Hotel and Conference Center "Deal in the Works"

[mgfan]

Ur a tool

[Baby Arm!]

That's WAY to much to read on a message board!

[hickoryhouse]

I don't really know where to start here. If I pissed you off somehow then perhaps you shoulld let me know instead of this....

But I digress. I want to address a few of your points.

quote name='GL2Greatness' timestamp='1343069441' post='654966']

a better comparison would be what is mentioned in the article where Frisco opened a convention center and hotel and their earnings per night at surrounding hotels dropped 10 dollars per night.....again this is not the rate charger per night with more nights sold....the article states that is EARNINGS per room dropping an average of $10 per night....so that is LOSING money VS what was being made before.....sure the actual hotel attached to the convention center might be doing better than that, but the existing hotels in the area (probably paid for and run with private dollars) not relavant are losing earnings on a per room basis because on the nights that new facility is not drawing in NEW business that new facility is competiting with existing hotels for existing business

/quote]

I know this was not addressed to me personally but I have a bit of experience in this matter that I wanted to share with you. Years ago I worked at a very nice hotel in Downtown Dallas and for many years we were the best game around. It didn't take long until a similar property to ourselves, with more rooms and some unbelievable expanded amenities was opened. For the first 6 - 9 months we took a hit, our occupancy dropped, our rates dropped in response to that and we had to make some opperational changes as well as changes in our marketing strategy etc. My point is that after time the rates crept back up, the new place leveled off like all things will and a healthy competition emerged between the two properties. The new place forced us to step our game up a bit and in retrospect I am actually happy we had those lean months, they forced us to get better.

I think that we need some clarification on a few of the terms and comparisons that you were making. You started talking about RevPAR seemed to be going off a $55 rate for the Denton Hotels (DH) and keep quoting a $145 RevPAR for the proposed Convention Center Hotel (CCH)

quote name='GL2Greatness' timestamp='1343069441' post='654966']

and also while it is true I listed high end properties for the most part......in your failed attempt to win even a single point you miss out on the concept that I am quoting revpar for HIGH END properties in a huge market with a large convention and business presence......and yet those single property revpars for HIGH END and very high end properties next to and very close to major convention facilities and business centers.....are still not close to being as high as what the denton property hopes to achieve which is $145 per room

/quote]

But as you read the article it makes no mention of RevPAR, which has been a cornerstone of your argument from the beginning. As I read the article what I hear it discussing is ADR, or Average Daily Rate, not RevPAR, Revenue Per Available Room. This makes a large difference in the conversation.

quote - Article]

They were skeptical that, even for what would be the city’s only full-service hotel, the projected average daily earnings of about $145 per room was realistic. Currently, Denton area hotels are earning about $55 per room.

/quote]

If you were to find the RevPAR for most limited service properties you would find a remakebly low number, this is ok because as you mentioned there is less overhead, less labor, less electricity less F&B costs etc. the CPOR (Cost Per Occupied Room) for a limited service property is significantly lower than for a full service property, for obvious reasons. There will of course be competition between the CCH and DH for occupancy and rate but that is to be expected and that is part of the business.

You seem to want to base a large protion of your argument on RevPAR and while a very improtant statistic there are other improtant factors to concider, When I get to your RevPAR rant I will explain further.

quote name='GL2Greatness' timestamp='1343069441' post='654966']

how is an owner suppose to renovate a hotel that is less than three years old and why would they.....much less three of them especially when they are new and the busineess does not warrant it

/quote]

Renovation may not be needed for the three hoteliers that were represented in the article, how about the other 20 hoteliers that were not in the meeting and did not make time to go have their voices heard. perhaps they need a renovation?

quote Article]

Helm, Jariwala and Patel said that, although about 20 other hoteliers in the city didn’t come to the meeting, they knew them to be concerned about the convention center hotel, too.

/quote]

The other hoteliers coulnd' t make the time to attend a hearing about the future of their business, especially strange if they are in such dire times as the three represented in the article say. That seems a bit odd to me but perhaps they were busy with other items of more importance. It seems to me that if they have a chance to get their voices heard about such and crucial subject they might show up.But once again, I am getting off topic.

