Economy, Travel Slowdown Keeps Hotel Expansion On Hold

April 10, 2002
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GRAND RAPIDS — Within recent memory, a fair amount of speculation has abounded concerning a perceived need for a new top-rate hotel in this community.

But if that was the case at one point, the management of the Amway Grand Plaza Hotel currently is not looking at building a new hotel or revamping another downtown building — or expanding the current Amway Grand either.

"Right now our focus is on marketing what we have existing," said Joe Tomaselli, president of Amway Hotel Corp.

"Needless to say, the travel business has been affected as a result of the slowdown in the economy and the aftermath of Sept. 11, and like everybody else nationwide we've been affected."

Though he said there are some signs the economy is rebounding, Tomaselli also believes there's no telling whether it's going to get permanent traction and keep growing.

So, for now, he said the Amway Grand is focused on rebuilding occupancies, and planning for the future and what the new convention center is going to bring, he said. 

"We have no immediate plans for adding any additional inventory because we're waiting for demand to catch up with existing supply," Tomaselli remarked.

"That doesn't mean we rule anything out for another day but we're waiting for that brighter day to occur and to encourage us."

From Tomaselli's perspective, there's simply not enough demand in the marketplace at this time to support any additional inventory.

The hotel owns an adjacent site downtown that would be "a great premiere site for an addition down the road," he said.

It's just that it's down the road, he said, and the Amway Grand has no immediate plans for developing that site until more business materializes.

"If you can't fill what you already have, it doesn't give you a reason to add anything additional," Tomaselli added.

He said hotel officials will watch market conditions closely and react to any opportunity that might present itself.

They're encouraged by the transformation of the Grand Center into DeVos Place and the opportunities the expanded convention center is going to create for a lot of businesses downtown.

"When that occurs, and we believe it will, we're going to be in a position to react positively.

"But it isn't a prudent business decision to spend money to develop another hotel when in a lot of ways you'd just be cutting another slice of the pie.

"We're encouraged by what we see down the road. We think that in 2004 when the convention center opens we're going to start to see an up-tick in business."

Until that happens, Tomaselli said, Amway Grand officials are taking a wait-and-see attitude. Though guardedly optimistic about the near term, they think the future is bright.

One aspect that seems to keep the future bright is that the hotel just received its 17th consecutive annual 4-diamond rating (see page one story) from AAA of Michigan. No other hotel in Michigan has held the rating anywhere near that long.

Moreover, the hotel's 1913 Room merits its own separate 4-diamond rating; the only case in the state where a hotel and one of its restaurants enjoy that status.

The amount of room nights being booked is already on the increase, he said, and hotel officials see a trend for building in 2004 and 2005.

"We've just got to get through the next couple of years while we're building the convention center and dealing with a soft economy." 

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