|By Jim Martin, Erie Times-News,
Pa.McClatchy-Tribune Regional News
June 09, 2012 --The hotel building boom could be starting again in Erie County as the economy recovers and the tourism sector shows signs of expansion.
The past decade has been a period of explosive growth for the Erie-area hotel market.
Just eight years ago, visitors could choose from among about 3,000 rooms for rent at local hotels, motels and inns. Today, about 4,300 are available for nightly stays.
It seemed for a time that the number might be too many. As the building boom slowed at the beginning of the most recent recession, Erie's leading hotel developer was among those wondering if too many had been built.
Developers seem to be setting aside those concerns as they eye a series of projects:
- Work is expected to begin this summer on a 118-room Baymont Inn and Suites being developed near Presque Isle Downs & Casino by MTR Gaming Group Inc., the casino's parent company.
- Erie developer Nick Scott Sr., president of Scott Enterprises, announced in May that he plans to build a hotel on Erie's bayfront west of Blasco Library. Construction could begin by fall.
- The Erie County Convention Century Authority says its plans for the former GAF Materials Corp. property include a midpriced hotel.
- Chris N. Scott, vice president of Scott Enterprises, said his family's company is considering plans for another hotel that has "a little different niche."
Do these projects make sense, especially after the number of hotel rooms grew more than 40 percent in the past decade?
A look at occupancy rates suggests additional hotels might find an audience.
Smith Travel, a research company, reports Erie County hotels had an occupancy rate of 57 percent for 2011. Smith Travel also reports that 2012 occupancy through the end of April was 48 percent.
Both numbers can be characterized as good, said John Oliver, president of VisitErie, Erie County's tourism promotion agency.
Oliver said the national hotel occupancy rate averages between 50 and 55 percent, and that 48 percent is an above-average figure for the early part of the year.
Chris N. Scott isn't so sure, however, that occupancy rates are much of a guide.
He said countywide occupancy rates are boosted by higher numbers at Scott-owned hotels, which often provide guests package pricing for the use of Splash Lagoon Indoor Water Park.
Most other hotels don't do as well, he said.
Nick Scott Sr. worried aloud that Erie might be fast approaching the saturation point.
"I am somewhat concerned there will be an overbuilding," he said in May.
Chris N. Scott said the company still has some of those same concerns, particularly as it looks at development along the Interstate 90 corridor.
"I would say the market up here on 90, Peach and Exit 24 is very close if not saturated," Chris N. Scott said. "The downtown is a different customer."
Most downtown customers, he said, are there because of proximity to some of the region's top employers, including GE Transportation, Erie Insurance and UPMC Hamot.
Scott argues that Erie's Bayfront Convention Center has had only a nominal effect on hotel stays. "It's not the convention center," he said. "It's the industries and businesses."
Likewise, the proposed Baymont Inn and Suites isn't expected to compete in a big way for the business of interstate travelers stopping for the night.
Mike Tamburelli, the casino's general manager, said his company's hotel is designed primarily to serve casino patrons, some of whom are given complementary rooms.
Will building more hotel rooms split a pie of limited size into smaller pieces?
John Oliver doesn't think that's the case. "I believe the pie has gotten bigger because of the development we have seen in tourism attracters," he said.
"If you look back, 10 years ago we didn't have a casino; we did not have Splash Lagoon. The Canadian shopping market was smaller. We didn't have (the Tom Ridge Environmental Center). Lake Erie Speedway didn't exist, and we didn't have a new roller coaster."
All of those things, he said, have built Erie's stature as a destination for tourists.
"This is getting bigger," he said.
JIM MARTIN can be reached at 870-1668 or by e-mail. Follow him on Twitter at twitter.com/ETNmartin.
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