You went on and on about how a rennovation was a rediculous thing for a 3 year old hotel and how ludicrous it is that someone would even bring up the subject...

quote name='GL2Greatness' timestamp='1343069441' post='654966']

how is an owner suppose to renovate a hotel that is less than three years old and why would they.....much less three of them especially when they are new and the busineess does not warrant it

.......................

these people MADE THE INVESTMENT even when at least one of them knew the market was already going down fast because he had already spent so much time and money that it would have been worse to walk away.....and now your answer to that market reality is add more hotel rooms and they should renovate or invest more money.......you must be a wonderful business person and investor......for those wishing to lose a great deal of money

/quote]

Perhaps you forgot to finish the rest of the 1 scentence in my entire post that the topic of rennovation was broached:

quote Hickoryhouse]

The other hoteliers are going to have to to do what every other market is doing, rennovate, change or compete in some other way. Progress is not made by trying to be fair to those already in business.

/quote]

My point is that while renovation might not be an option for the three new hotels perhaps it is for the other 20 hotels not represented in this article. As I mentioned in this quote and various other times in the post new competition is not a reason to crater as a hotel, these places need to evolve, adapt, change. Look for new revenue streams, differentiate themselves from the competition. It has to be done in every business and the hotel space is no different.

btw, industry standard for full service properties is to renovate every 7-9 years. It used to be every 4-6 years but many "market realities" as you put it prevent that.

quote name='GL2Greatness' timestamp='1343069441' post='654966']

then you go on to say that there are tons of things going on in Denton right now.....EXACTLY.....and when the new convention center opens.....the places that USED TO GET THE BUSINESS......will now lose that business to the new convention center......that is not building new business that is canabilizing business from existing businesses......which is why the USA hospitality, restaurant, retail, and property development business is a total disaster......because one thing canabilizes business from another and people like you respond with "well invest more and renovate"........yea brilliant idea ignore the fact that the actual business you are going after is in decline be it restaurant diners, the convention business, big box retailers, casino gamblers, high price condo buyers......ignore that all those clients are tapped out or having their needs more than met....just go out there and renovate or build bigger or newer and steal that business right back....then it can be the other guy that is "stagnant" with a 2 or 3 year ld hotel or convention center or strip shop or mall or casino that can eat shit....except over time it gets to the point that everyone has "new" and everyone has the sam amenities and everyone has the same size facilities.....and then you ALL eat shit because there is simply too many comparable things competiting for the same total overall business

400 new restaurants built yesterday with big name chefs running them will all go broke if they are in the market for 400 total diners.....that is just a simple fact....it does not matter if they all renovate and expand every day.....because at the end of the day only a dolt thinks that renovating and expanding and building new service industry things creates a new market and more overall business

/quote]

Your point here is understood but I philosophically disagree with your premise. the idea the a new place will take business away from someplace that "used to get the business" is called competition and it is healthy in most places. The reason that the city was holding hearings on the subject was figure out if they should procede or not, it isn't a free for all, the city is trying to determine if the new competition is good for the city or not. Just because the DH were already there doesn't mean that building the CCH is a bad idea either, the CCH idoes not mean that all the DH will close their doors, much to the contrary. You seem to feel that the amount of business in town is a constant, but that doesn't make sense. The new CCH brings with it new life and new businesa for the entire area, not just the CCH. Your line of vitriol directed at me addressed the idea I presented of SMERF business but you neglected to think about the ways that the new space increases this line of revenue.

quote Hickoryhouse]

Denton is in a good place to have a hotel convention center of this type, not to big and not to small. It is the right size for drive in conferences, weddings from all over the area, SMERF (Social, Military, Education, Religous and Fraternal) business from all over the area will be a huge target and being in Denton not the higher priced Grapevine I think it will be a huge attraction.

/quote]

You were right, we already do have weddings in Denton, now we have a place for nicer ones, bigger ones, out of town ones etc. We don't have much convention business though and it seems to me that a North Texas Convention Center is just the thing to bring in groups form as far north as Oklahoma and throughout all of the small towns and communities throughout North Texas. Additionally, the appeal fo being in a nice location and a a non-Grapevine price point will be appealing to many of the drive in events that I have worked with over the years. Infact you convienently neglected to mention that in the article you referenced they discuss the benefits of the Convention Center and the trends that are leading mid sized cities such as Denton to build them:

quote Article]

Cities that build convention centers without an attached hotel are having a much harder time in the convention business, according to Kim Phillips, vice president for the Denton Convention and Visitors Bureau.

