Better Days Checking In

March 28, 2005
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GRAND RAPIDS — At least one major player in the local lodging industry feels the worst is finally over.

Amway Grand Plaza Hotel Corp. President Joseph Tomaselli said the industry hit bottom last year. Tomaselli, whose company owns the Amway Grand Plaza Hotel and the Courtyard by Marriott, two of the three primary downtown hotels, predicted business would be better this year and would even get stronger next year.

“I know from our hotels, we’re up. I expect occupancy to grow three to four points this year,” said Tomaselli, who spoke as a member of the Convention and Arena Authority at the board’s monthly meeting held last week.

Occupancy countywide was 54.6 percent last year, the same as in 2003.

The factor fueling Tomaselli’s optimistic forecast is the convention and tradeshow traffic that DeVos Place is drawing. He noted that total room nights at local hotels in 2004 were up 60 percent from the previous year. The rate didn’t rise, though, because the room inventory grew, as about 150 new rooms were added across the county last year.

“There is no doubt what is responsible for that (growth): It’s the marketing,” he said.

The Convention and Visitors Bureau has a sales and marketing department of 18, with many working to lure associations here. Bureau President Steve Wilson said they’ve added a regional sales strategy to their arsenal, one that targets groups with 300 or fewer members and one that aims to book more than one group for the same dates.

More room nights have been booked so far this year than for all of last year, and almost as many are in the books for next year as are on the books this year. Wilson said the third quarter is usually the slowest for conventions, with August being the slowest of the three months. In contrast, the fourth quarter is the most active, especially during October.

Wilson said Kent County wants to see revenue from the lodging-excise tax grow by 4 percent to 6 percent in the coming years. Receipts from the levy increased by 2.8 percent last year, the first time in four years that revenue from the tax rose.

The size of the new convention center brings the promise of higher tax receipts, not only because larger groups can be accommodated at DeVos Place — which means more delegates making reservations for more hotel rooms — but also because more events can be held at the same time.

SMG general manager Rich MacKeigan said at the old Grand Center, which was half the size of DeVos Place, the building could only host one group at a time, and many associations came here only because they felt obligated to do so.

“Now we can put two, three or four events in the new facility and they want to do business with us,” said MacKeigan.

Just recently DeVos Place hosted the Michigan Reading Association, the Women’s Expo and a motorcycle show on the same weekend.

During the last sport, fishing and RV show produced by Showspan Inc., the Michigan Taxidermist Association had enough space at DeVos Place to exhibit its entire line and hold its annual meeting. When the group exhibited at the Grand Center, MacKeigan said there wasn’t enough room for all the association’s members to attend the meeting.

A bigger convention center, though, also means the city is competing for business against markets in other regions and not just against the traditional rivals of Detroit and Lansing.

Tomaselli, who is the bureau’s representative on the CAA, said Pittsburgh, Milwaukee, Indianapolis, Columbus and Omaha are prime examples of cities that the CVB sales staff has often bumped heads with when they’ve tried to close a deal. And two of those cities have over 400,000 square feet to offer a customer.

But Tomaselli also said not having DeVos Place to offer to groups would likely have resulted in the local hotel occupancy rate sliding backwards instead of holding its own last year, especially during a nationwide lodging-industry slump.

“The competition is tough. Convention planners have more choices,” he said. “We are in a buyer’s market.”    

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