FOR IMMEDIATE RELEASE
Meet Minneapolis Board announces next steps in hotel feasibility study
Task force will examine hotel, convention trends and opportunities, challenge data
(MINNEAPOLIS) April 24, 2013 Meet Minneapolis, Convention and Visitors Association, Board of Directors today announced that it has formed a task force to continue its examination of the citys hotel market and its ability to attract additional convention and event business.
The task force, led by Rob Moor, vice chair of the Meet Minneapolis Board of Directors and CEO of the Minnesota Timberwolves and Lynx, will be assembled from members of the board, and will address three main opportunities:
- Recommend an action plan that optimizes the utilization of Minneapolis current hotel assets;
- Define the desired meeting and convention target market segment that provides the best future economic opportunity for the city;
- Determine the assets and strategies that will be required for Minneapolis to gain and maintain the competitive edge for attracting future business from this desired market segment.
This is an important next step for us, said Meet Minneapolis Board Chair Peter Mihajlov. We know that we arent currently competitive in terms of attracting the largest events, the ones that require 3,000 or more hotel rooms at peak. Weve asked the task force to fill in the blanks by first determining where our best opportunities are for growth. Is it in the 700-peak room segment were currently competing in? Or is it in the 2,000-peak room range or even the 3,000-peak room range?
Then, once weve determined where our best opportunities lie, we want the task force to catalog what we need as a destination to gain and maintain a competitive edge in whatever segment were targeting. This is critical work that will help Meet Minneapolis, the city and other interested groups know how to best use our limited resources while minimizing the impact on the current market.
Mihajlov said the board did not set a deadline for the task forces work to be completed, but expects progress to happen in the next several months.
Related to the work of the task force, Meet Minneapolis today also released the results of a feasibility study looking at the need for a 1,000-room hotel in close proximity to the Minneapolis Convention Center. The study, led by industry consultant Convention, Sports & Leisure International, or CSL, with supporting analysis from Hospitality Valuation Services Consulting & Valuation (HVS), concludes that:
- Relatively high occupancy rates and average daily room rates (ADR) in Minneapolis suggest that hotel development in downtown is likely over the next several years, with or without the addition of a convention hotel;
- Minneapolis would benefit from the construction of a 1,000-room hotel that would allow it to attract additional convention and tradeshow business;
- The development of a 1,000-room hotel would negatively impact nearby downtown hotels in the short term, but positively in the long term as additional convention and trade show business is attracted to the community. Strong economic growth or development of new demand could reduce the recovery period;
- A hotel of this scale would cost an estimated $304.5 million, take 24-30 months to construct and would require public participation in order to make the project economically viable.
The study also noted, however, that convention hotels are nearly always built through full or partial public participation.
Outside of New York and Las Vegas, headquarter hotels of this sort require some level of public investment, said John Kaatz, Principal, CSL. All of the recent projects of this type have had a public component, a few are entirely owned by a public entity. Minneapolis actually has a strong and successful record in this area, most recently in supporting the construction of the Hilton Hotel in the 1990s. The citys investment there made the hotel possible and actually earned a profit for the city.
This study adds important information to the conversation, Mihajlov said. The task force can take what was learned here and further help us determine how we citizens, business owners, community leaders want our city to grow, especially in terms of enhancing our reputation as an attractive destination for meetings and conventions. Our belief is that our quality of life and our economic vitality are enhanced by attracting visitors to shop, dine, be entertained and to explore the wonderful mosaic of our community. The question is how best to use our assets to advance that goal.
Specific analysis steps undertaken by CSL and HVS included interviews with project representatives (hotel professionals, economic development officials, elected officials, developers, finance officials, land owners and other individuals that could impact or be impacted by the project); extensive hospitality market research; review of local supply and demand characteristics and trends; review of event activity currently accommodated at existing hotels in the market; analysis of local economic conditions impacting room demand; in-depth research of competitive and comparable facility/market product; surveys of corporate, business meeting and association event planners that represent potential market demand in Minneapolis; and development of models to project financial performance and community-wide economic impact.
The full report is available on the Meet Minneapolis web site here (with this release, dated April 24, 2013).
ABOUT MEET MINNEAPOLIS BOARD OF DIRECTORS
Meet Minneapolis Board of Directors is comprised of 39 directors, many from the hospitality industry, including restaurants, hotels, facilities and sports teams.; 31 from the private sector (elected by members), six Minneapolis City Council members, a Hennepin County Commissioner, the mayor of Minneapolis, as well as five Ex-officio and eight Directors Emeritus.
ABOUT MEET MINNEAPOLIS
Meet Minneapolis is a private, not-for-profit, member-based association. It actively promotes and sells the Minneapolis area as a destination for conventions and meetings, works to maximize the visitor experience and markets the city as a desirable tourist destination to maximize the economic benefit of the greater Minneapolis area.
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