The bureau has prepared several reports for the city showing that the lack of facilities has cost the city business. From 2006 to 2012, Denton was in talks for about $20 million in convention and conference business that went elsewhere, Phillips said. In addition, there are about 2,000 expos and state association conventions each year that the bureau hasn’t even approached because there is no way to accommodate them, she said.

Big cities, such as Dallas, San Francisco and New York City, are hurting from a nationwide trend that sees larger conventions saving costs by having more smaller, regional meetings. But that trend creates opportunities for cities like Denton that would never have been able to compete before, Phillips said.

/quote]

You say that there is no "New Business" however the CVB seems to think otherwise. Do you think that those three hoteliers that were in attendance would have liked to have had a shot at some of the $20,000,000 that went elsewhere? What about having a shot at the 200 expos and state association conventions that never even looked at Denton. There are always convention goers and wedding guests that prefer a lower cost lodging option and these guys with their new limited service properties are first in line for that "new business" and they should be excited to take a stab at any additional business that they are creative enough to drum up.

Smaller regional meetings are the new trend according to the CVB, that seems like a perfect market for Denton to try to bite into and that would be entirely new business. I mention SMERF business again, I feel that will be the main attraction the the CCH, all fo that will be "new Business". SMERF (Social, Military, Education, Religous and Fraternal) represents huge potential guest and customers for all of the Denton area businesses not just the hotels. Many of these guests are on vacation and like to take in a little of the local flavor and enjoy themselves after the conference or event, at least in my experience.

quote name='GL2Greatness' timestamp='1343069441' post='654966']

and as for REVPAR....it is just that REVENUE PER AVAILABLE ROOM TO THE HOTEL......priceline, orbits.....none of that matters....REVPAR is the revenue per available room per night for the hotel.....that includes occupancy rates.....it takes into account fees paid to outside booking companies, it takes into account rack rate VS discounted rate.....it is the REVENUE PER ROOM....the actual money coming into the hotel that they can use to pay their bills....it is THE industry standard for calculating the profit and loss on a per roombasis of a hotel........because it takes into account occupancy, number of rooms, discounts, big nights when bookings allow for higher rates.....and nights when the hotel is empty......that is whay that number has meaning.......because it shows just what dollar amount each room produces after all the other BS is cleared out of the way

/quote]

Probably my favorite part of all. RevPAR describes itself in its name, and perhaps we are arguing the same point but I just can't tell. The formula for RevPAR is Revenue Per Available Room. All revenue derived from the sale of the room, and only that (no minibar, in room movies, bar tabs etc) prior to expenses is used in the calculation. This includes money obtained from 3rd party sites, groups, internet booking, walk ups... all of it. I have been in the business for many years and you are right it is ONE of the industry standards used for calculating profit and loss for a hotel. CPOR (Cost Per Occupied Rom), ADR (Average Daily Rate), NOI (Net Opperating Income), PDA (Projected Demand Analysis), LTV (Loan To Value), and REO (Real Estate Owned) are just a few of the many many many other metrics used by hotels and others when making decisions before during and during the constrution and after opening to ensure a profitable business. RevPAR is a valuable number but without context it is almost pointless.

quote name='GL2Greatness' timestamp='1343069441' post='654966']

so giving this hotel all the benefits of a doubt that it will pull in $100 per night, that it can get 350 beds for 60 million (when they are saying 318 beds in the article I linked) that it can sell 50% of the rooms every night and that it can operate with extremely low overhead and employee cost and a very small profit margin and extremely low interest rates.....it is still quite a stretch to think that facility with the sole "it exist" will generate enough NEW business to the Denton hotel market to not steal business from other properties or to lower the average room rate or both

/quote]

Your following post discusses the financial "realities" of this new property but in your lengthy disertation, of which I thought the final paragraph concluded nicely (quoted above), is leaving out several very important factors while coming to your conclusion. First of which, you have to get past this "new Business" thing. Competition is a part of life and a part of business, the new building as I have already discussed will bring in "New Business" to Denton, it is up to the competitors in the market to determine who gets what. This has nothing to do with canabilizing business because the numbers just don't bare that out, eg $20,000000 in lost business over the past 5 years and 2,000 expos and statewide conventions that never even gave Denton a look.

