Study finds Maricopa market ideal for hotel

Saying she was shocked there wasn’t another hotel in a community the size of Maricopa, a hotel market feasibility analyst delivered Core Distinction Group’s study in January.

“Looking at this population, it was shocking to me that there wasn’t a hotel development here,” Lisa Pennau said.

Interim Economic Development Director Harold Stewart said the hotel feasibility study was an important and critical document.

“The community understood there was demand,” he said. “This was a great way to solidify that and recognize that from a statistical standpoint.”

The conclusion was unsurprising: Maricopa is prime ground for a branded hotel. Specifically, Pennau said a 125-unit Residence Inn might be the best fit.

According to the study, “It is anticipated that a new, upscale, extended-stay, branded hotel would capture displaced lodging demand currently staying in markets surrounding Maricopa. Additionally, the newness of the hotel should be well received in the marketplace. Its location will be ideal to serve Maricopa and regional markets.”

Pennau said the study found most of the potential hotel business “leakage” was going to Chandler.

“Most of the people that we spoke to don’t want to drive to Chandler,” she said. “It’s just the best option.”

Mayor Christian Price said he spoke with Casa Grande Mayor Bob Jackson, who encouraged Maricopa to work with his city in accommodations, as well. Sports tournaments in the area tend to strain all available hotels, he said.

“I’m not sure if the hotels in that market are aging or there hasn’t been new development, but all of the demand here was going Chandler,” Pennau said.

She said the average occupancy rate in Chandler hotels was 71 percent. She considered that high in the trade and a reflection of the need for accommodations closer to Maricopa.

Vice Mayor Marvin Brown questioned that conclusion, however. “I’ve known several hotel managers,” he said. “If you’re lower than 90 percent you’re losing money. We’d like to be viable, at least.”

Some of the biggest demand for hotel accommodation in Maricopa comes from the auto proving grounds. More than 20-percent growth is expected at the Volkswagen facility, which annually needs rooms for around 2,000 people between April and October. At the Nissan facility, 5,000-7,500 visitors are estimated annually, and most hang their hats in Phoenix- area hotels because Harrah’s Ak-Chin is often full.

Michael Winer, the city’s economic development management analyst, said the hotel study was initiated “to assist in recruitment of a hotel to Maricopa by validating the community’s need and ability to support a hotel.”

Core Distinction Group was contracted last fall for the task. “Typically when it comes to a point where a community contacts me for a study, they are pretty confident that there is a need,” Pennau said.

Besides indicating the local demand for a hotel based on numerical data and on qualitative data gathered through interviews with business owners and community leaders, the study also shows other development and retail needs in Maricopa.

Councilmember Peggy Chapados said she found that encouraging. “One of the biggest needs we have here is meeting space, event space, banquet space and the ability to hold conferences and tournaments and that kind of thing, too,” she said.

In a five-mile radius, the study found a 72-percent leakage of potential retail trade to other communities because of a lack of supply in Maricopa. For instance, it found Maricopa had potential retail demand of $12 million for a clothing store but was supplying only about $1.8 million.

Overall, the study found the retail supply gap to be $279 million.

The study also outlines the top employers in Maricopa, demographics, recent economic development and the potential economic impact of a branded hotel.

Hotel developers want to know the opportunity for retail sales, dining establishment and unaccommodated demand, Pennau said.

“A lot of times when a hotel comes in they want to know there is other growth in the community,” she said. “Knowing whether or not a community supports it is a huge piece of the hotel development being successful.”