By CYNTHIA KMETT
Troy Planners have looked at a number of requests to build new hotels in Troy over the past few years. Now they are starting to question whether or not the city needs, or can support, this many hotels.
There are a number of proposed hotels on the front burner even as the planners were approving the TRU Hotel for Maple Road last month. The planners were, to say the least, a bit skeptical.
What’s still to come before the Planning Commission? A Staybridge Suites and Holiday Inn are seeking approval on Tower Drive. Home 2 wants approval for the south side of Wilshire, west of Big Beaver. There are two hotel requests for the north side of Wilshire, which are tied up in a lawsuit because they were denied. And, rumor has it that a hotel wants to come to New King Street, where we are finally seeing a little action on what was once approved for a McDonald’s, which still might be part of the plans.
And what happened to the Aloft hotel approved in 2016 behind PNC Bank on Big Beaver? Apparently, there are some deed restrictions on the land.
Troy Planning Director Brent Savidant asked the planners if they would like to hear from an expert. Last week, Ron Wilson of Hotel Investment Services, Inc. (HIS) came to the Planning Commission meeting to explain how the hotel chains decide if a city is a good spot for their hotel.
Wilson’s firm is often consulted by builders on the feasibility of building a hotel at a given location. He earned his master’s in finance from Walsh College. HIS is a Troy firm and Wilson is a 35-year Troy resident. HIS develops hotels, conference centers, and golf courses. They are also known for redeveloping older properties like St. John’s in Plymouth.
Some planners might not have liked what Wilson had to say.
Several trustees might have wanted him to say Troy has plenty of rooms now and a hotel could be denied because they now require “special use” approval. Wilson might have said that what we needed was another luxury hotel, or a new hotel on the Civic Center.
Wrong. There was a time when Troy only allowed “luxury hotels” like the Marriott and Somerset Inn, which had to have a certain amount of presentation space and meeting rooms. Those rules are gone now. Wilson said you have to have something special to attract visitors to such hotels, and Troy doesn’t have such attractions.
In addition, he said he was against a hotel on the civic center. So why is Troy a good place for a few more hotels? For the last 96 months, revenue per available room has increased, Wilson said.
He noted that things for the hotel industry have gotten even better since the federal tax cut. Businesses have more money and they like to spend it, Wilson observed.
“Business is what Troy depends on.”
Companies that have more money will use it for travel and training. But hotel development also needs capital. After the recession set in it was hard to get capital, Wilson noted. While that eased up, there have been some concerns about the increased cost of borrowing money. In addition to that, the construction costs have gotten higher and there’s a lack of talented construction workers and these can be problems. Add to that the fact that hotels take a lot of people to run them.
People are a big issue, not for just hotels but for restaurants, too, as any restaurant manager will tell you. Business-focused hotels don’t need as many people.
If you look at a chart that says Troy’s hotels are only 73 percent occupied for a month, remember that almost no one goes to a business hotel on weekends. But some hotels in Troy are actually sold out midweek – you’ll never get a discount on a Wednesday night.
“Troy’s doing very good, really good,” Wilson assured the planners.
Can the city support any more business-focused hotels? He said he thought the city could handle three or four more hotels of that nature, easily.
But what happens if we have a recession? First of all, Wilson noted that some hotels are past their prime. Hotels need to be updated about every seven years, he pointed out. If a hotel fails, he said it would either be sold or something else would come in to use the land.
If you don’t build it when there’s demand, Wilson said the developer would go to another city. People who stay at these business hotels fuel the local economy, Wilson noted. They buy stuff, like food and gifts and transportation. And, they pay taxes on their rooms.
“Troy is a healthy market and can take the right kind of hotels,” Wilson said, adding there’s an opportunity here for extended stay hotels, too.
How can the planners know if a developer will build a good hotel and take care of it? Wilson said to go to TripAdvisor and you’ll get a feel for how a hotel operates. Sounds like good advice for any traveler. He did note that developers who are part of the Holiday Inn, Marriott, Hilton and Hyatt chains are typically good builders.