Study shows Marion ready for hotel

MARION - Marion is ready for a 100-room hotel catering to business and leisure travelers, according to a $16,500 study commissioned by city officials.

The study, conducted by consultants Hospitality Marketers International to determine the demand for a hotel in Marion, recommended a 100-room, upper-midscale hotel with banquet and meeting space of about 5,000 square feet. It would host social events like weddings as well as some corporate meetings and local events.

'They're recommending we look at a business-grade hotel that caters to the business travelers during the week, and then some leisure (travelers) on the weekends,” City Administrator Lon Pluckhahn said.

The study examined three sites and recommended one: a spot at 2825 Seventh Ave., amid small retailers.

The site would provide proximity to companies like Rockwell Collins, as well as access to shopping and the Marion Airport.

This recommended site is also the closest of the three options to downtown Cedar Rapids, but it won't compete with other hotels in the market, Pluckhahn said.

'It will take two to three years to get absorbed in the market,” Pluckhahn said. 'We should be able to accommodate 100 more rooms without hurting any of the other ones.”

By comparison, the Marriott Cedar Rapids on Collins Road NE has more than twice as many rooms, according to hotels.com.

Pluckhahn estimated that a project of 100 hotel rooms and 5,000 square feet of banquet space would cost about $12.5 million.

The hotel, if built, could be used for visitors to citywide collegiate and high school athletic tournaments, reunions, weddings, funerals and other special occasions.

Perfect Game USA, headquartered in Marion, has about 100 players per weekend visiting the city, which could also bring business to the hotel, the study said.

Prospect Meadows, the $11 million, 17-ballfield complex projected to be finished in 2017, could also have a large impact on a Marion hotel. So much so that the city may need to consider another one at that time, the study said.

The study recommended a $95-$98 per night price range to be in line with other similar hotels. It would include a restaurant and bar, which would generate about 35 percent of the hotel's revenue in its first year of operation in 2018, the study sad.

The study anticipates the hotel would generate $1.5 million in gross profit in 2018; $1.7 million in 2019 and $1.9 million in 2020.

The study estimates the hotel would pay about $250,000 a year in room taxes and $1,698 a year in property taxes. The hotel would create 60 jobs by 2020, the study found.