The Medicine Hat Lodge takes a different approach to renovating, preferring to tackle a smaller portion of the property every year. Last year the banquet room was renovated.
“Hotels have to keep up with the new trends and styles in order to stay current and attract visitors,” said Elisha Ammann, executive director of the Medicine Hat Accommodation Association. “The Home Inn underwent the biggest renovation of 2016, changing the entire hotel. They rebranded. They used to be a Motel 6 and now they are a Home Inn, which is the only one of its kind. They’ve put in an à la carte breakfast. They’ve renovated all their rooms. They did a massive renovation of that property both interior and exterior.”
Timing is Everything
Before the sharp drop in oil prices, the hotel business in Medicine Hat was strong.
“Prior to the economic downturn, the hotel market was very healthy and poised for new supply as rates and occupancies were up,” says Brooke Christianson, vice- president of Canalta Hotels. “Unfortunately, the downturn took a lot of wind out of those sails.”
“For us, the decrease in the economy is less to do with actual room nights produced by the industry versus the subsequent results of them all losing their jobs," explains Ammann. "That’s that big ripple effect that the whole province feels when our main industry decreases. It affects everybody.”
“In terms of occupancy, this summer (2016) was our worst in the last seven years,” said Ammann. “June was terrible. We’re down about 30 per cent this year overall – and that’s a number that can be applied to most cities in the province. And that’s just logical, when people lose their jobs, they’re not going to take holidays. A good 25 per cent of our visitors are other Albertans moving about the province.”
With occupancy rates so low and the economy hurting, it may seem like a strange time to be witnessing so much development. Not so, says general manager Ryan Jackson of Invest Medicine Hat.
“If you are a builder, developer or business owner, a downturn is when you do your expansion plans. You have available capital. You’re building when guys need to work. By the time a project of that size and scope is finished, chances are you’re going to catch the upswing.”
Glen Allen, business professor at the Medicine Hat College, adds, “If you go one step further, in terms of finding investment dollars, when interest rates are low, people are seeking out higher returns so are more likely
to invest in projects that are maybe not so traditional.”
“Sometimes a build spurs another build. Sometimes when you get one business, it attracts the attention of others. You don’t want your competitor to have free rein for a while in a market.”
The cost of constructing a hotel is great, and it can take years to recoup those costs. To be investing so significantly in Medicine Hat now means that these companies believe that the long-term economic trend for the city is a positive one.
“Our plan is a long-term one," says Christianson. "We are committed to grow in Medicine Hat. We are betting on the market coming back in coming years. We’re investing in Medicine Hat for the long term.”
Building Benefits
the Community Construction projects help to spur the economy, notes Jackson, and are often undertaken by both the government and the private sector during downturns. Both the building of a new hotel and the renovation of an existing one create a significant amount of temporary construction jobs. In addition, there is the revenue created from the sale of the land and the purchase of materials. Up to half of the $2.9 million paid to the City by Canalta Hotels for the property on Strachan Road will go to the Community Capital Fund.
Once built, the hotels require people to run them. A regular 100-room hotel takes approximately 10 front-desk staff, 12 housekeepers and two or three mangers to run, according to Ammann. That’s 25 full-time jobs plus many more part-time opportunities. A full-service hotel, like the Medicine Hat Lodge, employs even more people.
In addition to the hotel staff, people are needed to work in the stand-alone restaurants and retail stores which hoteliers sometimes build next to their hotels. For example, the Canalta Group is the owner of the Boston Pizza next to the Hampton Inn as well as co-owner of the recently-opened Keg Restaurant.
A final benefit to consider is the money brought into the local economy by guests, who not only pay for hotel rooms and meals but also purchase items in local stores and attend local events. According to Ammann, a single hotel guest can spend over $325 in the city.
Once the economy recovers and the new hotels are built, there will be more rooms with more guests spending more money. Hoteliers have more than just faith in the future, they are actively working to create a strong economy now and in the years to come. ❚
The king studio suite at Hamptons Inn & Suites.
The Hamptons Inn & Suites is located in Box Springs Business Park.
Janessa Hirning with guest services answers the phone at the front reception at the Hamptons Inn & Suites.
Gail Burt cleans up after breakfast at Home Inn.
The breakfast lounge at the Hamptons Inn & Suites.
The Hamptons Inn & Suites has a pool, waterslide, hot tub and full fitness centre.
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