Part of Center City hotel high-rise to open, hoping for a visitor rebound

The Element by Westin, which will occupy a section of the new high-rise hotel building on 15th Street near City Hall, is scheduled to open next week as Philadelphia’s hospitality businesses wager that easing pandemic restrictions may fuel a summer tourism rebound.

The 460-room Element hotel, a mid-market brand, is to open May 14, nearly six years after crews began construction of the 51-story hotel building that will also accommodate a higher-end W Hotel, the Marriott International subsidiary said in a release this week.

No details were provided on when the 295-room W Hotel section of the building would open. The two hotels, both Marriott brands, will together make the Chestnut Street tower the third-largest hotel property in Center City, after the 1,408-room Marriott Philadelphia Downtown and the 757-room Sheraton Hotel Philadelphia Downtown.

The Element is an “extended-stay” hotel, with rooms that include features such as stove tops and large refrigerators marketed at guests planning stays of more than a few days.

“Our flexible accommodations will open at a time when it’s needed most for leisure and business travelers alike,” said Ed Baten, the Element’s general manager. “We’re proud to offer a centrally located destination [as] travel is slated for a substantial return in tandem with the recovery from the COVID-19 pandemic.”

The Element and W had announced on their websites last year that they planned to open in August 2020. But the newly built tower remained shuttered, as business travel and tourism to the city all but disappeared amid restrictions aimed at stemming the spread of the coronavirus.

Hotel owners whose projects were nearing completion during the pandemic faced a tough choice of whether to put off opening until demand strengthened — thereby saving on staffing and other operational costs — or to begin hosting guests in hopes of earning enough to stay afloat, said Ed Grose, executive director of the Greater Philadelphia Hotel Association.

“It’s whether or not they’re going to lose more money by not opening versus opening with a limited amount of demand,” Grose said.

The 236-room Canopy by Hilton at the historic Stephen Girard Building on 11th Street south of Market Street opened in August 2020, followed in October by the 332-room Hyatt Centric at the former site of a parking garage on Chancellor Street east of Rittenhouse Square that once housed the beloved Little Pete’s restaurant on its ground floor.

The W and Element building’s half-decade construction timeline had been due to issues raised in a January lawsuit by its developer, Conshohocken-based Chestlen Development, against Tutor Perini Building Corp., its contractor at the project, Chestlen owner Brook Lenfest said in a statement.

Chestlen alleges in its $30 million suit that Tutor Perini caused, and in some cases concealed, construction problems that caused delays and cost overruns, the Philadelphia Business Journal has reported.

Tutor Perini has responded with its own suit, alleging that Chestlen failed to pay for completed work, amid other claims, according to the website Law360.

A Chestlen spokesperson had no immediate comment about the decision not to open last August, as planned.

Grose said hotel operators in the city are now generally more optimistic, as vaccination rates rise. Indeed, there are already signs of a recovering market, according to the hospitality-industry tracker STR Inc.

Occupancy at hotels in Philadelphia and the surrounding Pennsylvania and South Jersey counties jumped to 53% during the week ended April 24, up from 26% during the same week a year ago, according to STR.

Revenue per available room, a standard metric used in the hospitality industry to gauge hotel performance, surged 185%, to $55.78 from $19.60, during that time, STR said.

But two years ago ― months before the start of the pandemic — the area’s hotel rooms were 75% full, with revenue per available room at $102.46, according to STR.

Grose said city leaders were hurting the hospitality industry by lagging behind state guidelines and those other surrounding areas in their relaxation of coronavirus restrictions.

The Pennsylvania Department of Health, for example, is permitting restaurants, bars, stores, nightclubs, and other businesses to open at 100% capacity as of May 31, but Philadelphia officials have said they’re still working on the city’s reopening plans.

That makes potential visitors to the state less likely to book stays in Philadelphia, Grose said.

“Once things start opening up, we know people will start traveling again,” he said. “We’re very bullish on people coming back.”