July 27, 2004 - A Northern Arizona University on-campus hotel and conference center should focus on attracting "drive-to" associations with a three-star hotel, says consultant who did a feasibility study for NAU.

The university has considered an on-campus hotel and conference center to complement its hospitality program, but had backed off when the city issued requests for proposals for its own conference center last year.

The hotel and conference center is still part of the campus' master plan, however, and the university is open to collaboration with the city, M.J.
McMahon, executive vice president said.

McMahon was to attend Monday's city council work session about the market feasibility study for the city's convention center.

NAU's on-campus hotel and conference center feasibility study, which was presented at the June Arizona Board of Regents meeting, was done by Jim Wheeler of Ayers Saint Gross out of Baltimore.

The study showed it would be best to cater to "drive-to" associations in Arizona with a three-star hotel.

The study found most on-campus hotel and conference centers located at universities that have hospitality programs are located at universities with 20,000 or more students, and they are located within 65 miles of a major metropolitan area with significant employment that has a corporate base to spark demand for a conference center.

But NAU has about 13,000 students on the Mountain Campus, and Flagstaff is a small metropolitan area with about 55,000 people. Flagstaff is about 140 miles from a major metropolitan area, and it has a weak corporate base, according to Wheeler's assessment.

Also, air service to Flagstaff is limited compared to other universities with on-campus hotel and conference centers, such as the University of Houston, Michigan State University, Pennsylvania State University and Cornell University.

Other drawbacks to Flagstaff to make a hotel and conference center financially viable include flat hotel occupancy in the low 60 percent and an average daily room rate (in the upper $50 range) that has not kept pace with inflation over the last six years.

Wheeler recommends if NAU were to go forward with a hotel and conference center to go with a three-star hotel instead of a four-star or five-star hotel, which could be harder to fill rooms at a higher room rate.

The study shows the university's hotel and conference center could cater to state associations, which do not rely as much on access by airplane.

About 42 percent of the state association groups average up to 200 participants and 70 percent of the associations have annual meetings and 24 percent have monthly meetings, the study found.

City, university collaboration studied The master plan presented to ABOR also gave examples of universities and cities collaborating on a hotel and conference center.

One example is Virginia Tech and Roanoke. It involved a $27.8 million renovation of an historic hotel, restaurant, pub and public spaces as well as the construction of a $12.8 million conference center.

The 332-room hotel was funded through many sources. Those sources included a $6.5 million bank loan, a $6 million HUD loan, $7 million equity from Renew Roanoke, $4 million from Virginia Tech Real Estate Foundation, $3 million from land sales and $1.3 million from Double Tree Hotels.

The 63,000 square-foot conference center is funded through general obligation bonds through the city of Roanoke.

The hotel is majority owned by Virginia Tech Real Estate Foundation and a third owned by Renew Roanoke. The conference center is owned by Hotel Roanoke Conference Center Commission.

The hotel and conference center gives Virginia Tech hospitality students practical experience, it created additional jobs for the city and it generates an additional revenue stream for the city and Virginia Tech.

NAU President John Haeger has said it does not want to interfere with the city's plans for a hotel and conference center. It is not something NAU has asked ABOR to build and it would discuss it with the community before pursuing it, he said.

Haeger has said the hotel and conference center could meet the campus' needs from a teaching perspective and to meet the needs of conferences that already meet at NAU, such as Arizona Boys State.

NAU's hospitality program already operates the 19-room Inn at NAU, which is located on the NAU campus and has a restaurant.

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