A 32-story tower is under construction in downtown Austin that will add two new hotels to downtown’s booming hospitality market, along with 274 apartments.
The $170 million project carries a distinction for Austin: its developer says the building is the first in the city to use an artificial intelligence technology called indus.ai in the construction process.
The tower, called Fifth & Brazos after its address, is being developed by Chicago-based Magellan Development Group and Ryan Companies, and was designed by bKL Architecture.
The Austin high-rise will have 400 hotel rooms and 13,000 square feet of ground-floor retail space, Magellan said. It broke ground in November and is expected to be completed in late 2020.
In addition to studio, one and two bedroom apartments, the tower will have about 8,000 square feet of first-floor retail space.
The hotel brands will be a Thompson Hotel and a tommie Hotel, both concepts by Two Roads Hospitality, an international hotel management company. Hyatt Hotels Corp. acquired Two Roads Hospitality and its portfolio of brands in November.
Thompson is a luxury boutique concept that has locations in New York, Nashville, Seattle, Toronto, Chicago and Mexico, with others in the pipeline for Dallas and Houston. Thompson San Antonio broke ground in February 2018 and is due to open in late 2020.
The other brand, tommie -- styled with a lower-case “t” -- is billed as a “micro-lifestyle hotel.” Its flagship property, tommie Hollywood, will debut in early 2020, followed by the opening of tommie Austin that same year, said Karolina Kielbowicz, a Hyatt spokeswoman.
The hotels will have dining and beverage venues, lounges and a fitness center, according to Magellan’s website. Apartment residents will have access to the hotel amenities, but there also will be amenities for apartment residents only.
The tower’s construction marks the advent of a new technology to the Austin construction scene. Indus.ai, a construction intelligence platform, uses strategically placed live cameras around the job site to capture data and monitor activities— from the arrival and departure of trucks to how fast workers are laying bricks, said Matt Mann, co-founder of indus.ai. The data is fed into an artificial intelligence engine and used to help the general contractor take any corrective action or other measures.
For example, the technology can detect if any potential risks and safety hazards are occurring, such as workers not wearing hardhats or protective gear, and identify how to correct them if so. It can also can track the progress of the project to flag any delays, streamline construction and boost productivity, Mann said.
Mann said 32 sites project around the country currently are using the indus.ai platform, compared with less than a handful just six months ago.
“Use of artificial intelligence to enhance the execution of construction projects is quickly catching on and becoming increasingly the solution of preference for general contractors and developers,” Mann said.
Once built, the hotels should see healthy demand, said Patrick McCaslin, founder and chief operating officer of McCaslin Hospitality Consulting.
“The Thompson Hotel is a high-end boutique brand that will be an excellent fit for downtown Austin and I’m excited to learn more about the tommie brand as it develops,” McCaslin said.
Though demand for boutique hotels in downtown Austin is strong, McCaslin said there will be a lot of competition in the boutique hotel space over the next few years, with several new boutique hotels currently under construction.
In general, “hotel demand in downtown Austin has remained very strong despite the large increase in new hotel supply,” McCaslin said. With the new Fairmont having added more than 1,000 rooms, downtown Austin ended 2018 with an average hotel occupancy rate of about 75 percent, down only 2.3 percentage points year-over-year, he said. Average daily room rates increased slightly last year, rising 1.6 percent to $224, McCaslin said.
“The impact from new hotels has been small so far but there are another 1,000-plus hotel rooms planned in both 2019 and 2020,” McCaslin said.