Competitors: No room in Brunswick for public hotel at Naval Air Station
BRUNSWICK — The Midcoast Regional Redevelopment Authority is seeking a hotel operator for a 248-room hotel at Brunswick Naval Air Station.
The 7-year-old hotel, previously reserved only for Navy personnel and guests, is planned to open to the public by summer. It will increase the number of hotel rooms in Brunswick by 50 percent, pushing the total to 742 from 494, according to data from Smith Travel Research.
That does not include the soon-to-be opened 52-room Inn at Brunswick Station, and the scale of the increase has some existing hotel owners worried that the local market can't handle any more rooms.
"I just don't think the area itself, not just Brunswick, can survive that," said John Verreault, who owns the Captain Daniel Stone Inn on Water Street.
On Tuesday afternoon, MRRA organized a tour of the hotel for interested bidders. The authority is accepting bids until the end of April, is hoping to select an operator by mid-May, and have the hotel open by June.
MRRA will retain ownership of the property, but lease it to a hotel operator. Steve Levesque, MRRA executive director, said he hopes that whomever the MRRA board selects will help to transition the hotel to a conference center and resort, possibly including an indoor water park and championship golf course.
Only one potential bidder showed up for the tour, but Levesque said he has had three or four additional calls from hotel management companies, mostly from within the area.
Don Hebert, who owns NextStep Solutions of Kennebunk, toured the hotel on Tuesday. He said he was "absolutely" interested in the property, and his only real concerns about taking on the hotel have to do with the economy and the uncertainty of many of the business proposals for what will be called Brunswick Landing.
"My biggest concern is that if something doesn't happen, it really decreases the chances of the property being able to sustain its value," he said. "As far as the water park and conference center, those seem to be quite a ways down the road."
Resort, conference center
Levesque is hoping the hotel will generate demand for conferences and provide lodging for the new businesses he hopes to attract to the property.
"There isn't anything of (this) scale in the region," he said. "We're really missing out on a lot of opportunities to attract national conferences."
A 2007 study by Economics Research Associates on business opportunities at the redeveloped base estimated that a large conference center could capture 10 percent of the meeting and conference market in the state.
The study also found that if a large, indoor water park featuring slides, pools and water rides was added to the hotel, it could generate in the range of 50,000 nightly stays a year.
Concerns from competition
Levesque said the the ultimate success or failure of the hotel hinges on whether it can bring new visitors to the Brunswick region.
"We're bringing in people to Brunswick that didn't come before," he said. "We're adding to the pie, not subtracting from it."
Local hotel owners are hoping he's right, and some fear the worst if he's not.
"Unless it's bringing in incremental business to the marketplace, it's going to be a real blow to all of us," said Linwood Austin, who owns the Comfort Inn on Pleasant Street.
Austin said the hotel market in Brunswick has been sluggish recently, with an average occupancy rate in 2010 of 44 percent, according to Smith Travel Research. Occupancy rates are traditionally much higher in the summer, ranging from nearly 70 percent last summer to more than 80 percent before the recession. But in the winter, those figures plummet to below 40 percent.
Austin is also concerned about the growing number of rooms in the Brunswick-Freeport area.
Freeport has 100 more rooms now than in 2005. Brunswick has lost almost 200 rooms since 2005, but would grow by 300 with the addition of the Inn at Brunswick Station and the Navy inn.
"You put too many of these services in place, we're all going to choke each other," Verreault said. "There's gotta be a reason to open up these hotels, and I don't see it."
The 2007 Economics Research Associates study MRRA commissioned doesn't cite Brunswick hotel occupancy rates. Neither does MRRA's business development opportunities packet, which was distributed for the pre-bid tour.
Rather, the ERA study provides statewide occupancy rates from 2000 to 2004, which hovered around 60 percent. Since then, statewide occupancy has remained significantly higher than Brunswick's, averaging 55.8 percent last year, according to Tennessee-based Smith Travel Research.
Levesque said the omission was intentional. He said the reopened Navy hotel will compete on a regional scale, not only in Brunswick.
Jan Freitag, vice president of STR, which calculates occupancy rates around the country, said a 250-room hotel could succeed in Brunswick if the hotel's developers are creative and able to lure new customers.
"If the 250-room hotel does it right, they could be a demand generator for the area," he said. "There may be overflow that other hotels benefit from."
He especially liked the water park concept, and said something like that would be necessary to get through the slow winter months.
"That's one way to do it," he said. "If the water park allows you to get new guests, all the better."