City of Newton to take part in hotel market study

As the City of Newton continues to make efforts to grow tourism in the community, a hotel market study will assess local needs and give developers research-based evidence to potentially move into the area.

Patek Hospitality Consultants, Inc. was selected by city staff and approved by city council to lead the study. The Sussex, Wis.-based consulting firm was recommended by several hotel developers as a reputable source for future development needs.

“A market study for potential hotel projects is something that has been stated by several hotel developers that we met with and have interest in our market,” city director of finance and development Bryan Friedman said. “We have a solid hotel market but it is not so blazing hot that they are all clamoring to get here and are competing against each other — we have to improve the case.”

Friedman has found when working with developers, they need an independent third party market study to assess the demand and articulate how the project could potentially fit into the market. By conducting the study, potential developers will have the needed information to, among other things, get financing for future projects.

The study is sparked in part by the city’s purchase of the vacant land at the 164 exit on Interstate 80 near Highway 14. Friedman said the area is a prime area for development and has already gained interest from hotel developers.

Patek Hospitality Consultants was selected from a pool of three proposals. The firm was specifically recommended by two hotel developers as an experienced, accurate, value-conscious consultant.

“Based on recommendations from specific hotel companies that it is an outfit that has experience, has worked with the companies before and produces solid, bankable results,” Friedman said.

The proposal is for Patek to analyze the city’s site, provide a market area overview with details on hotel supply and demand, and delineate the projected annual operating results for a new hotel, including occupancy, average daily rate and expenses.

The consulting cost is up to $7,975, payed for using funds from the Southwest TIF District. An added benefit to using Patek is the firms ability to shut down the study if results are not looking favorable for the city.

“Not even to the mid-point of the study, if they determine that it is not going to turn out well for the city, they stop the study, bill for work done, but don’t go through with the whole thing,” Friedman said.

Although that is an option, Friedman is hopeful the study will produce anticipated and much needed results to help the city move forward with new projects.

“We’re optimistic knowing our market has shown grown with increasing hotel/motel tax revenue for multiple years,” Friedman said. “We think that there is room for a new product in our market that won’t just poach off of existing product but will grow the communities hospitality base.”

Contact Jamee A. Pierson at 641-792-3121 ext. 6534 or jpierson@newtondailynews.com