HomeMy WebLinkAbout5.2a Hotel Market Study
TO: Board of Directors, Cottage Grove Convention and Visitors Bureau
FROM: Gretchen Larson, Economic Development Director
DATE: February 24, 2023
RE: Hotel Market Study Report
Background
The city attends the annual ICSC Retail and Investors Expo to showcase properties for
development and redevelopment to investors, retailers, and the hospitality industry
representatives who attend the expo. During the 2022 event the city team once again visited
with a variety of attendees in the hospitality industry and each of them inquired if we had a
completed a hotel market study. Upon our return from the expo, we began discussions on either
updating the previously commissioned 2014 hotel study or completing a new study. Also, as a
part of the process, we met with a number of the hoteliers each of whom recommended that we
consider the services of HVS, one of the preeminent providers of hotel market studies in the
hospitality industry. After completing our research and visiting with a number of firms, the staff
recommended to the Economic Development Authority (EDA) that we engage the services of
HVS to complete the study and at their August meeting the EDA approved engaging the
services of HVS to complete a Hotel Market Study.
During the months of September and October, the team at HVS completed numerous interviews
in the market with demand generators including area businesses, sports associations, and event
facilities. In addition, they spoke with economic development departments in surrounding
municipalities, as well as numerous competitive lodging facilities. In November, Tanya Pierson
with HVS, met with the City Administrator and staff to review the preliminary findings. Based on
their demand generator interviews and pattern of business development, they found that the city
could support a midscale or upper midscale limited-service, chain-affiliated, 90-unit-hotel. In
addition, it was their recommendation that the US-10/US-61 corridor at 80th Street be the
primary area of focus for development because of the favorable visibility, easy access, and
proximity to area businesses and retail establishments in Cottage Grove. The study also found
that as the city continues to grow and add jobs, new homes, and retailers to our base, that the
Shoppes at Cottage View and Jamaica Avenue areas would also be good locations for future
hotels.
Discussion
Since the report was received and approved by the City council and EDA, the City Administrator
and staff have been visiting with those hoteliers from the last ICSC expo who had requested
copies of the new study by HVS. To date, three of the five representatives, one of which is a
developer, have reviewed the study findings and expressed interest in discussing the proposed
location at 80th Street further. The city is also working with property owners in the proposed
study area to complete Phase 1 Environmental and appraisal reports as a part of the due
diligence process. As we continue to visit with those interested in the possible development of a
hotel at the proposed site, we will report back to the City Council, EDA, and the CVB on how the
discussions progress.
Recommendation
Receive report.