A version of this blog originally appeared in the Editorial page of the Red Cloud Chief on Sept. 20th, 2017:
The Heritage Tourism Advisory Committee (HTAC) in Red Cloud has selected the Potter Block (aka Brenda’s Shoppe) as the ideal site for a new downtown hotel. Recently, our group decided to forge ahead with abatement of the building and shoring up the exterior, and we will soon begin demolition work on the interior. Many of you likely have questions about whether or not this sort of thing will work in Red Cloud.
Why do we need a new hotel? The simple answer to this question is to keep the money Red Cloud tourism generates in Red Cloud. Between Opera House performances and Cather Foundation visitors, around 10-12,500 people come through the Willa Cather Bookstore doors each year. These numbers are increasing with the creation of The National Willa Cather Center and because of our focus on developing and promoting Heritage Tourism. We have seen a 43% increase in visitors at the Cather Center in 2017 and a 22% increase in revenue from taxable sales. We are poised to expand the tourism sector of our local economy and must find a way to more effectively profit off the interest in our town. The best way to keep people in town and spending money is to keep them around for at least a day or a weekend, or possibly even longer. Additionally, 80% of Cather visitors come from out of state and are looking for unique experiences and a nice place to stay and places to spend money. It may come as a bit of a shock but the Cather Foundation gets visitors from all 50 states and several foreign countries. The hotel is a critical part of keeping their money in town. It’s the best way to get people to spend money at local businesses besides the Cather Foundation and to explore other features in Webster County. Increased traffic downtown will likely motivate local businesses to expand their hours of operation and services, improving Red Cloud’s quality of life.
But please don’t simply take my word for it—we’ve had a Market Feasibility Study conducted by an outside group looking to possibly build here that took the most conservative look at the market possible and still concluded that we could support a 30 room hotel in addition to our current lodging stock and not negatively impact occupancy rates at the Green Acres and elsewhere. In short, this group wasn’t looking to invest on a wing and a prayer or because they cared about the community—they saw market potential. The Study was based on numbers from when the Kaley House and Cather Second Home were in their infancies, and before the National Willa Cather Center existed. Quite frankly, I think we can easily exceed the expectations of that Market Study because there are more and better things for tourists to do in Red Cloud than there were just a few years ago.
A new hotel has the potential to be the linchpin asset in an economic revitalization of Red Cloud. We’ve known for several years that simply building a hotel has the potential to bolster the local economy. Creating a downtown hotel featuring a mixture of lower cost and upscale rooms has the potential to transform the local economy. According to research conducted by Don Macke from the Center for Rural Entrepreneurship, a boutique hotel located downtown has the potential to catapult total economic impact from tourism from $1.1 million for the county in 2016 to $7.7 million in 2028. Lodging tax revenues could go from $5,405 to $63,929 and City Sales Tax from $7,762 to $54,161. This may sound like pie in the sky, but the numbers are culled from available data and trends, and assume that we don’t exceed a 40% occupancy rate. According to Macke, an Economist with over 40 years of experience in economic development whose consultancy work has brought him to 45 states, Canada, and the Caribbean, his analysis is fairly conservative in its estimates. He does assume that we make a concentrated effort to promote Heritage Tourism and Cather and do so for a sustained period of time. We cannot simply build the hotel and hope for a passive windfall of cash to land in our laps. We can use our Cather assets to attract visitors and get them to stay and spend more money by offering them things that they like, and unique experiences that they want to suggest that others experience. We have something that no one else has in the Cather brand here and from a nakedly opportunistic perspective the community and business owners alike need to go all-in on garnering revenue from our unique cultural asset. No one is suggesting that doing so is without risk, but it’s an enviable opportunity we have and one we must make hay from. The hotel is HTAC members betting on a future in and for Red Cloud.
Next month, I will discuss in more detail why we want to build downtown, why we want to save the Potter Block, and why we want to maintain local control of the business and property. Until then, please feel free to contact me at firstname.lastname@example.org if you want to learn more.