Indian Springs Resort and Spa in Calistoga is planning a 13-acre expansion that would add a two-story, 96-room hotel, a rooftop bar and more than 5,000 square feet of retail space, with owner Danny Merchant eyeing a 2028 opening. The resort, which draws on the same geothermal springs that have attracted visitors to the area for thousands of years, last saw a major facelift about a dozen years ago.
Merchant, who owns Indian Springs Resort, declined to disclose the project's total cost, as reported by The Napa Valley Register. He predicted the lodging improvements would not trigger a major price increase, and the Merchant family says it aims to cap room rates in line with current pricing, though the resort has not set future rates. Existing rooms currently run $700 per night, while bungalow rentals cost $2,500.
The expansion plan calls for off-street parking for 233 vehicles and a dedicated emergency access road, alongside the new hotel wing. Merchant said the resort is also expanding its event space because the demand already exists, aiming to boost capacity for gatherings including large weddings. Indian Springs currently accommodates event groups of 60 to 90 people, and a new event structure is designed to more than double that capacity, with a 500-square-foot reception building also planned.
A Family Business Rooted in Calistoga's Hot Springs
The resort traces back to land the Wappo people inhabited more than 8,000 years ago, and which Spanish settlers later named Agua Caliente, meaning hot water. The Pacheteau family operated the property beginning in 1905 before transferring ownership to the Merchants. John and Pat Merchant bought the property in 1988, and the family later bought the adjacent Nance's Spa and Hotel in 2004. John Merchant died in 2020.
Danny Merchant said he grew up in the area and views Indian Springs as special to many people, adding that the family is investing in what it believes in. He said the project is meant to enhance rather than reinvent the resort, preserving its historic style. The grounds still feature 150-year-old olive trees that Merchant said were planted by William Randolph Hearst in Palermo, and the resort's geothermal well heats its 65-foot circular pool to between 85 and 100 degrees Fahrenheit depending on the season.
New Bungalows and Family-Friendly Touches
Under the 2027 timeline described in the plan, Indian Springs intends to add nine 1,200-square-foot two-bedroom bungalows along with eight additional buildings of eight units each, totaling 4,300 square feet. Merchant said the bungalows are popular with families, and the resort plans to locate an herb garden near the children's play area and chicken coops already on site.
Longtime visitor Maggie Kilkenny, who began coming to Indian Springs in 1973, recently visited with a family group of 15 people. The resort has installed 800 feet of bike paths in front of the property, which sits along the planned route of the Napa Valley Vine Trail, a 47-mile paved bicycle and pedestrian corridor intended to connect Calistoga to the Vallejo ferry terminal.
Construction Challenges and Civic Reaction
Santa Rosa-based Wright Contracting is handling construction and used mat slab foundations because of the area's high water table, according to Duncan Young, a principal and preconstruction manager at the firm. Resort officials say Indian Springs currently runs at about 70% occupancy.
Calistoga City Councilmember Kevin Eisenberg said Indian Springs fits into the town's broader push toward diversified tourism. Tourism remains central to Calistoga's finances: tourism occupancy tax brought in $6.4 million in fiscal year 2019, up from $5.8 million the year before and representing 85% growth since 2011, according to The Napa Valley Register's tourism reporting, which also found that figure accounted for 54% of the city's budget. At the time, Calistoga had 753 hotel rooms not counting vacation rentals, while Napa County's average hotel rate had climbed to $327 per night.
A Separate Approval Down the Street
Indian Springs' expansion is not the only hotel project moving through Calistoga's pipeline. The city's Planning Commission separately approved a different development known as the Veranda Hotel at the Gliderport property, on seven acres at the corner of Lincoln Avenue and Fair Way, with Chair Paul Coates abstaining from the vote, according to a report from the Register. That plan, scaled down from an original 176-room, three-story proposal, now calls for a two-story, 96-room hotel with a restaurant and bar, rooftop lounge, two geothermal pools and roughly 5,200 square feet of ground-floor retail, also with parking for 233 vehicles. It would require demolishing seven existing structures, including Calistoga's only laundromat, with the commission requiring a replacement laundromat to open before the old one comes down. M-Group's project records note that version of the project was originally approved by the Calistoga City Council in 2020, and CEQAnet lists a Notice of Determination for a Mitigated Negative Declaration covering the hotel expansion, restaurant and related improvements.
The broader North Bay hotel market has kept building even as conditions cool: Napa County had 30 hotels totaling 2,950 rooms in its planning pipeline and seven hotels with 695 rooms under construction at midyear 2026, according to The Press Democrat. The county's two largest active projects were listed as the 161-room Kohl's Plaza redevelopment in Napa and the 129-room Rosewood Calistoga, even as hotel openings statewide fell 42% in the first half of 2026 compared with the same period a year earlier.