Additionally, you described how the money will flow in a vacuum with no changes, you forgot that business does not exist in a vacuum. Hotels subsist on additional revenue streams such as F&B, Phone, Parking, Movies, Spa treatments etc. The mere existance of these items is why you cannot judge a situation in the hotel space with merely a RevPAR number and a calculator. Dont' forget about inflation either, how about the value of the land that the buildings are sitting on? perhaps in 20 years a 2,000000 note won't look so bad.

As for lowering ADR for all hotels involved, that remains to be seen, but remember my story about the new hotel that was competeing with my building? In the end what needed to happen did, the market corrected itself. The point that I want to make out of all of this is that business is not owned by someone just because they were there first. IF someone comes along and tries to steal your business then you ahve to find a way to combat that, evolve, change and grow with your business. The city of Denton needs a convention center, regional meetings are growing in popularity and low priced options such as Denton, when compared to Dallas, look to be the beneficiary that trend. there is evidence that points out that with out the hotel the convention center is more likely to fail so the city is doing something about it, or at least looking into it.

Don't be afraid of change, it is inevitable and sometimes, if you work with it, it can be awesome.

Edited July 24, 2012 by hickoryhouse

[PlummMeanGreen]

Again...and for the doubter let its message sink deep inside your obvious gray matter.

When the Promise-Keepers group had a 3 or 4 day convention in Denton (and as I recall) they were allowed to use dorms from both universities for housing that were apparently empty for that time of year. When this hotel is built I believe it could cause other motel/hotels to trickle onto the Denton horizon. Also, the Alliance area (I35-W) motel/hotels are only 15 minutes from Apogee Stadium so not quite sure why they are not being figured into the equation after reading a few posts on this subject.

Recalling one photo of the P-K's event they had 35,000 plus inside Fouts Field for one of their events in all the seats and in chairs on the field. Denton seemed to handle their large crowd quite well,

The 2 Real Deal-Makers For Some Convention Similar To Promise-Keepers? This new UNT/Denton Covention Center/Hotel will still have access to a 31,000 outdoor venue (35,000 with seating on the field) and a 10,000 seat indoor venue within walking distance so I would see that as a positive for Denton. In fact, how many other Texas cities convention centers can tout 2 such large venues within walking distance from their own convention venues?

Now I may be wrong, but any one group who can bring 35,000 into a city's sports venue for a 3 or 4 day meeting is a pretty good sized convention even for cities the size of Fort Worth, Dallas or Houston.

This is a smart thing for Denton and UNT to form a partnership. Next thing you would need is somone with the skills to book small or medium sized conventions and hope for more like the Promise-Keeper's group.

GMG!

Edited July 24, 2012 by PlummMeanGreen

[hickoryhouse]

too long..... sorry

[GL2Greatness]

to hickotyhouse

I don't doubt that in a particular market a hotel renovating can make it competitive with a newer property

but what you seem not to get is the three hotel owners that had the meeting are the three owners of the newest hotels in town and they are the three owners of the hotels in town that are at the highest service level of any of the current properties in town.....and they are struggling......so saying that the way to help them or any of the other hotel owners in town is for the other 20+ hotel owners in town to spend money to renovate makes no sense.....because the owners of the three newest and nicest hotels in twon are struggling.....they are struggling with BOTH low occupancy and with low room rates......so they are either losing out to other hotels in town (that are also 50% full as the article states) based on price or based on location....which means the other hotel owners in town again should probably not renovate because they would then not be competitive on price

and yes you have a point that lower end and crappy properties can drive down the rates on average, but the higher end properties in Denton with the highest levels of amenities in town should be at the top of the room rates correct......and yet all three of those properties are the ones that are struggling and they are the ones that showed up to the meeting......so how will it benefit other hotel owners to renovate, raise their rates, and then still lose money if not more money when they lose the price advantage.....because as of now the three newest and highest amenity level properties in town are struggling because of low occupancy and low room rates......which shows no reason or incentive for others to spend more money on their properties

and as I showed in the REVPARs for individual hotels in dallas property even extremely high end properties the $145 a night is not realistic at all for any property in the metroplex.......because some of the nicest hotels in dallas are not coming close to that

