Cleveland Hotels Face Lower Occupancy Rates Following RNC

The new Hilton Hotel (R); Key Bank Tower (L) [photo: Annie Wu / ideastream]
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This summer’s Republican National Convention in Cleveland has come and gone, but a big part of what helped bring it here remains….many, many hotel rooms.  The downtown event’s success is expected to eventually drive up convention business and tourism in the city.  But until that happens, some hotel managers are concerned about keeping their rooms filled and what’s being done to help get through the lull.

The Tudor Arms Hotel is about four-and-a-half miles from downtown, adjacent to the Cleveland Clinic’s main campus.  The historic 1933 apartment building was renovated and opened as a hotel five years ago.  General Manager David Minah says since opening the hotel saw steady occupancy growth, until this year.

“My estimate is we’re probably going to drop by one to three percent in our occupancies through the rest of the year," says Minah, "In the past we’re been growing our occupancy, so overall when you look at the growth in prior years to this, I think we’re going to be off about four percent in 2017.”

Minah blames the downturn on the number of hotel rooms that became available in the area over the past few years.  Cleveland tried to attract the 2008 RNC, but was rejected, in part, because there were not enough hotel rooms downtown and in the surrounding suburbs.  That sparked a hotel building boom that pushed the number of downtown area rooms to about 5000... the magic number needed to attract the week-long RNC and its estimated 50,000 visitors.  But now the city and its new hotels need more big events to fill the space.  

“There’s always an adjustment and we’ve done a lot of studies on what the community should expect when you add that much new inventory into the market," says Mike Burns, Senior Vice President of Convention Sales and Services for Destination Cleveland, the area’s visitors and convention bureau.  He says much of keeping the hotel rooms filled lies with the RNC itself.

"The key is making sure we pursue large business that’s out there that couldn’t consider us before. Since the RNC we’re seen about 60 new leads come into our community just in that short time. Of those about a dozen are pieces of business that couldn’t consider us without the Hilton and come of the new inventory. So we’re now able to pursue much larger business.  So we’ll continue to move after larger groups that couldn’t consider us before to help fill those rooms,” Burns says.

But hotel operators still expect some lean times because conventions are booked a few years in advance.

Besides enough hotel rooms, another key to bringing the RNC to Cleveland was the new convention center that opened about three-years ago.  The facility’s general manager, Mike Leahy, also recognizes the impact of having more hotel space than currently needed.  But he says Cleveland is fortunate that the convention center, Destination Cleveland, hotel managers, and local governments are all working together to make the most out of Cleveland’s growing convention and tourism potential.

“We have to drive demand so we don’t have a dip that is too deep," says Leahy.  "And it’s been studied and people know that you open all this inventory and you do have that dip in occupancy. We need to shorten that dip and not have it elongated, have just a short one, and hopefully one not at all of course. And rest assured we’re all working together, we need their help, they need ours, and starting out with that attitude we can really make it work.”

Leahy says 2015 was a big year for the convention center which hosted nearly 200 events, many more than expected.  And next year looks strong with the National Association of College Admission Councilors and the Advanced Manufacturing Expo among the events coming to town.                      

Beyond that, keeping hotel rooms filled becomes more of a concern.  Leahy says one of the biggest obstacles to booking events has been, and still is to some degree, a lingering perception of Cleveland as a less than desirable destination.   But hosting the RNC has helped ease that, and Leahy says there is an effort to bring people here to witness the city firsthand.

“Some are still a little reluctant to buy the destination first," says Leahy.  "We have plenty of initiatives out there, including inviting boards to have their board meeting here. You know, give us a little try before you commit to your national or international convention. That is working very, very well.”

Meanwhile, hotel managers like David Minah of the Tutor Arms are waiting for the RNC boost to kick in.  But until then, he says the room glut will benefit the visitors who come in the next few years.

“Now’s the best time to come to Cleveland. You have a whole selection of high quality hotels to come to and you’re pretty much going to be able to demand you’re price, especially if you’re a large event coming in, I think it’s going to be a buyer’s market.”

And despite the abundance of hotel space, plans for two more downtown hotels are moving forward with construction set to begin later this year.

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