City needs a hotel, study finds
At least one new hotel needed to keep dollars in the community
Saturday, Mar 29, 2014 06:00 am
The best time for a new hotel in the city is now, and the best place to build one is in Campbell Business Park.
At least that’s what a new hotel demand study has determined.
The study found the best location and type of hotel needed in the city, said Sean McRitchie, manager of business attraction with economic development. It found that Campbell Business Park is the best place for a new hotel.
“They did say that Campbell would probably be the most ready for redevelopment,” said McRitchie. “Based on Henday access and industry and tourism.”
The study, commissioned by Vancouver-based consulting firm HVS, found that St. Albert needed at least one other major hotel to sustain healthy occupancy levels for visitors in the city.
It did so in comparing rates from the two other major hotels in the city, the Best Western and the St. Albert Inn and Suites. In 2013, both hotels had an estimated average occupancy rate of 70 per cent.
A hotel usually needs occupancy of about 60 to 65 per cent to be viable, McRitchie said.
“The fact that both of our main hotels in St. Albert are well above that, that speaks volumes about this market,” he said.
Industry and tourism travel
The biggest demand driver for hotels in the region is industry and business travel, he said. But there are also a lot of sports events in the city, and visitors coming to tour West Edmonton Mall, he said.
At this time, hotels in the northwest of Edmonton capture the majority of overnight stays. Adding another hotel to the St. Albert market could keep more local visitors – and their dollars – in the city, he said.
“It’s really unfortunate when we host large events and we have tournaments … we have people leaving to go into north Edmonton … rather than staying in this community where the event is actually taking place,” he said.
Based on the study, a new hotel should have about 100 guestrooms, with 1,000 to 1,500 square feet of meeting space, an indoor pool, exercise rooms and a business centre.
The study projected two different scenarios for the hotel. The “limited-service scenario” assumes that the proposed hotel does not have any in-house food services, whereas the “select-service scenario” adds a restaurant as part of the hotel.
The hotel would also benefit from having an upscale national brand, such as a Hilton Garden Inn, said McRitchie.
Besides Campbell Business Park, the study found that there are three other potential sites for hotels in the city: the southwest near the Riel and South Riel business parks, the Erin Ridge area and downtown.
The study found that the north and centre of the city still require significant redevelopment and are not ready for a hotel, said McRitchie. But Riel is now in a growth stage with several developers moving in, which makes it viable if nothing materializes in Campbell Business Park, he said.
While there has been some speculation that a hotel may someday be built on the land behind Apex Casino in Campbell Business Park, the Alberta Gaming and Liquor Commission is now building a new warehouse on that site. That doesn’t mean a hotel can’t still go there, said McRitchie.
“There is still some space that the casino group holds,” he said. “We’ll see what the casino does with it but this report pretty well indicates that the Campbell site is ripe for development, especially with a hotel.”
The study assumes that a new hotel will open by Jan. 1, 2016. While that gives the study a shelf life of only 12 to 18 months, the economic development department is now using it to attract potential developers, landowners and investors, McRitchie said.