Lack Of Hotels Costing Worcester Economy

Monday, February 25, 2013

Adam Joseph Drici, GoLocalWorcester Contributor

A lack of hotel rooms located in the City itself is costing the local economy potential business, according to Destination Worcester, but City Manager Michael O'Brien said talks with developers to remedy the situation are ongoing and real solutions should be forthcoming over the next several years.

Since its formation in 2007, the mission of Destination Worcester has been to showcase the Commonwealth's second-largest city and sell it as a venue to planners of meetings and conventions, as well as sports and event organizers. Robert Murdock, who heads up the public-private organization, siad Destination Worcester has been successful in marketing the Heart of the Commonwealth for big-time multi-day events, such as national competitions, that attract national media and both domestic and international visitors.

"There is undoubtedly a significant impact on the local economy when people visit Worcester, sleep in our hotels, eat in our restaurants and shop in our stores which is the ultimate and the overarching goal of Destination Worcester," he said in a memo the City Council.

A shrinking stock

However, the city's stock of hotel rooms and conference space is far short of what it could be, or even what it was just a few years ago.

When the Massachusetts College of Pharmacy and Health Sciences (MCPHS) took over the former Crowne Plaza hotel, which was lying vacant and bankrupt in 2010, Worcester also saw its number of overnight hotel rooms cut by 243, or 24.8 percent of the current stock at the time. The hotel's 6,500-square-foot ballroom and its nine meeting rooms were also taken off the market, not to mention the positive ancillary effects a large conference at the Crowne Plaza would have on the city's other accommodations.

"With the City's economy thriving, the Worcester hotels are busy with their business clientele. Only about half of the existing 638 overnight rooms are committable for groups on their peak night," Murdock said. "As a result of the Crowne Plaza closing, it is more difficult to find available space in Worcester for groups that Destination Worcester brings or is trying to bring into the City."

The cost of fewer rooms

Murdock cited the example of the 2013 North America Vishwa Kannada Association (NAVIKA) Summit, which was looking for 400 to 500 rooms per night for the end of August 2013. With Worcester unable to accomodate so many rooms, Destination Worcester had to supplement the booking with rooms in Auburn, Marlborough and Westborough.

"Along with the inability to keep this hotel revenue in the City, the City is also losing potential revenue that will be spent on eating in restaurants, shopping and attractions."

Splitting rooms across multiple hotels is less than ideal for event planners and can throw an additional wrench in the works when it comes to transporting attendees to and from the event venues.

According to Murdock, right now the Beechwood Hotel and the Hilton Garden Inn are the only two hotels in Worcester that can handle both the lodging and the conference and meeting sides of group events, but each has its drawbacks. On the one hand, the Beechwood has good meeting space, but as a boutique hotel only has 73 overnight rooms. On the other hand, the Hilton Garden Inn has 199 overnight rooms but lacks much meeting space.

Murdock said that Destination Worcester will often combine overnight rooms at one location with meeting rooms at another, but the costs for a combined venue are always higher and the convenience factor can be a turn off for organizers. The situation has led to Worcester missing out on two big recent events: US Rowing's 2011 National Convention, which was held at the Hartford Downtown Marriott instead, and the USA Gymnastics' Region 6 Congress Meeting for the Northeast, the bid for which would not be considered unless it was held at a single location.

Hoteliers "very interested" in area

"It is very important that we assess and push for all the attributes and opportunities to successfully market the City to attract regional and national conventions, regional and national sporting competitions and visitors from across the country," said City Manager Michael O'Brien. "The local spending and economic spin-off from these visitors, the positive branding of our City/region and the revenues netted from lodging, meals and other sources are key to our bright future."

O'Brien said that the administration has had ongoing conversations with hotel developers "very interested" in investing in the Worcester market.

"I do expect that these will advance in the year ahead to actual, bona fide proposals. It is very important that the proposals not only have the level of quality/depth of amenities (as presented) to meet the needs (as identified), but also complement and strengthen our existing inventory of hotel rooms and premium hotel properties."

If a new hotel is built in Worcester, Murdock said a name brand property would be a big plus.

"In speaking with travelers and planners many often feel more comfortable recommending a property when they recognize the brand and know its standards. Brand hotels are also popular for those who collect or want to utilize loyalty club points," he said. "In many cases, hotels from various brands do not truly compete as visitors will travel many miles to stay in a loyalty club brand rather than utilize local options. In this way a new brand entrant to the hotel scene could actually enlarge the 'pie' of visitors staying in Worcester rather than increase competition among existing hotels."

Slots and a luxury hotel?

The Wyman-Gordon property, which has been the subject of talk about a possible slots parlor in Worcester, is now under agreement with Cambridge-based Carpenter & Company, Inc., according to a letter from City Manager Michael O'Brien to the City Council issued last month.

In a statement sent to the City by Carpenter & Company President and CEO Richard L. Friedman, the developer said his company has had "serious long term interest in developing a luxury hotel in Worcester." Friedman pointed out that his company is not a gaming developer and does not intend to become one.

"We are, however, interested in exploring how a gaming facility in Worcester would help the development and operations of a new hotel," Friedman said.

The details of the long-term option on the 14-acre vacant site were part of a private agreement and not publicly available at the time.

Friedman's statement noted that the Wyman-Gordon property is under consideration for gaming use by "one or more highly qualified gaming companies" who have submitted applications to the state's Gaming Commission prior to the Jan. 15th deadline.