More rooms at the inn/Hotel building surge means more rooms to fill

When the Executive Inn Rivermont closed in June 2008, Owensboro was faced with a shortage of hotel rooms.

It became hard to land big state conventions or big sporting events.

The number of hotel rooms plunged to slightly more than 700.

At the end of 2018, the number was back to just under 1,300 — with another 200-plus on the way.

The past five years have seen a surge in the construction of new hotels in Owensboro.

— In January 2014, the 150-room Hampton Inn & Suites Owensboro Downtown/Waterfront opened.

— In April 2015, the 120-room Holiday Inn Owensboro Riverfront became downtown’s second hotel.

— In November 2018, the 63-room Best Western Plus opened on Goetz Drive off south Frederica Street.

— This spring, the 102-room TownePlace Suites by Marriott is scheduled to open in Gateway Commons on Owensboro’s east side.

— And Matt Hayden and Jack Wells seem to be getting closer to breaking ground for their still-unnamed hotel across West Second Street from the Owensboro Convention Center.

Preliminary plans show an 80,000-square-foot, seven-story hotel on the northwest corner of the block and an almost 600,000-square-foot, 12-story L-shaped apartment-parking garage complex adjacent to it.

They’re talking about 120 hotel rooms and 160 to 210 apartments there.

That would be a total of 555 new hotel rooms in the past five years.

Those five new hotels replaced the Executive Inn.

That hotel began with 600 rooms in the late 1970s. But by the time it closed, it was down to about 260.

For the Owensboro-Daviess County Convention & Visitors Bureau, more hotel rooms mean the city can accommodate more large conventions and sporting events.

It also means more work to fill those new beds.

“Our challenge is always to fill more hotel rooms,” Mark Calitri, the CVB’s president, said recently.

But the rooms need to be filled 365 days a year — even when there are no major conventions or tournaments.

The CVB is funded by a 3 percent tax on motel room rentals.

Its revenue is expected to top $700,000 this year.

Occupancy rates over the past five years have remained virtually unchanged — ranging between 53.5 percent and 56.5 percent.

Last year, the rate was 54.3 percent.

But hotel income has continued to rise because of higher room rates.

In 2014, local hotels took in $20.7 million. Last year, hotel revenues rose to $25.015 million.

Nightly room rates rose from $82.82 to $92.53 during those five years.

But occupancy rates have been looking better in recent months.

In October, the CVB said, the occupancy rate jumped from 54.8 percent a year earlier to 67 percent.

November was up from 49 percent to 54.2 percent.

December went from 39.2 percent to 40.7 percent

And January hit 47 percent — up from 39.2 percent.

2019 to be better

There’s every reason to expect 2019 to be better than 2018, Calitri said recently.

Daviess Fiscal Court recently brought Joe Veneto, chief experience officer of Veneto Collaboratory, to town to “assess the tourism landscape and uncover development opportunities,” he said.

Veneto’s report said, “There are so many green shoots coming up in Owensboro and you have an amazing opportunity here. The anchor attractions bluegrass, bourbon and barbecue provide a nice centerpiece to build on.”

Calitri said this will be the first full year O.Z. Tyler Distillery has been on the Kentucky Bourbon Trail.

Owensboro is now the western entrance to the trail, which draws roughly 1 million visitors a year.

This will also be the first full year the Bluegrass Music Hall of Fame & Museum has been open.

The Hall of Fame’s annual ROMP bluegrass festival in June has been drawing more than 25,000 fans from around the world each year.

Weekly performances at the Hall of Fame are also drawing visitors to the community, Calitri said.

And a company called Brand USA is promoting Owensboro internationally as one of the nation’s Top 10 music cities.

“Brand USA launched an international ‘Hear the Music’ campaign in March that will promote tourism worldwide encouraging authentic American experiences,” Calitri said.

Their Top 10 list of music destinations include Owensboro, Austin, Detroit, Miami, Las Vegas, Minnesota, Mississippi, Chicago, New Orleans and West Hollywood, California.

“Brand USA’s international campaign is valuable to Owensboro because Brand USA’s marketing expertise reaches millions of new visitors throughout the world,” Calitri said. “You just can’t buy that type of national and international exposure and we are going to capitalize on it.”

Claude Bacon, vice president of sales, e-commerce and administration for Owensboro-based LinGate Hospitality, which operates the Holiday Inn and Courtyard by Marriott, said 2018 had “positive momentum” for those hotels.

“We see that positive momentum continuing in 2019,” he said.

But Bacon said, “New hotel supply in the market could affect occupancy rates.”

Laura Alexander, general manager of the convention center, said her staff and the CVB staff are “working together daily to bring large conventions to town that provide an economic impact to the community. Much of the business that we are working on today will not actualize until two or three years down the road. We are very excited about the future.”

Kyle Aud, CVB board chairman, said he believes “the next few years will be positive for the CVB, which really means good news for Owensboro and Daviess County.”

Last year, the CVB brought in Pinnacle Indoor Sports of Louisville for a study of the community’s needs for sports facilities.

The study recommended that the infields of the four diamonds at Jack C. Fisher Park be replaced with artificial turf and that a 60,000-square-foot indoor sports facility be built in either central Owensboro or on the east side of town.

The city is close to approving a $3 million upgrade of the ball fields at Fisher Park. But nothing has been said about an indoor sports complex.

Still, the CVB is lining up more sporting events.

Last year, the agency bid $1,000 for a package of 2A high school tournaments that included the state boys and girls basketball tournaments and agreed to absorb any losses.

The 2A tournaments are for schools that are too large for the All ‘A’ Classic, but have fewer than 1,000 students.

In January, eight boys teams and eight girls teams from across the state advanced to the state basketball tournament in Owensboro.

Bad weather held down the crowd and the event lost $8,760. But Aud called that money a good investment.

“From a mission standpoint, we filled every hotel in town that weekend,” he said. “And we’ll get the 3 percent tax on each of the rooms.”

Jared Bratcher, the CVB’s sports marketing director, estimated that the tournament had at least a $500,000 economic impact on the community. That amount is based on a formula the state uses to calculate how much is spent by each person who attends an event.

And he said the 2A package also includes state baseball and softball tournaments in 2020-21 and volleyball and soccer tournaments in 2021-22.

Those will help fill more rooms in both the new hotels and the existing ones.

Occupancy rate

2018 — 54.3 percent

2017 — 54.1 percent

2016– 56.5 percent

2015 — 53.5 percent

2014 — 55.3 percent

2013 — 55.5 percent

Revenue (in millions)

2018 — $25.015

2017 — $24.5

2016 — $24.9

2015 — $22.6

2014 — $20.7

2013 — $16.8

Average daily rate

2018 — $92.53

2017 — $91.52

2016 — $88.99

2015 — $87.27

2014 — $82.82

2013 — $76.13

Messenger-Inquirer article written by Keith Lawrence, 270-691-7301, [email protected]