Potential Lodging Projects
Posted: April 26, 2013
The first out of the gate will be the new Holiday Inn on the south side of Eau Claire. But now there's talk of a Hampton Inn possibly being developed near NorthRidge Center near the entrance to Chippewa Falls. There's the likelihood of a hotel on the northeast quadrant of the River Praire development in Altoona by Prairie Lodging,LLC. Neil Haselwander wants to have a motel built near Black Avenue and the freeway; Casey Weiss of LaCrosse includes a hotel on his parcel on the southwest quadrant of River Prairie; and Dave Wogernese has plans to develop a hotel on Commercial Boulevard in Lake Hallie.
The race to build hotels along the Highway 53 Freeway north to the Highway 29 interchange is heating up. But can the area support up to five more lodging properties? I doubt it. In fact, after the Holiday Inn is developed, I would be surprised if more than three of the proposed hotels ever come to fruition.
According to Visit Eau Claire Executive Director Linda John, the occupancy rate in the City of Eau Claire was 51.3 percent last year. Statewide, the occupancy rate is about 54 percent. The only reason room tax revenue went up five percent last year compared to 2011 is because rates went up.
"One positive about the talk of all these hotels is that the Eau Claire-Menomonie market may have some fresh products to offer travelers. But the downside is the new motels would just result in a shift of dollars being spent on lodging," said John, who added that the area would benefit if any of the proposed motels offer something new and different to the area and is able to generate new business.
In my opinion, too many times a new hotel is nothing more than a big box on a parking lot. Although there is some job creation, the wages paid and number of jobs that result from a new motel is fairly insignificant.
There are exceptions, though. The Metropolis/Action City/Chaos Waterpark combination is an example of a tourist destination that can bring people to the region. Likewise, motels that have a niche and cater to a particular clientele can provide added value and have an impact on the local economy.
John said there is an opportunity for a lodging property to come into the region that caters to the youth sports market. But unless someone proposes development of a convention center that would attract large groups of visitors, many of the lodging projects being proposed would offer little more than a good night's rest and hurt existing motel owners.