'It has elevated the city': Hotel Carmichael eyes expansion, claims big wins

CARMEL, Ind. — The luxury Hotel Carmichael, derided in the past for its expensive amenities such as a $134,000 self-playing grand piano, is a smashing economic and critical success, city and hotel officials said this week.

For the first time since its 2020 opening, officials released financial data, which shows the $58 million hotel in Midtown has exceeded occupancy and revenue projections, despite a slow start during the Coronavirus pandemic, and is considering expanding as a result.

“People throughout the country and even the world love the hotel, the City Center and Carmel and come back year after year,” said Bruce Cordingley president and CEO of Carmel-based Pedcor, the developer that co-owns the Carmichael alongside the city, told the city council this week. “There is growth opportunity.”

Pedcor will explore making 33 luxury apartment suites being built at the Wren building next door part of the Carmichael, which would increase the number of rooms to 155.

Cordingley said 122 rooms are not enough to meet demands of the high-end business travelers, celebrities, weekend weddings, curious day trippers and stay-cationers who want a taste of the good life.

“The 122 rooms was the minimum,” number to be profitable, Cordingley said. “There are events, conventions and business meetings that the hotel is now turning down that we do not have capacity for. This will add to that capacity and create more business opportunities here in Carmel.”

The developer could fund the expansion itself but is open to taking on the city as a partner if it's interested. No decision has been made and no plans submitted.

Exceeds expectations

Despite a lackluster first-year occupancy of 39%, officials claim business rebounded as the pandemic waned to an occupancy level of 80.7% in 2023, beating internal projections of 77%, said Laurie Siler, Pedcor senior vice president.

That compares to an occupancy rate of 62% for hotels on the north side of Indianapolis and for other upscale hotels.

Revenues rose from $1.9 million in the COVID-19 first year to $16.5 million in 2023, an increase of 48.7% over projections.

Cordingley said the popularity of the first-floor businesses — Vivante Restaurant & Bar, Feinstein's and Adagio Lounge Bar – have helped the bottom line.

“Adagio went somewhere we never expected it to go,” Cordingley said. “It is very much a happening place.”

The financial data was released at the insistence of newly elected Mayor Sue Finkam, though there appears to be no way to confirm it independently. City officials stressed the hotel was not required to make the figures public under terms of the public-private partnership of Pedcor and the Carmel Redevelopment Commission.

“How the hotel has been doing has been a question in the voters’ minds, even though technically that data is not public,” Redevelopment Executive Director Henry Mestetsky told the council. “This isn’t normal, and this does cause some detriment to the hotel operation because no other hotel is walking around blasting all their numbers to the public.”

After Carmichael opened $18.5 million over budget, Finkam, as a city councilor, led a 2021 study that found a “deeply flawed” public process during construction and recommended increased public disclosure by the Redevelopment Commission. Finkam went on to campaign for mayor on a pledge of transparency.

Amenities once questioned

When the hotel project came in over budget critics blamed, in part, its excessive accents, such as the $150,000 in the artwork, $375,580 for 144 chandeliers, a $4,518 area rug and a $4,480 shoe shine stand.

City officials said the fancy amenities were necessary to distinguish the hotel. Siler said it is among the top performers in Marriott's Autograph Collection group of 155 hotels in North America.

Cordingley told the council that the Carmichael might be the swankiest in the state and said the only local peer that comes to mind is the Conrad Indianapolis.

Mestetsky told IndyStar that Carmichael is the boutique destination for celebrities and was the secret headquarters for the NCAA Selection Sunday committee when they announced the teams for the college basketball March Madness tournament.

“It has elevated the city and is the place where celebrities stay,” he said. “You will find people lined up outside waiting to get autographs.”

Councilor Adam Aasen asked at the council meeting whether the Carmichael was "cannibalizing" customers from other hotels. Cordingley said it wasn't because its rates are so much higher that it draws a completely separate customer.

Among them are Carmel residents who want to splurge, he said.

“We have people who will drive 5 miles to stay at the hotel,” he said. “They won't do that for any other hotel.”

Rooms can be as high as $1,198 a night for an executive suite and $1,898 for a presidential suite. Many are in the $400 range with some as low as $209 a night, according to a peruse of the hotel's website.

One goal of the hotel was to entice high-end travelers and corporate executives, with business in Carmel to stay in Carmel. But the hotel is now nabbing travelers who have business in Indianapolis, as well, Cordingley said.

The city could sell its interest in the hotel to Pedcor, but Cordingley said now would not be a good time because of market conditions and interest rates.

“If I want to buy you out I want to maximize my investment,” he said.

Mestetsky said there has been no consideration of the city divesting soon.

Call IndyStar reporter John Tuohy at 317-444-6418 or email him at john.tuohy@indystar.com. Follow him on Facebook and X/Twitter.

This article originally appeared on Indianapolis Star: Carmel's luxurious Hotel Carmichael eyes expansion: 'It has elevated the city'