Jefferson City occupancy rates increase

One hotelier has withdrawn its bid for a conference center, citing, among other reasons, concerns about hotel occupancy and average daily rates of the Jefferson City market.

But those rates are on the rise and the city’s occupancy levels are on par with those in much larger markets.

On Monday, the city announced the Drury Development Company had decided to withdraw its bid for a conference center, less than a week before developers were expected to make public presentations on their concepts.

Three developers had submitted proposals for a conference center, which will be funded by a voter-approved lodging tax that is estimated to allow for a $9 million facility.

• Ehrhardt Hospitality Group, based in Hannibal, has proposed the facility at the West McCarty Street site;

• Drury Development Company, based in St. Louis, submitted a proposal for the West McCarty Street site, the old Missouri State Penitentiary site or any other site that meets city requirements;

• Farmer Holding Company, a local developer, has proposed the facility at its recently purchased Capital Mall.

In a letter to City Administrator Nathan Nickolaus dated Friday, Larry W. Hasselfeld, senior vice president and chief financial officer of Drury Development Corporation, noted “the occupancy and average daily rate of the current hotel market is a concern for the quality new hotel development that should occur in Jefferson City.”

But occupancy rates are up by 19 percent in Jefferson City compared with 2012 as of April, and average daily rates offered by hotels have increased by 3.3 percent in that same period.

The rate information is provided by Smith Travel Research STAR reports, which are the industry standard in tracking hotel data worldwide. The data provided is not 100 percent accurate because one hotel in the area, the Truman Hotel and Conference Center, does not participate in reporting occupancy, rates and revenue information.

Diane Gillespie, executive director of the Jefferson City Convention and Visitor’s Bureau, said she didn’t think there was any particular reason why occupancy has increased, but noted it likely is due to the overall economic recovery nationwide.

“There is more travel happening,” Gillespie said. “It’s headed in the right direction and we’re feeling it with the occupancy numbers.”

Gillespie said, in speaking with local hoteliers, there is an optimism that the upward trend will continue throughout the rest of the year.

According to the April STAR report, the statewide average of occupancy rates is 56.8 percent with average daily rates at $86.11.

According to the company’s website, Drury Hotels operate in 12 Missouri cities, with 20 hotels in St. Louis alone. According to the April STAR report, occupancy rates in St. Louis are at 65.7 percent, while Jefferson City’s rates are at 64.1 percent. The average daily rate for St. Louis hotels is higher, however, at an average of $92.77 compared with Jefferson City’s average of $69.58.

In Kansas City, where Drury operates six hotels, occupancy rates are at 61.6 percent with average daily rates at $89.39.

In Columbia, where Drury operates one hotel, occupancy rates are at 64.5 percent with average daily rates at $77.07. In Springfield, where Drury operates one hotel, occupancy rates are at 53.3 percent with average daily rates at $73.37.

“When you look at our numbers, we’re right on to where their other hotels are,” Gillespie said.

She said Drury may have gone back and looked at the past history of what the city has generated in occupancy and daily rates, but while they may have valid concerns, the hotel chain does not currently operate in this market and does not truly understand it.

“You have to look at what is going on in the city,” Gillespie said. “The other two companies (Ehrhardt and Farmer) are in this market, and they see what is going on.”

“(Drury is) not in this community. They don’t know the community.”

Representatives from Drury Development Corporation declined to comment.

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