The Minnesota Twins may or may not win the World Series this year, but they’re champions in the hearts of many downtown hotel operators.
The throngs of visitors who’ve been pouring into downtown Minneapolis to see the new Target Field and a high-octane baseball team have also been hastening the recovery for a lodging industry that’s been moribund for most of the last 30 months.
Occupancy in 22 downtown Minneapolis hotels climbed 19.4 percent during the first six months of the year, and the biggest jump came in June, when hotels filled 28 percent more rooms than the same month a year earlier. Not coincidentally, the Twins held first place for the 29 of 30 days of that busy month.
“Target Field has been a tremendous magnet,” said John Buntemeyer, general manager of the Marriott City Center, located just three blocks from the ball park. “Their attendance has far surpassed what they did last year at the Metrodome” - on average, 10,000 more fans are attending each game and the 1.975 million who’ve already passed the turnstiles will soon pass last year’s 2.3 million.
“And people are coming from out of town - from the Dakotas, from all around Minnesota,” Buntemeyer said. ”When the Twins are here for a weekend, we sell out or very close to it.”
It’s not just Twins fans who are making the trek to see the new park, either.
“Teams from this region come to town, from Chicago or Milwaukee, and they bring their fans, too,” according to Tom Mason, general manager at the Radisson Hotel Minneapolis, just across Seventh Street from the Marriott.
Mason and Buntemeyer’s hotels are located almost within view of the new stadium and expected to see a quick benefit.
But the good news Twins are spreading their magic all around downtown, even over to the Comfort Suites Hotel several blocks away.
The Comfort Inn (formerly the Embassy Suites) is the closest hotel to the Metrodome, and for years, it won a large share of the baseball fans who came to town to enjoy the Twins in the climate-controlled Metrodome. General Manager Chris Wroge worried last spring that they’d lose a big piece of that market when the Twins moved to the opposite end of downtown.
But it didn’t happen.
“Our occupancy is up 30 percent over last year,” Wroge said, and Twins visitors make up a big part of that gain.
Wroge said those numbers are driven by the fact that his hotel is still convenient - it’s just a seven block walk directly down 7th Street from Target Field’s gates.
Strategic pricing is also helping. When the bottom fell out of the travel market and Wroge’s summer-long Twins traffic appeared to be at risk, he pushed daily rates down from near $120 to as low as $74. Occupancy increased dramatically, so he started raising rates at $10 increments each month, looking for the point where value and price were in balance. He found it at just below $100.
“We’re getting good occupancy at that rate, but we know we’re not leaving money on the table, either,” Wroge said.
Hotels all over the metro are booking more rooms this year, but the Twins effect and a pickup in corporate travel have boosted downtown Minneapolis’ expansion faster than other submarkets.
Bookings in the St. Paul and east metro hotel markets climbed 8.9 percent in the first half of 2010, and hotels in the west metro (including the downtown cohort) were up 13.7 percent - both well behind downtown’s 19.4 percent hike.
The Twins have fueled much of that expansion, but in addition, Buntemeyer and Mason said they’re both seeing are a turnaround in the business-travel market - the market that provides the lifeblood for most downtown hotels.
“Decline in business travel was way more dramatic than the downturn in leisure travel,” Buntemeyer said. Occupancy in Minneapolis’ downtown market dropped 20.2 percent in the first half of 2009 and RevPAR, or revenue per available room, fell even faster, declining 23 percent from the year before.
“Those numbers looked like it was the end of the world,” Buntemeyer said. But with the economy stirring again, business travelers are back out on the road.
“People are feeling like they’ve got to get out and connect with their customers again,” Mason said.
Occupancy and average daily room rates are still far below the levels they reached in the peak 2005-2007 years, and both Mason and Buntemeyer said those income measures will come back slowly, because of discounted rates hotels locked in with business groups and because of leisure travelers’ new sensitivity to pricing.
But with occupancy up close to 20 percent and the Twins still winning at Target Field, it may not be a full-blown hotel recovery, “but it’s a very nice beginning,” Mason said.
Reported by: Finance and Commerce