RREAF and Innisfree Hotels plan $110M Galveston resort

A 14-story hotel is coming to Galveston.

Dallas-based RREAF Holdings and Florida-based Innisfree Hotels are jointly developing the $110 million, 334-key project at 317 East Beach Drive under the name RREAF Grand Beach Development, according to a recent filing with the Texas Department of Licensing and Regulation.

The cost listed in the filing works out to about $329,000 per room.

Construction is set to begin later this month and be complete in 2025.
The project, dubbed Galveston Resort, will feature a pool and amenity deck, restaurant, family entertainment center and conference center. It will have direct access to one of the city’s only alcohol-permitted beaches, East Beach. The Galveston Resort will occupy 300,000 square feet, making it one of the largest developments in eastern Galveston.

Innisfree Holdings manages more than 24 hotels and resorts nationwide, mostly in Florida. RREAF had amassed over $3 billion in assets across 57 properties emphasizing hospitality projects and multifamily developments in the Southwest region.

The Galveston resort won’t be the pair’s first partnership. The duo previously developed the Beachside Resort Panama City in Florida, which opened in 2012. RREAF Holdings has also acquired additional Innisfree beachfront projects, such as Cocoa Beach Resort and Bikini Beach Hotel.

Gensler is listed as the design firm. A spokesperson for RREAF Holdings did not immediately respond to a request for comment.

The Houston area’s hospitality market is gradually recovering from the impact of the COVID-19 pandemic, with higher average daily rates and revenue per available room, increasing by seven percent and two percent, respectively, according to an analysis by the Houston Business Journals of STR data. However, occupancy rates remain four percent lower than pre-pandemic levels in the Bayou City. While luxury properties still remain popular, with rising room rates and strong occupancies, less expensive options trail their pre-pandemic averages.

The Galveston Resort project is the latest in a series of investments in the beach city’s hospitality and resort market. Galveston sees upwards of 7 million tourists per year, according to the city’s website, being one of the Houston area’s largest sites for new hospitality developments. It also ranks as the nation’s fourth largest cruise port. Miami-based cruise company Royal Caribbean International opened a $125 million terminal on Pier 10 off the Port of Galveston in November, and the city is set to become the fourth home of Switzerland-based cruise line MSC Cruises.