It’s no secret that out-of-towners flock to Gainesville for fall football weekends and that hotel rooms in the Swamp vicinity get scarce.
It’s also no secret that this town is budding with innovation and business opportunities, attracting more corporate travel.
A lineup of five new hotels slated to take root in the area over the next five years offers elbowroom to relieve cramped conditions on those weekends and offers more room for growth — which looks like a good thing.
But in the eyes of some local hoteliers and tourism experts, these new franchises could present inhospitable consequences to the overall landscape of Gainesville business.
“Build it, and they will come.”
That’s the way that Megan Eckhdal, president of the Alachua County Hospitality Council, describes the City of Gainesville’s approach to growth. It’s an approach she challenges.
Eckhdal, who is also the Hampton Inn marketing manager, counters that “they” – out-of-towners – are not coming, or at least not in the droves necessary to support all of the city’s existing hotels.
She estimates that local hotels are filled to capacity about eight weekends out of the year, accounting for about seven home football games plus the Gatornationals drag racing event. Aside from that handful of weekends, she says occupancy is not hitting a healthy high across the board.
“None of the hotels right now are at capacity,” she says.
The influx of rooms that the five limited-service hotels will bring will glut the market, she says.
Tony Trusty, general manager of the UF Hilton, forecasts similar shades of doom.
He says introducing new hotels to the market is a simple matter of economics and means one thing: plummeting rates across the board.
“The occupancy rate in the hotels is going to go down because you have new supply,” he says.
“You’ll have a shift from already struggling hotels to new hotels.”
That shift, he says, will put pressure on old hotels. To combat the change in supply as the demand is spread among more businesses, older hotels must drop their rates.
“So the market will see a decrease in occupancy and a decrease in rate,” he says.
This potential downward shift would also touch the county’s wallet. That’s because it levies a “bed tax” of six cents per dollar spent on hotels in Alachua County.
The bed tax money gets put toward projects intended to increase tourism to the area, such as Nations Park and a proposed conference center. Bed tax projects are supposed to feed back into the
local tourism industry, which helps the hotels paying into the tax.
But when rates are driven down by spread-out demand, Trusty says, the county will bring in less money because it’s taking a percentage from an overall smaller pool of money.
The litmus test
But Adrian Taylor, vice president of innovation and regional initiatives at the Gainesville Area Chamber of Commerce, views the landscape differently. He says that overall travel to Gainesville is on the rise, and locals should not fear watering down the demand.
“The hoteliers will…demonstrate that they have increasing demand as the economy has recovered,” he said. “Travel has started to recover. Recreation travel…is extremely heavy. We have no trouble filling up on weekends.”
As far as weekday travel, he said that’s looking positive, too.
“The most important number to local hotels, numbers from Monday through Thursday, is also increasing. That’s really the great litmus test for you – is there a substantial demand during the week.”
He said new hotels will “most assuredly” do well on the weekends, and “as business activity grows, weekday rooms should increase, too.”
From an event-planning angle, perhaps there is a market for more hotels.
When Colleen Flage is planning to host
a conference during football season or Gatornationals, she says that “sometimes it’s difficult to find space.”
Flage, UF Law’s public functions coordinator, plans about 100 events per year, and she said she would welcome more hotel space as well as more space to hold conferences and large events.
“Those are are opportunities where we could expand,” she said.
She referenced a recent conference she organized in town in which she had to cap the participant level and hold it on campus because local hotels were already booked. She says that more space for people to spend the night and hold meetings simply means more room to expand events.
“I think our events are planned with our facilities in mind, considering the maximum capacity,” she said. “My hope would be that we would be able to bring in bigger events to fill larger facilities.”
But what if the new hotels do bring the negative side effects forecast by some?
To prevent rates from plummeting, Trusty says a better solution would be to bring in more full-service hotels as opposed to the limited-service hotels that are currently slated.
He says particularly hotels that include meeting space would thrive in the area and put upward pressure on the market. The reason limited- service hotels are so popular, he says, is because they are the least expensive for developers.
“They are the most profitable for the developer but may not meet the needs of the community,” he says.
Right now, the Hilton that Trusty manages is one of three full-service hotels in town. In advocating for more full-service hotels, Trusty is inviting more direct competition. But that’s something he says he would welcome.
He compares the dynamics of hotel competition to a community with two car dealerships: a Lexus dealership and a Kia dealership.
The Lexus dealer “is going to be under a lot of pressure to sell at a lower rate, but they’re not selling the same product,” he says.
So, to promote a healthy market, Trusty says building nicer hotels with amenities would be the solution. It would up the market and increase weekday travel, which would help fill up hotels across town.
“It not only benefits the developer. It also benefits the community,” he says. “Yes, that’s competition for me, but it’s the right kind of competition.”
Susan Perkins, general manager at the Hampton and Eckhdal’s mother, agrees. She says more hotels mean lower rates across the board. That may please consumers, but it leaves fewer resources for hoteliers to maintain their properties.
“Gainesville is coming out of a sluggish market,” Perkins says. “You bring in more hotels, you drive us back down.”
John Pricher, interim director of the Alachua County Visitors & Convention Bureau, agrees that the way in which new hotels are introduced to the area will determine what happens to the market.
Bringing more upscale properties to the area is one way to help, he says.
“If it’s not a different style of property, everybody is still competing for the same type of business,” he says.
Upgrading lower-end hotels that may have been performing poorly or were in poor condition is another way.
“If they’re replacing a property, something that’s been torn down and now there’s another thing in its place, that helps the area,” he says.
Increasing weekday business travel would also help foster a healthy demand. Gainesville’s innovation and technology focus is capable of helping, Pricher says, but it hasn’t fully materialized yet in terms of actually creating demand.
“I think the potential for that to turn into something much bigger is very real,” he says.
Regardless of what happens to the market when the five new hotels open their doors, Pricher says that existing hotels will need to re-evaluate the way they do business.
“The hotels will have to be proactive in how to address that fact when they’re in competition with something that is brand new. It’s shiny,” Pricher says. “I hope there is a creative way to address that.”