and as I showed with basic math above the new hotel at 60 million for 350 beds would need an occupancy of 50%+ and at $75 dollars plus just to come close to hoping to make a profit

and any way you slice that 50% of 350 rooms over 365 days a year is 63,875 visitors per year

any less than 50% and you would need even higher room rates.....room rates that would be higher than many of the highest end properties in dallas are dealing with and even if 20 other junk properties in Denton are dragging down the average for the three new properties in town.....the CCH would still need a room rate higher than those three new properties while being only 50% full every night of the year and to do that is still almost 64K new visitors per year........if any of those 64K visitors are not new visitors to Denton then they will be visitors taken from existing properties and since the people staying at the new hotel would be paying a very high rate well over the average rate in Denton and surely over the average rate for the three other new properties only a slight level below it would make sense to suggest that would be business lost by those three new hotels because the people staying at the CCH instead of at some other property are willing to pay a high rate...they were not price sensitive guest they were the exact existing guest that the three new hotels are hoping to lure in that would instead be lured away by the CCH

again I showed with the basic math that to even come close to breaking even and staying relevant the new property needs to either be 50%+ full at $72.50 per hight or it needs to be even more full at a lesser rate or less full at an even higher rate

and while it is easy to toss out what DJ Plum Plum is talking about.....a SINGLE EVENT that does not even come yearly that takes up beds for 3-5 nights out of a YEAR....that does not pay a hotels bills and even if the event brought in one MILLION people for three nights the fact is that you can't go around building hotels for events that happen for three nights per year much less ones that happen three nights per year not even every year.....that is how you end up withn a ton of hotels empty and broke

you need to look at the number of guest every single night of the year, what you can get from them, and how many nights you can get them and work that into the number of hotel beds in the area/market

and for the CCH to come close to doing anything that would remotely pay the bills and deliver any type of profit that would need to be nearly 64K NEW visitors over a year period paying somewhere over $72.50 per night as I showed before

and since not one, but three of the newest and highest amenity level properties in Denton are struggling to make it there does not seem to be a reason to think that a new CCH would compete without taking guest from those properties unless someone can show how that hew facility would contribute 64K NEW guest per year and not all those guest in a single weekend spilling well out of the market and staying all over the metro area.....because again hotels don't expand and contract based on how many people are in town on a given weekend and while they do have proice flexability it is not like they can charge $1,000 because they are the closest hotels and people will just ignore the gouging and suck it up and stay there while the price sensitive people go to south dallas to stay at $15 per night

so this facility will not need to bring in one single home run or two home runs or even 5 home run events with millions of people......it will need to bring in events every week week in and week out of 350+ people and then when it does not have an event that week it will either need to sit empty or the next week it will need to bring in enough people to an event that will make up to the other hotels in town for the guest it had while there was not an event (existing market guest) or it will need to do enough guest that are willing to pay a high enough rate that it will make up that canabilized business......and that is the type of room rate that would start making the Denton market non-competitive with the very high end properties all over the metro area

and as the article stated the government pays $77 per room night max......so there is one rate point set right there and surely other busiess men and convention planners are not just going to ignore the market rates all over the DFW area at comparable or even higher end properties and spend more to come to Denton

so as we can see the three nicest hotels curently in Denton with what should be the highest room rates are struggling with both price and occupancy......and we can see that a single event a year or even 5 events per year or even 10 events per yearat three nights per event of extremely high prices is not goign to do it.......because there is still 335 other nights in the year and because at some point those extremely high prices are not going to be competitive

and as shown before for the new CCH to come close to doing anything it will already need nearly 64K guest per year at al already high rate just to come clsoe to paying the bills

if it gets an event of 35K people for 5 nights and it can charge $1,000 per night while others stay on dorms ect it will still only have 350 rooms to offer and even if those guest are willing to pay $1,000 per night that is only 69 room nights average at $72.5 and that means there are 296 more room nights left in the year to attract 175 guest per night at $72.5 per night.....because attracting less than that in NEW guest means the CCH will either struggle to pay the bills or it will pull guest from the exsiting properties

and some people might say screw those other properties, but when they (and the other 20 hotels in town that are already not renovating) can't keep renovating or can't stay open eventually the number of local rooms of any decent quality declines to a point that you can't attract even the few home run events because of lack of available decent rooms because those rooms have fallen into disrepair.......and when you start losing those events....your CCH starts falling into disrepair

you can't rely on other hotels in town to provide quality guest nights on one hand to land the big events and then on the other hand when there are no big events say screw them I need the business here to keep the lights on and cut the price

and when your new CCH needs 63,845 guest per year at $72.5 per night to stay HALF full and to come close to servicing the debt, covering the light bills, paying the employees, and making a profit and it only has 350 beds a single event or even 10 events is not going to provide that because that facility can only see 350 beds a night

