Study Says City Needs New, Expanded Hotels

MINNEAPOLIS-The city has an “overwhelming need” for a new 1,200-room hotel in order to remain competitive in drawing groups to the Minneapolis Convention Center, according to a new study sponsored by the Greater Minneapolis Convention & Visitors Association. The study, conducted by real estate and hospitality consulting firm, Chicago-based CH Johnson, demonstrates how Downtown’s inadequate hotel inventory negatively affects the ability to attract future convention business.

“An expansion of hotel inventory in cities nationwide means that groups are able to assemble housing packages using a minimum number of properties in a proximate distance from a convention center,” says Greg Ortale, president and chief executive officer of the association. In addition, the study says, expansions of existing hotels should be considered–although that alone would not “solve the long-term need,” the study says.

With 1,800 rooms adjacent to the Minneapolis Convention Center and more than 31,000 rooms metro-wide, the city can meet the current needs of most meeting planners. “We need to add more hotel inventory to reflect the growth of the industry–both current and projected,” Ortale says.

There are now 20 Downtown hotels containing 5,101 rooms. Of these rooms, 2,004 are within four blocks or 1,000 feet of the Minneapolis Convention Center. A new Downtown convention hotel will help make the Minneapolis meeting product “more acceptable to meeting planners.” states the study.

The study recommends the new convention hotel be within three blocks from the convention center. Ideally, it would be connected to the convention center, but regardless it must be connected to it by skyway, the study says. The new hotel should have 24-hour room service, 1,000 parking spaces, a 400-seat, three-meals-a-day restaurant, a 180-seat specialty restaurant, a coffee bar and a lobby lounge, a health center and spa and a business center.

The study also states the Minneapolis Convention Center facilities actually justify a total of 1,850 new nearby hotel rooms. But since a single hotel development of that size is not warranted, the level can be achieved with expansions to other nearby hotels plus the proposed new hotel.

In a survey conducted as part of the study, 73% of the respondents stated they would consider holding an event at the Minneapolis Convention Center if a 1,200-room hotel were built adjacent to it. “Minneapolis has the whole product–a world-class convention center, a vibrant Downtown, international air service, a new light rail transit line. Everything except a compressed hotel inventory,” Ortale says.

The next phase of the project will start with the presentation of funding options by a financial consultant hired by Ortale’s organization to be done by the end of the month.