Posted: 9:42 a.m. Sunday, Nov. 24, 2013

Focus on the Economy Springfield

New Springfield hotel sign of more demand

Clark County businesses are fueling need for additional rooms.

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New Springfield hotel sign of more demand photo
A roadside sign along Interstate 70 alerts motorists to the hotel choices available at the Springfield exit along Leffel Lane. A new hotel soon will be built there. Bill Lackey/Staff

By Matt Sanctis

Staff Writer

SPRINGFIELD —

A new, multi-million dollar Holiday Inn Express is being planned in Springfield, a sign to local economic development officials that increasing business travel is helping fuel a demand for more hotel rooms in Clark County.

Many other communities across the Miami Valley have either seen flat occupancy rates or slight declines, said Chris Schutte, director of marketing and the convention and visitor’s bureau for the Greater Springfield Chamber of Commerce. That has not been the case in Springfield.

A recent report showed occupancy rates for October have risen almost 19 percent percent compared to the same month last year. Occupancy rates for the year rose more than 12 percent compared to 2012.

Much of that demand is generated by area businesses who bring workers into the city for training, Schutte said. The chamber has also increasingly focused on attracting conferences and conventions to Clark County, recognizing the travel industry means about $326 million to the region’s economy.

A planned three-story, 83-room Holiday Inn Express at 204 Raydo Circle along Leffel Lane is one sign that investors are paying attention to improving revenue and occupancy rates in Springfield, Schutte said.

“I think there are hoteliers now that see a pretty wide door swinging open,” Schutte said. “They’re looking at the same reports we are, and it’s adding up to the same thing for them.”

The new hotel could be open as early as next summer and will include a business center, a fitness center and an indoor pool, said Sajid Chaudhry, president and CEO of the Indiana Hospitality Group. The company operates about 10 hotels, mostly in Indiana and Michigan.

The hotel will cater mostly to corporate clients, Chaudhry said, along with some families traveling for leisure and potentially government workers on business. The Holiday Inn previously operated a Holidome hotel several years ago. The new hotel being proposed would re-establish the brand in the region, Chaudhry said. The site was chosen because of its easy access to the interstate, local businesses and universities.

“The Holiday Inn Express is a good midscale brand, and it would be a good fit for the Springfield market,” Chaudhry said.

Final building permit plans have not yet been submitted for the hotel, said Bryan Heck, planning and zoning administrator for Springfield. But he said the area is properly zoned, and several other hotels are in the vicinity.

“I think it shows that typically hotel developers are looking at the number of rooms that are currently provided in a community, the number of beds and what those occupancy rates are on a nightly basis,” Heck said. “This developer must have felt that there’s a need for additional hotel rooms in our community.”

The investment needed to build the hotel is not yet clear, Chaudhry said. City documents show the construction value for the foundation and some other initial site work was valued at about $1.7 million.

Typically, it costs between $10 and $15 million to build a new hotel, said Matt MacLaren, executive director of the Ohio Hotel and Lodging Association. Not all cities are faring as well as Springfield, he said, but pent-up demand and loosening credit markets have led investors to build dozens of new hotels across Ohio this year. High-end and boutique hotels are popping up in Ohio’s largest cities, and a natural gas boom in the southeastern part of the state has led to demand for lodging for workers in that industry.

Previously leery lenders are also more willing to take a risk on a new hotel as the economy improves.

“There’s pent-up demand,” MacLaren said. “Over the last couple of years, things have gotten better and the demand for hotel rooms rose. But this year is the first time that a lot of companies that have been trying to build a new hotel were able to get the financing to do so.”

The corridor near Ohio 72 and I-70 where the new Holiday Inn Express will stand is one of a handful of locations where there’s likely to be demand for more lodging, said Michael McDorman, president of the Greater Springfield Chamber of Commerce. Other areas include Bechtle Avenue and downtown Springfield.

Clark County Fairgrounds officials also have said they would like a hotel on their site at I-70 and Ohio 41.

Regions like Clark County have historically faced a decline in lodging during the week, McDorman said. But a strategy to attract more regional conferences and encourage businesses to bring workers to Clark County for training has helped turn a former weakness into a strength.

“With the attraction of new companies and the growth and expansion of existing companies, you’re seeing more opportunities for people to come to Springfield to visit those companies, whether it’s training or whether it’s simply a business opportunity,” McDorman said. “That has taken a valley and increased it to where the hotels are very stable here and, in fact, some of them are at capacity.”

Weekday occupancy rates have risen about 16 percent compared to last year, Schutte said. Revenue Per Available Room, a metric used by the hotel industry to measure how well hotels are able to fill rooms and make a profit, has increased as well.

“That’s where you’re really seeing that uptick, and I think that strategically over the next few years that’s something as a community that we will have to look at and see how we can grow that business,” Schutte said. “How can we add more hotel rooms to accommodate more of that type of business?”

The visitor’s bureau has tried to attract businesses and conferences to meet in Springfield based on location, access to highways and amenities, and cost, Schutte said.

“While we’re not much different in terms of location and access from, let’s say Columbus, an association or business organization can stage a conference here for a fraction of the cost they can do it in Columbus,” Schutte said. “We’re really starting to promote that affordability more, and we feel like that is going to be the place where we can really grow.”

Several Springfield locations, including the Fairfield Inn, Red Roof Inn and Hampton Inn have also made significant renovations within the past year, Schutte said.

The Fairfield Inn, 1870 W. 1st St., recently completed a complete makeover of the business’ interior and was still completing work on the exterior last week. Among the improvements made since February, the business has added a larger breakfast area, a fitness center and a guest laundry to cater to long-term business travelers, said Briana Baer, general manager of the facility.

Eventually, the site will host a grand re-opening as the Fairfield Inn and Suites.

“Everything top to bottom is entirely new,” Baer said.

It’s one other sign those companies are expecting business to improve long-term, Schutte said.

“A lot of these owners have committed to putting substantial dollars into their properties, and we feel like that’s a real vote of confidence,” Schutte said. “They would not be doing that unless they knew it was going to come back to them.”

 
 

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