Edited July 24, 2012 by GL2Greatness

[UNT90]

thank you for at least taking the time to read and try and understand

http://www.dentonrc.com/local-news/local-news-headlines/20120721-hoteliers-warn-market-glutted.ece

but as the article mentions all three of those properties are under 3 years old and they are all major chain properties with at least a very slight upscale amenity level over say a Motel 6 or a Super 8

also as the article states the new hotel and convention center is projecting $145 per night which is $20 dollars over what the Gaylord can charge and the Gaylord is charging over 2X the average revpar of the downtown and uptown dallas hotels

and I agree there is a difference between an Embassy Suits and a Gaylord or similar facility, but the Embassy Suites will be the facility that will be competiting for the business that the Hiltons and all the other major chain hotels surrounding the DFW airport are competiting for.....and that is the business of sales groups for major national companies that have monthly or bi-monthly sales meetings where 20-100 people fly in, stay a night or two, meet for 9-10 hours per day and rarely if ever leave the property if at all.....meals are catered in the conference rooms or dining is in the hotel restaurant

there is very little convention business that is looking for a 350 room facility, 25+ miles from a major airport with few if any amenities located on site or within walking distance or an easy drive away especially with the still limited service that a traditional Embassy Suites or similar property would offer on site

there is simply nothing to attract sales meetings or the like that are the life blood of a 350 room property away from the numerous similar sized and even larger properties that surround DFW currently

and there is simply nothing attractive about a 350 room property with an Embassy Suites level property with no surrounding amenities within easy driving or walking distance to attract a larger convnetion that will have spillover to other Denton properties when it brings in that new business

so the Denton property will not be attractive over many existing options for smaller meetings or even smaller conventions and it will not be attractive to larger conventions.....and for the price desired of $145 a night there is no way it will be financially competitive with the existing options even if it had all the location and amenities that those existing options offer

while Denton may have some crappy hotels and that may be an issue the three owners of 3 year old or less mid-level national chain properties making $55 per room night sold and having trouble paying their mortgage would disagree the answer is to open 350 new rooms that will be at the same level of amenities as their properties or only slightly higher even with a convention center attached....because they know that convention center will not bring in enough business over the period of a year to make up for the rooms lost when that convention center is bringing in no new business and it is competiting with their three new hotels...and when you add in the new hotel projects $145 per night.....there will either be an issue of the hotel not making their revenue, or they will drastically lower those rates and pull business from existing hotels.....and they will be doing so with the aid of the draw of a convention center funded with room taxes on the backs of those privately funded hotels

Please, please, please tell me you are not a gun owner and don't live close to a major entertainment center.

Wait, of course your not. The felony stalking conviction took away that right, correct?

[MDH]

I'm starting to feel honored that UNT has a troll that spends so much time with us here on GMG.

[MeanGreenDan]

Somebody get this guy a job. Or a girlfriend.

[GrayEagle]

I've given +1s to anyone who has taken the time to read that drivel and wish that I could give another to any that respond. I hope that Harry isn't having to pay extra band width for his posts.

Edited July 24, 2012 by GrayEagle

[Grant.UNT]

Even if a conference isn't directly a UNT event, the university also has spin-off business. For example, many professions at UNT have professional associations (advising, registrar, admissions, counseling, and each discipline on campus as well) that have state, regional, and national conferences. You can't try to host one of these if there isn't space or a hotel.

And speaking of the hotel, UNT, TWU, and Denton all need a fancier hotel option for out of town guests. When higher profile speakers come to UNT, they don't have a place to stay in Denton.

the Holiday Lodge is on 380. What more do you need? Then, you could just walk to get BBQ. WINNING!

[MeanGreen61]

Somebody get this guy a job. Or a girlfriend.

