Hotel Feasibility Study Supported by the Community

At a May 4 meeting at Harrison City Hall, outgoing city manager Tracey Connelly expected less than a dozen people to attend a focus group meeting as part of the hotel feasibility study undertaken by the City of Harrison and Hayes Township. Connelly and Maye Tessner-Rood, Hayes Township Treasurer, were pleasantly surprised when more than 45 people attended.

A hotel has long been the dream of Tessner-Rood, who has consistently worked toward that goal during her time with Hayes Township. She was told about eight years ago that she is about 10 years ahead of time.

The study is conducted by the Core Distinction Group and funded by the Michigan Economic Development Corp. Representatives were also present from the Michigan Municipal League.

Represented in the room was the Budd Lake Area Association, members of Harrison City Council, DDA and Planning Commission, the Harrison Chamber of Commerce, Harrison Community Schools, the Clare County Agricultural Society, Clare County Transit Corp., elected officials, business owners and citizens.

Jessica Junker, a partner of the Core Distinction Group was impressed with the turnout and the economic development and infrastructure already in place in Harrison.

“Your community leaders seem like they are on top of it and it’s going in the right direction.” Junker said. She explained the purpose and scope of the study.

“I am trying to put all the pieces together to justify the need for a hotel,” she said. “We have to make sure it makes good business sense so that everybody involved can really focus on finding people that want to be involved in the project [and] financing it. Essentially, we are that person in the back telling those people – the investors and banks – that, yes, this a good opportunity; this is a good area to invest in; this is a good project.”

To get to that “yes” recommendation the study must be thorough. Their yes nod could mean a $6 million investment in the building and development of a hotel.

Part of the study is to discover how many hotel nights would be used by local businesses, agencies, events, and reasons for other stays that could equal room nights. Target occupancy is 50% for a return on investment beyond the break-even point. A hotel cannot be sustained by several large events a year.

A survey was recently sent to many businesses and agencies to collect information on how many stays their visitors and business could generate. The feasibility study will also pull occupancy data from hotels in surrounding communities.

Junker was clear that this isn’t a “if we build it, they will come” project. Without a doubt, Harrison is growing and future growth will come, but the numbers need to justify the investment. The fact that a study is being conducted is always a good sign that a hotel is needed. In Junker’s experience, about one in 20 or 25 studies fail to show a hotel would thrive.

There were several owners of local Airbnb’s in attendance. They were supportive of an effort to bring a hotel to Harrison and forthcoming about the demand and need for lodging. In fact, when Junker asked the audience if anyone was against a hotel no objections were raised.

Questions from the attendees were ahead of the process. Namely, what hotel brand and what type of hotel. Junker couldn’t answer that but stated that no one is building economy hotels right now. The ideal hotel built in Harrison would have upper mid-scale rates over $100.

Location is also not as important as it used to be. Proximity to a highway is good, but visibility from the highway isn’t necessary now that everyone has a cell phone with internet and access to travel information. Availability of water and sewer infrastructure is important, but the location would ultimately be the decision of the investor.