COVID-19 adds doubt, delays, costs to Grand Rapids hotels

Coronavirus

GRAND RAPIDS, Mich. (WOOD) — COVID-19 has not been kind to Grand Rapids’ hotels, which were riding high from 10 consecutive years of record-setting performance.

“I wouldn’t be surprised if a couple don’t make it,” Experience Grand Rapids CEO Doug Small said.

He estimated 15 hotels temporarily closed during the pandemic. That includes the JW Marriott Grand Rapids, AC Hotel and Courtyard by Marriott.

Small said hotel occupancy plunged to 18% in April, which is 47% lower than the same time last year. Hotel revenue also dropped 87% in April compared to the same time in 2019.

The good news: More people were checking into Grand Rapids hotels in May. Small said the increase was slight but “we’re heading in the right direction.”

COSTLY COVID-19 DELAY

The COVID-19 pandemic is proving costly to hotels that haven’t even opened.

Last week, the Downtown Development Authority agreed to amend its funding support agreement for the Residence Inn by Marriott being built on the corner of Ionia Avenue SW and Fulton Street.

The DDA originally allowed the developer to capture approximately $1.2 million in tax revenue reimbursements, which it would repay to the city over 15 years. But that was when the hotel was supposed to open Sept. 1.

“With everything that’s been going on in specific to the coronavirus, that schedule has been pushed back until at least Nov. 1,” Downtown Grand Rapids Inc. President and CEO Tim Kelly explained to DDA members.

The delay means lost dollars — approximately $1.6 million to $2 million, not including rooms in the 13-story hotel that will likely remain empty because of the pandemic.

That’s why the DDA agreed to allow the developer to capture $1.6 million and repay it over 20 years instead of 15.

CONVENTION HOTEL ON HOLD

Another highly anticipated hotel project is also hitting delays.

Earlier this month, the Grand Rapids-Kent County Convention and Arena Authority officially tabled a study on adding a 25- to 30-story hotel atop DeVos Place.

downtown hotel rendering 030618
(A 2018 rendering of the proposed convention hotel in downtown Grand Rapids.)

“The project is not dead,” assured Small, who led the group in charge of the study. “The process is stalled at this time.”

He said the team was about two months away from presenting its results when the pandemic started.

“We just decided we had to put the brakes on, and we did,” he said.

The convention hotel would add 400 to 500 rooms downtown. The CAA sees the development as the possible next step in attracting new business to grow Grand Rapids into the next big convention city, with Small citing Indianapolis.

Small said because of the economic impact of the pandemic, the task force will have to reassess its proposed financial model for the convention hotel. But he is steadfast that the potential business needed for the hotel to survive and thrive is there.

millennium park amphitheater rendering 011419_1547517241126.jpg.jpg
(A 2008 rendering of the proposed amphitheater.)

Small said the task force may meet again in the fall, but he doesn’t expect the convention hotel project to rev up until next year.

One CAA project is carrying on. The authority is scouting sites downtown to build an amphitheater. The CAA hopes to pick the spot sometime in the next six months. The project would then take about two years to complete.


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