Fascinating story in today’s Albany Business Review. Unfortunately it is behind a pay wall but here are some of the most salient points. If you can find a way around their pay wall I highly recommend the piece. Link To Story
Bruce Levinsky has told the journal that he has sold the Rip Van Dam hotel to investors who plan to develop the site for a 140 room Hotel Indigo. The venerable old hotel was built one hundred and eighty years ago. The Journal claims it is the last pre-Civil War era hotel in the city.
The reporter interviewed Cindy Hollowood, the general manager of the Holiday Inn. She apparently received a letter from the InterContinental Hotels Group advising her that they had approved the franchise for the new Indigo. That corporation operates over 5,000 hotels and operates a dozen brands in the world.
For decades Ms. Hollowood has been a stalwart advocate for what I would characterize as unrestrained growth and a long time player in the Republican Party. For as long as I can remember, the Republican Party here in the city has run its election eve event at her Holiday Inn. Ms. Hollowood was a founding member of the board of the Saratoga PAC. The PAC has held its events at the Holiday Inn.
For those of us who have viewed with jaundice eyes the sprawl of subdivisions over the last decades there is a certain irony here. That same corporate group proposing the Rip Van Dam development is the parent of the Holiday Inn (her motel brand), The Hotel Indigao, the Holiday Inn Express, and the Crowne Plaza Hotels.
InterContinental sought her comments several weeks ago on the expansion.
There are currently some 2,000 hotel rooms in the city. There are three hotels either under construction or pursuing the rights to build within a mile and a half of Ms. Hollowood’s Motel. A 113 room Hilton is going up on South Broadway. Visions Hotels of Corning is proposing to demolish the Turf and Spa Motel at 176 South Broadway thus replacing an existing facility of 43 rooms with a new Fair Field Inn with 89 rooms. Of course there is the $34 million dollar renovation of the Adelphi Hotel which will be right next door to the proposed Indigo.
Ms. Hollowood is quoted as saying, “We are concerned with this project because it is under the same umbrella of ownership and franchisor as the Holiday Inn flag,”
According to the Review, Hollowood and Todd Garofano, president of the Saratoga Convention and Tourism Bureau expressed worry citing a declining demand for rooms during the past year while the supply just keeps growing.
According to Hollowood there were 18,000 fewer rooms rented during the first seven months of this year than there were during the same period in 2015.
According to Hollowood Hotel Indigo’s average room rate is expected to be about $50 higher than many of hotels in Saratoga Springs. $170.00 is the average year round rate (this includes the sky rocketing amounts paid during racing).
Hollowood is quoted as saying”To think they are going to break the $200 mark for average rate is in my opinion incorrect, especially when there is going to be more supply in the market.”
“I just think most people coming in from the outside really don’t have a good understanding of our market,” Hollowood told the Journal. “It requires more insight than just, ‘Oh, look at how they are performing compared to the rest of upstate New York.'”
“We are particularly disheartened with the franchise group … When somebody is making a decision around a table 10 states away, it doesn’t make any sense, particularly when they look at the way the market is trending downward,” Hollowood said.
When a stalwart like Ms. Hollowood is saying things like this it is pretty shocking. I can’t help myself from feeling a little schadenfreude. Ms. Hollowood has for many years been a cheerleader for growth that eroded much of what had been the country part of our city. I wonder if this experience might chasten her faith in the infallibility of markets.
There appear to be fewer and fewer profitable places to put the huge sums of cash that many of this country’s wealthy people are sitting on. I think the word I am reaching for and that she is experiencing is “bubble.”