We're just getting preliminary drawings and investigating what we can put there. We're looking at sort of a boutique-type hotel - more of a higher-end property."

Steele owns six hotels in the province: the Capital Hotel in St. John's, the Glynmill Inn in Corner Brook and four hotels in Gander.

Steele says the business climate for hotel development in St. John's is good. He credits strong tourism, mining and oil industries as the reason for his planned expansion. Steele's optimism is due to the Hebron oilfield development. He's also hopeful the province will soon develop a new oil refinery and iron ore processing facility.

The hotel site is across New Gower Street from the Delta Hotel, which is the province's largest hotel.

"Burger King always goes across from McDonald's. But we want more than spillover. We want to be a destination, a primary choice and I think we'll be able to do it in terms of personalized service and amenities."

Steele hasn't applied to the city for approval. He's finalizing his business plan first.

"I want to see the cost of putting something there and whether it works. But we are looking at it."

Last month, Halifax-based Southwest Properties submitted an application to the city to redevelop the former Newfoundland Telephone building on Duckworth Street into a $3.5-million, high-end hotel.

Marriott Hotels has redevelopment plans for the former Woolworth's building on Water Street. It wants to build extended-stay suites, in part to take advantage of an anticipated increase in oil-related travel resulting from the Hebron development.

Steele doesn't think the city's hotel capacity has reached the saturation point yet.

"I think there's room to go. The thing is, you adjust your plan to what the market is, but I think the market can still hold up."