Advisory Report for the Proposed Hotel and Seniors Apartments in Neepawa MB
Marketing Study with Operating Projections
The Town of Neepawa completed a hotel and seniors accommodation feasibility study early in 2018. The study analyzed the market and economic development potential for two different scenarios for development both with a 60 room branded hotel with conference centre but with two different seniors’ apartment options. One with 18 suites (approx. 1200 sq foot) and the second with 24 suites (approx. 900 sq foot).
The demand for hotel rooms in Neepawa would come primarily from government and leisure segments with corporate rooms stays being a smaller percentage of potential stays. The meeting and conference market would also provide a small percentage of room stays. The Province of Manitoba has experienced strong growth in hotel stays in 2016 and 2017. Occupancy is projected to be at 55% in Year 1 and improve to 63% by Year 3. The Average Daily Rate is projected to be $130 in the first year increasing to $135 by Year 3. These projections are based on the hotel being branded.
The study suggests sufficient demand and depth to support seniors’ apartments in both the independent living and assisted living categories. Price per month is a factor in determining the number and size of the apartments constructed in ensuring adequate return on investment.
Economic Impacts for a development of this size would create meaningful impact in the local market, providing jobs, enhancing the attractiveness of the community, increasing visitation and spurring other commercial and retail growth. The second option for development would generate a projected $1.7 million in incremental spending in the Town of Neepawa. The hotel and seniors apartments is projected to generate $500,000 in payroll and benefits, resulting in 12.5 full time equivalent positions of employment. The property taxes for the development have also been projected at $100,000 in year one.
For our community to attract a private sector hotel investment, several key criteria are used by investors. The most important are: return on investment, availability and likelihood of financing and an exit strategy for both lenders and developers. To further discuss the details for the feasibility study, please contact Marilyn Crewe Neepawa’s economic development officer at 204 476 7607.