A planned $25 million six-story downtown hotel which will include a Starbucks and a 250 seat Keg Steakhouse has some existing city establishments wondering if there is enough business to go around.
Vrancor Development Corp. hopes to start construction by late spring at an Oak St. location.
"Any investment in the community, especially a brand new business, is a good thing," Jake Lacourse told BayToday. "As Chamber of Commerce President I fully support the investment."
But Lacourse admits that could be a problem in a city where the occupancy rate already sits at only 52 percent. It means there is increased competition at the hotel level and may cause some hardship to the smaller existing hotels.
"On any given day there are roughly 350 rooms empty, and that's just in the branded hotels, not including the mom and pop and smaller hotels.
"There may be some threats to existing business, but if they feel threatened they are going to have to change the way they do business to make sure they can retain their clientele."
There is also the possibility some may have to close.
"There are some hotels that have in the past when new inventory came on the market, they've decided to convert to apartment style or monthly rentals, so we have seen that when the Hampton Holiday Inn came on board."
Meanwhile Angela Trudel-Johnson, the general manager of the Best Western in North Bay is worried, and wonders if building a hotel on the North Bay waterfront makes sense.
“Currently, and for the past five year the existing hotels have been running at 52 percent occupancy - this is fact and the city also receives this information,” stated Johnson via Facebook after the news came out late last week.
“They don't care, as it is just another tax base for them. I don't see where it will bring more jobs, except for the build itself.”
Johnson believes the key is trying to find something to bring people to North Bay, not building more hotels that are half empty.
“With the lack of major attractions to bring people and no major industries to bring in corporate clients, then we all get less occupancy,” she stated.
“We need the city to focus on attractions, industries, pull the trigger and get serious on bringing entertainment to the Gardens as promised, yes the casino that will bring back our bus tour business.
“I am all for making things new and beautiful but we have to realize that people have to have a reason for coming here...and what makes us different than competing cities such as Sudbury, Muskoka, and Orillia.”
Johnson says due to the low occupancy already at her hotel, workers are moonlighting.
“I have 77 staff that pay taxes and have to have second jobs to make ends meet because not enough work or hours are available with low occupancy. I lose good staff because they come train and leave the area to where they can make a living.”
Lacourse however, points out that Tourism North Bay's main thrust is increasing tourism in the area. The film industry helps, and there's been an effort to increase sports tourism.
"However another 100 rooms per day in inventory may or may not cause some hotels some hardship for sure."
Lacourse feels that the nature of the business is that you have to innovate, and when you have a certain product and a lot of inventory, with others selling the same product, you have to try and maintain your client base.
And he doesn't feel it will drive prices down, but will instead move market share and create real competitiveness at the bottom end of the accommodation scale.
"You've got decisions to make whether to add value to your existing price or drop your price down but I'm fairly confident that I don't think you are going to see low rates coming out of the new building."