Get him a goat.

[GreenMachine]

Get him a goat.

He would quickly annoy the hell out of the goat and cause it to run off.

[mgfan]

I dont read his post, but get the feeling he has no life...... None.

[GrandGreen]

No major hotel or investment group is going to invest $60 much less $60m in anything they don't think will render a good return on their investment. Now a municipality or university is a different thing, there is a big chance that they will be taken advantage of on the deal. Just look at almost any publically financed facility's deals. The pro teams or hotels usually make money and seldom lose anything, and the public is fed vague and misleading data about increased local economic activity and enhancements to the visibility of their city.

So occupancy and cost per room rates mean little to NT unless they are actually a partner in the hotel/convention center; which I doubt. The factors that should concern NT are the lease revenues they get and the lost of the land leased and the intrusion into college activities that will occur.

[GL2Greatness]

No major hotel or investment group is going to invest $60 much less $60m in anything they don't think will render a good return on their investment. Now a municipality or university is a different thing, there is a big chance that they will be taken advantage of on the deal. Just look at almost any publically financed facility's deals. The pro teams or hotels usually make money and seldom lose anything, and the public is fed vague and misleading data about increased local economic activity and enhancements to the visibility of their city.

So occupancy and cost per room rates mean little to NT unless they are actually a partner in the hotel/convention center; which I doubt. The factors that should concern NT are the lease revenues they get and the lost of the land leased and the intrusion into college activities that will occur.

actually major investors invest in things all the time that go broke that is why there are bankruptcies

look at Victory Park the whole development went under and several of the condo buildings have gone under....the Stoneleigh Condo project went under.....the "stonehenge" parking garage in the arts district went under and has sat for a decade or more......the museum tower will most likely go under

and it is not an argument that the convention center hotel will necessarily go broke (although there is little chance they will see their expected room rates for many many years) it is the argument that it will cause several other new hotels in Denton to either go under or struggle to remain a nice property and that will not be good overall for Denton and it will play against the convention center overall since the convention center will need more than 350 rooms at the CCH to draw larger conventions and when you are driving three of the newest nicest properties in town out of business or into low or no profits you will suddenly find what many are talking about now which is a city with a bunch of very worn and dated hotels

if the convention center can't attract enough NEW guest to make up for the existing guest it will poach from other properties then it will find itself becoming less and less attactive as Denton struggles to keep mid level and higher properties updated and open to serve the larger groups it hopes to attract with the convention center

the three hotel owners are not saying a convention center will fail (or even that the hotel next to it will fail) but they are saying that it is not fair to tax them to pay for a convention center with 350 new rooms next to it when they do not believe the convention center will draw in enough NEW business to keep both the new convention center hotel open and their hotels open (that do not have the benefit of a convention center right next to them paid for with taxes on all Denton hotels)

the fact that the old hotel in that location that was a Sheraton and then a Radisson and was the most "full service" hotel in Denton struggled for years and years even when the economy was good and while located right across from the university and was ultimately bought back by unT and imploded shows that there is questionable demand for a hotel of that type.......true it did not have a convention center next to it, but it had the best "brand" of any hotel in Denton the entire time it was open with the most "service" and it struggled to stay updated and to make money which is why it is gone now

nothing has changed abuot that location and the only market changes are the fact that the economy is much worse off now than when that hotel was open.....the fact that a football stadium is now on the same side of the freeway is hardly relevant since it is still about the same number of fans showing up to games and it will be the same number of games per year and that Radisson was still the closest "full service" hotel to unT and fouts.....and that was not enough to keep it from not being able to renovate or stay relevant or open

and in this economy I and at least three new hotel owners in Denton do not believe that a convention center will bring in enough business to support 350 new rooms and not steal existing business from existing hotels

the Sheraton/Radisson at the time it was open had some of the largest meeting spaces in Denton and it was not able to leverage that fact into enough profits to stay updated

and at least one company that is in the business of building hotels and convention centers with over 80 in the USA and several in Texas that invested a large amount of money putting together plans (J.Q. Hammons) seems to think that the time is not right for this project and that it is not viable which is why they walked away

the Radisson may not have had a full "convention center", but it was the top "name" property and the top services offered in Denton and it struggled

one can see what they did offer in this photo....that is easily large enough for 150+ people if not more