Wednesday, October 12, 2011

New Hotels to Add 165 Rooms in Marion

The addition of a new Holiday Inn Express with 101 rooms and a new Comfort Inn with 64 rooms will take Marion's room count from 1108 to 1273, when both projects are open by early 2012. Williamson County's count will grow from 1246 to 1411.

The top seven hotels in Marion have averaged around 78 percent of the motel tax receipts over the past five years. The seven are Comfort Suites, Country Inn & Suites, Drury Inn, Fairfield Inn, Hampton Inn, Holiday Inn Express (soon to change to another flag when the new hotel opens), and Quality Inn. When they open the Big 7 will become the Big 9.

The other motels in the city generate about 6 percent of the overall bed taxes. That leaves the remaining lodging establishments outside the city limits making up about 15 percent.

To put it in perspective, all the lodging establishments in the county generated roughly $700,000 in the 5 percent bed tax levied in calendar year 2010. Forty percent, or about $280,000 went to the Williamson County Tourism Bureau and 60 percent, or about $420,000 went to the Williamson County Events Commission to pay debt service and mandatory reserves on the Williamson County Pavilion.

Since then the city has taken over the Pavilion and levied a 3 percent bed tax on city hotels that preempts the county's 3 percent bed tax for the Pavilion within the city limits. The city issued new bonds to take the place of the outstanding debt. The biggest difference in terms of operational benefit is that any excess bed tax collected by the 3 percent city tax can be used by the city for operations. Under the original bonds, the excess funds went into a separate Bed Tax Savings Account that couldn't be touched short of a major disaster.

The Big 7 hotels have 640 rooms. Adding another 165 is a 25 percent increase. If the new hotels can add to the market rather than just eating into the existing hotels' market share (and that's what their competitors are hoping), then that could be a big kick of revenue for the tourism bureau and the Pavilion.

A 25 percent increase of the Big 7's 85 percent of the market using 2010 figures comes to just under another $60,000 for the bureau and almost another $90,000 for the Pavilion.

Being realistic the figures might be half that amount with the shaky economy. However historically bed tax revenues were up nearly 50 percent between 2010 and 2000 in Williamson County.

Even better, the larger hotels in Marion often employ far more employees than most people realize as they have to remain open 24 hours a day, seven days a week. Other than the management positions, it's not the highest paying jobs in town, but in this economy, every job counts! 
Looking Back — 2000 to 2010

The county started the 21st Century with 1303 rooms. The county lost 200 when the old Holiday Inn/Travelodge/Executive Inn finally shut its doors in 2004, and another 53 rooms or so when Jim Zeller bought the back wing of America's Best Inns and tore it down for the new Country Inn and Suites in 2008. Another 20 rooms at SIU Touch of Nature aren't counted any more when the university decided it was no longer going to collect bed tax back in 2007.

Meanwhile Lake Tree Inn & Suites opened in 2000 with 20 rooms, Fairfield Inn opened in 2004 with 89 rooms, Hampton Inn expanded mid decade with another 20 rooms, and Country Inn & Suites opened in December 2008 with 69 rooms.

The decade also saw the expansion of the specialty lodging market. Olde Squat Inn already had 5 cabins and added two more. Devil's Kitchen Cabins opened with two cabins in 2006 and are now up to three. The Four Seasons Campground in Herrin added two cabins in 2006, though in recent years they've been turned into apartments.

The first traditional bed and breakfast inn, Oakridge Manor B & B opened in 2004 with four rooms and they've since added a fifth. Mary's Bed and Breakfast in Herrin opened in 2008 with two rooms and Jasones Bed and Breakfast in Marion opened with five rooms in 2010.

The county also saw its first legal vacation rental, the Carriage House open down at the Lake of Egypt in 2008. Regrettably, there are at least two more on the north side of the county line down at the lake that aren't legal having failed to pay the county any bed tax.

Overall specialty lodging has gone from 1/10th of one percent to about 1.3 percent of the market in the last decade.

A Missed Opportunity

Regrettably in August the county board voted to eliminate the county's 3 percent bed tax after the city took over the Pavilion. Far from being next to nothing, the county threw away about $63,000 in economic development funds that could have been spent on brick and mortar tourism development projects in the county. The tax affected 10 properties, including two modern motels, four older motels, two properties with 10 cabins, two bed and breakfast inns and one vacation rental.

Potential development projects could have included a system of tourism highway signage on county highways and roads to compliment what's already on the state highway system, interpretive signage at county historic sites, capital funding for repairs to public and non-profit tourism sites, capital funding for the proposed tourist information center next to the chamber office, engineering costs for development of bike trails connecting to the Tunnel Hill State Trail, or proposed bike trails in Crab Orchard National Wildlife Refuge, and matching funds for larger state and federal development grants.

The 3 percent county bed tax had been added to pay for the Pavilion, a big capital project that was originally proposed to help tourism development. When the city took that over, the money should have been moved to something similar. Although the bed tax is collected by local lodging operators it's paid by out-of-town visitors. Lowering the bed tax rate doesn't attract any more visitors to the area, it just throws away thousands of dollars that would have been coming to the county but now won't.

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