Nov. 03–Consumers may not like higher prices, but to Dan O'Connell the fact that the average daily cost of a Fort Wayne hotel room has just surpassed $100 for the first time is a very welcome illustration of the law of supply and demand.
As president and CEO of Visit Fort Wayne, it's O'Connell's job to sell the Summit City. And with plenty of conventions in the pipeline, 10 new hotels under construction or planned and a current occupancy rate of about 74 percent — also an all-time high — the local lodging industry's bull market shows no sign of slowing down. And that O'Connell says, means Fort Wayne's $619 million-a-year convention and tourism industry soon will be equipped to compete for even bigger and better things in the years ahead.
What a difference a few years can make. Back in 2004 I wrote about a Chicago firm's conclusion that Fort Wayne could support a new $30 million, 300-room downtown hotel in addition to the 246-room Hilton and 208-room Holiday Inn already there. C.H. Johnson Consulting suggested the facility could have a 61 percent occupancy for its projected 2007 opening. Then the economy crashed, and construction of what turned out to be a 250-room Courtyard by Marriott didn't begin until 2009 — a year before the dated Fort Wayne Hotel that had been the Holiday Inn was converted into senior housing.
Soon, however, the number of downtown hotels will double from two to four with next year's completion of the $20 million,136-room Hampton Inn next to the Courtyard by Marriott and the expected 2020 opening of the $27 million, 125-room Provenance Hotel at Main and Harrison streets. The additional hotels, either attached to or within easy walking distance of the Grand Wayne Center, should boost efforts to land national conventions that require more rooms than the city could previously provide.
The strong national economy, which has resulted in increased leisure spending and business travel, only begins to explain Fort Wayne's hotel boom, O'Connell said. The lodging investment downtown is in response to Parkview Field and other so-called "public-private" projects, but the return of corporate headquarters to downtown Fort Wayne, such as Ash Brokerage, Shindigz, SIRVA and, perhaps soon, Ruoff Mortgage have also helped, O'Connell said. And most of the other new or planned hotels are going up on the north side, spurred by the arrival of Parkview Regional Medical Center and the growth it has generated there.
The city currently has about 5,000 hotel rooms, but O'Connell said about half of them are usually at capacity thanks to various transient populations. And with just 500 or so of the remaining rooms downtown, O'Connell said a third new downtown hotel could be a possibility in the not-too-distant future. By 2020, in fact, he expects the number of rooms in Allen County to reach 6,404 compared to 5,216 three years ago.
The Grand Wayne Center can accommodate as many as 2,000 people, and convention-goers normally prefer to walk to their hotels and related events. The redevelopment of downtown has been crucial in that regard, O'Connell said, as Harrison Street is in the process of being transformed into a sort of "urban trail" that will link the Grand Wayne, Embassy Theatre, Parkview Field, The Landing, riverfront, hotels and restaurants.
"Fort Wayne is really changing, and we need to get that message out," said O'Connell, who believes the hotel boom could and should help in that regard.
Allen County hotels currently impose a 7 percent tax expected to generate more than $5.5 million this year, an increase of more than 16 percent from 2017. Visit Fort Wayne gets 2 percent, which covers most of its $2.2 million budget, and the Grand Wayne Center gets the other 5 percent. O'Connell has asked the Indiana Legislature to increase the total tax to 8 percent, with Visit Fort Wayne using the additional revenue to boost marketing and, in turn, draw still more people and economic activity to Fort Wayne.
Even without the extra cash, 2019 looks good: At least 44 major conventions, consumer shows, tournaments and special events are already expected at various venues, international juggling and blind athlete events. But the demand for rooms those activities create represents the down side of the law of supply and demand, at least from O'Connell's point of view.
In order to accommodate large conventions, the Grand Wayne and other venues often secure blocks of rooms at discounted prices. But because of the strong demand and the need to accommodate corporate travelers and others, O'Connell said, hotels often are reluctant to set aside as many lower-priced rooms as he and others might like. That fifth downtown hotel would help, and so has the growth of Airbnb — renting out private rooms or entire houses via the Internet. There are about 167 such facilities in Fort Wayne, including 30 near downtown.
So, for now at least, the competition for rooms can be a problem — but one that didn't exist just a few years ago when Fort Wayne hotels' occupancy averaged 55 percent.
This column is the commentary of the writer and does not necessarily reflect the views or opinions of The News-Sentinel. Email Kevin Leininger at kleininger@news-sentinel.com or call him at 461-8355.
