Two hotel chains have selected Redmond as their site for expansion, adding much-needed hotel rooms near the Deschutes County Fair and Expo Center and Central Oregon’s commercial-service airport.

Area hotels already operate at occupancy rates above the national average of 66 percent and range from as high as 89 percent occupancy in the summer to below 48 percent in the winter, according to data provided by STR, a global hotel industry data firm. The hotels are being developed by Heritage Hospitality Group, which is represented by NAI Cascade, a Bend commercial real estate firm.

Heritage Hospitality approached the city about development through its agent, and no subsidies were given, Keith Witcosky, Redmond city manager said Tuesday.

“We didn’t subsidize them at all,” Witcosky said. “It is a sign that the market is there for hotel development.”

More hotels mean more transient room taxes, a source of revenue for the city, Mayor George Endicott said Tuesday. That’s something Endicott is proud of as Redmond continues to grow and become attractive to businesses.

Recently Redmond Airport announced an additional daily flight to Los Angeles, and come June, Alaska Airlines will fly 737s on its Seattle-to-Redmond route, he said. Unemployment is at 4.5 percent, and industrial space for lease is in short supply in the city, Endicott said.

“It’s all good news for us,” he said.

What makes the numbers pan out for developers is that room rates in Redmond have grown steadily over the past four years, said Jan Freitag, STR senior vice president. Last year Redmond room rates grew at 4.4 percent, and in 2015 room rates grew by nearly 10 percent, he said. The area already hosts 10 hotels.

“It seems the developers are making a bet that they can run these hotels well with high occupancy in the summer and make it work in the winter,” said Freitag. “Overall it could be a good investment for them. The Redmond area is selling seven out of every 10 rooms each night on average.”

Limited lodging options have always been a challenge when trying sell the Deschutes County Fair & Expo Center, said Roxia Thornton Todoroff, the director of sales and marketing at the expo center.

“The lack of hotel rooms attached or adjacent to our center has limited our ability to submit bids to host conferences,” Thornton Todoroff said. “Not only will the addition of these new properties benefit Deschutes Fair and Expo, but will also drive a huge economic impact to Central Oregon.”

Walt Ramage, a broker at NAI Cascades, said he hopes the permits will be issued by midsummer with a 2019 opening for the two hotels. The developer is also building a Home2 Suites by Hilton on the east side of Bend on 27th Street, he said.

In Redmond, the developer purchased the 4-acre parcel where the hotels will be built. A contractor has not been selected yet, Ramage said

“We’re really seeing the growth in the Redmond community,” Ramage said. “The airport, proximity to the expo center and the ease of working with the city of Redmond, that’s a testament to what’s happening in Redmond.

“People are starting to see it. Redmond is steering their own ship, if you will.”

Deborah McMahon, a Redmond city planner, estimated it will take up to 60 days for the approval process because of the scope of the development.

“The entire area is growing,” McMahon said. “We need more choices like this. It’s a great location, next to the airport and the expo center.”

— Reporter: 541-633-2117, sroig@bendbulletin.com