Developer shares hotel plans

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June 13, 2017 - 12:00 AM

The developer of a proposed hotel in east Iola spoke in depth about the benefits of bringing a Sleep Inn & Suites franchise to town.
Bill Michaud, who opened a Sleep Inn in Fort Scott in late 2014 “to great success,” told Iola City Council members Monday he wants to bring a development agreement to the Council in the near future.
Michaud is planning to build a $4.5 million, 32,000-square-foot facility. The structure would hold between 55 and 60 guest rooms, depending on the architecture.
“We’d bring everything you expect out of a first-class hotel,” he said, such as free hot breakfasts each morning for guests, a business and meeting center, indoor pool and fitness center.
Sleep Inn differs from Iola’s other motel franchises in that it caters to a different market, Michaud explained.
“I hope to offer services not currently available here, to bring money in off the highway,” he said. “We believe there’s an absolute need.”
Michaud became familiar with Iola after giving a presentation to SEK, Inc., a regional economic development group, about the difficulties of developing high-class hotels in rural areas throughout the region.
He touched base with Thrive Allen County about coming to Iola, but another developer “beat me to the punch last year,” Michaud said. “I thought I missed my shot.”
A separate hotel proposal for the same site — near the U.S. 169 bypass on the east edge of town — fell through last summer.
“When that didn’t work out, the door was opened once again,” Michaud said.
 
MICHAUD pointed to a feasibility study that indicated a town in Iola’s situation could ably support another hotel.
Sleep Inn & Suites is part of the Choice hotel chains, which Michaud told the Register “is a little more expensive” than what guests at Iola’s existing motels would spend.
But the Choice brand “is a driving force for many customers deciding where to stay,” he added.
He pointed to Fort Scott as an example of Sleep Inn adding to the number of clients brought in from out-of-town, and not plying customers away from the other businesses.
He noted Fort Scott’s transient guest tax collections more than doubled from 2014 to 2016, from $63,000 annually in 2014 to $150,000 in 2016.
In the first year of operation, Sleep Inn generated more than 10,500 “room nights” he said.
“Those were new dollars brought to town,” he said.
Iola’s situation is similar, he contended, in that rather than staying at one of Iola’s other hotels, many motorists are passing Iola altogether as they drive by on either of Iola’s two major highways.
He points to his Sleep Inn clientele in Fort Scott.
“Relatively frequently, we have people who say they’re staying in Iola, but saw our reviews so they came to Fort Scott instead,” Michaud told the Register in a separate interview.
Another cost-benefit analysis completed by former Iola banker Steve Robb, who now owns a municipal consulting firm, said a business such as Sleep Inn would bring in $2 million in added benefits to Iola within a 10-year period, $540,000 in new property taxes, $1.4 million in transient guest and sales taxes and $81,000 in utilities and franchise fees
Michaud also pledged to hire local contractors “whenever possible” to help with the hotel’s construction. He expected the hotel to maintain a staff of 10 to 12, when it’s up and going.
 Meanwhile, the owner of Sharky’s Pub and Grub restaurants in Fort Scott, Nevada, Mo., and soon in Pittsburg, also has an option to buy land adjoining the proposed Sleep Inn site for a similar restaurant in Iola, Michaud noted.
 
TWO AUDIENCE members spoke in opposition to adding a Sleep Inn.
Raul Desai, owner of Iola’s Comfort Inn (the former Best Western), said Iola’s three existing motels are struggling to stay afloat.
Adding another competitor could lead to bankruptcy, Desai said. “We won’t be able to break even.”
“Every year, hundreds of new motels are constructed,” he said. “Within one or two years, many others are bankrupted.”
Desai has had to cut staff already because of slow traffic.
Meanwhile, Iolan Raymond Cooper said he “thinks it’s a shame” a new hotel could hurt the three other hotels “that are already struggling.”
“Our economy can’t do it,” he said, in terms of supporting another hotel.
 
 
 

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