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Thread: Economic impact of a hotel in a small town or rural community

  1. #1
    Super Moderator luckless pedestrian's avatar
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    Economic impact of a hotel in a small town or rural community

    Has anyone done, or had done, or seen an economic impact study of a hotel going into a small tow or rural area?

    My town is 5,000 in winter and 20,000 in the summer - but the increase in population is camps, campsites (RV mostly) and maybe 100 hotel rooms in under utilized independently owned hotels.

    We had a feasibility study to bring a hotel to the town and the result was we could recruit a 75 room hotel - but we need to peddle this to the people of the town and we wanted an indicator of economic impact from this use

    thanks for any help you can provide!

  2. #2
    Cyburbian dvdneal's avatar
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    Quote Originally posted by luckless pedestrian View post
    Has anyone done, or had done, or seen an economic impact study of a hotel going into a small tow or rural area?

    My town is 5,000 in winter and 20,000 in the summer - but the increase in population is camps, campsites (RV mostly) and maybe 100 hotel rooms in under utilized independently owned hotels.

    We had a feasibility study to bring a hotel to the town and the result was we could recruit a 75 room hotel - but we need to peddle this to the people of the town and we wanted an indicator of economic impact from this use

    thanks for any help you can provide!
    I don't have anything specific, but you might want to look around Las Vegas. They have a lot of metrics on hotels somewhere. Then again the big city aspect might not work out.
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    Cyburbian Cardinal's avatar
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    I did one for a hotel in Pennsylvania, as part of a much larger study of the impacts of a proposed commercial development project. This may give you a quick and dirty means of assessing it. From the summary:

    Hotel
    In 2007, according to the Pennsylvania Department of Tourism, the hotel industry in Pennsylvania recorded a revenue per available room (RevPAR) of $74. Assuming that the proposed 105-room hotel achieves this rate, and given a total of 38,325 room-nights, the property may be projected to have annual sales of $2,836,000. Three-quarters of all hotels employed fewer than 20 workers, and 55 percent employed fewer than 10 workers in 2007. The proposed hotel is likely to have about 15 employees. Average hotel employee earnings were $12.92 per hour in September of 2008, and the typical employee worked 31.3 hours. About 40 percent of the workforce is employed part-time. One in five hotel workers is under 25 years old. Data on 2007 wages for the largest employment categories in the lodging industry is provided below.

    Wages for the Largest Categories of Employment in the Lodging Industry

    Job Title Total Employment Mean Hourly Wage Mean Annual Wage
    Maids and housekeeping cleaners 428,530 $9.04 $18,810
    Hotel, motel, and resort desk clerks 211,720 $9.62 $20,020
    Waiters and waitresses 137,030 $10.49 $21,820
    First line supervisors / managers of housekeeping and janitorial workers 30,180 $14.51 $30,180
    Lodging managers 29,080 $24.16 $50,250
    Source: US Bureau of Labor statistics
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  4. #4
    Cyburbian Doberman's avatar
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    One of the county towns I plan for is considering the same thing.

    I believe our situation is even more precarious than yours. This town is roughly 6000 with half of which being university students. I would imagine that we have the opposite effect here with students leaving for home in the summer. The problem I see is that the town is not on the interstate or any major corridor. Geographically it's adjacent to the last suburb which means most would opt to stay there along the interstate where there is more retail, restaurants, and better transportation. You would also be looking at a hour 30 minute commute into the city if you were staying for business.

    The only draw I see is traveling sports teams.
    Men's athletics include: baseball, basketball, soccer, golf and cross-country.

    Women's athletics include: basketball, soccer, golf, cross-country, tennis, volleyball and track and field.

    Without the large squad and staff of a football team coming into town I don't see the hotel ever being at capacity.

    The only other attraction the town has is a nearby small lake and a horse track.

    Given that it's a liberal arts university, situated in a small rural town, I would think that a lodge style accommodation would fit more into the culture of the city, demand, and scale. As we are exploring this currently, I would like to get people's thoughts on the pros/cons of both and if this is a good idea.

  5. #5
    Cyburbian Plus
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    Off-topic:
    Quote Originally posted by luckless pedestrian View post
    ...we need to peddle this to the people of the town and we wanted an indicator of economic impact from this use.
    Will the people of the town also want to see indicators of environmental impact?

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    Cyburbian Doohickie's avatar
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    Cyburbian Hawkeye66's avatar
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    One of the towns I worked for as a contractor had brought in a hotel, they are about 5,000 people and don't have a college. I am not real sure its viable in the long run. There is an old motel in town also. The city has a state highway going through it.

    Some of these places have done things like opening the indoor pool to the public for a fee on certain days. Our town is small and one wouldn't work here. A B&B might be nice.

  8. #8
    Super Moderator luckless pedestrian's avatar
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    we have a b & b that is consistently overbooked

    we don't have a college but we have:

    a ski area that only has about 35 rooms to rent in a lodge-like environment
    3 major lakes all with public boat and beach access
    a recreational park large enough for statewide baseball/softball or soccer tournaments
    a prep school (13th year only) that grooms boys for college sports (so lots of games)
    5 residential camps on lakes for affluent children
    closest hotels are 30 minutes away

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    Cyburbian Hawkeye66's avatar
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    The town I was talking about gave the hotel all sorts of incentives. Free hookups to water and sewer and a up front cash payment that the city is re-couping with TIF. I would not have done that deal.

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