A brand-new $19 million hotel is coming to downtown Chattanooga.
With 140 rooms and suites, a new Holiday Inn & Suites will rise at 434 Chestnut Street -- in what's now a parking lot at the corner of Broad and Fifth Streets, across from the DoubleTree by Hilton.
The seven-story building will include a restaurant on the ground floor, followed by two stories of parking and four stories of hotel rooms, according to developer Dynamic Group.
The hotel's lobby and conference room will be situated on the ground floor, and Dynamic Group also expects to be able to lease parking spaces out to downtown businesses from 9 a.m. to 5 p.m. during the week.
The hotel joins a crowded downtown market that's grown leaps and bounds over the last decade but has recently started to stall. Supply rose 3.5 percent in 2013 while demand dropped by 2.1 percent, according to Smith Travel Research. The Chattanooga market as a whole includes more than 10,000 hotel rooms.
Bill Mish is in charge of 180 of them at the DoubleTree by Hilton -- just a stone's throw from where the new Holiday Inn & Suites is slated to go up. But he said he's not worried about the increased competition.
"Honestly, we always built toward a niche," he said. "So I don't know that another full-service hotel downtown will necessarily impact us one way or another. Typically the traveling public is very loyal to specific brands."
Mish added that the DoubleTree tends to focus on business travelers and conventions, and is even adding an additional 4,200 square feet of meeting space to the hotel to accommodate demand.
At the state level, Tennessee Hospitality Association president and CEO Greg Adkins said new hotels are a sign that the hotel market is still strong.
"I think it shows that in terms of in Tennessee and in Chattanooga, it's still a strong market," he said. "It's not a weak market by any means. It means more jobs, it's a sign that the economy is getting better. And when the lenders lend money to build these projects, it means there is promise and we're moving in the right direction."
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