Hiawatha provides a solid and feasible market for a potential full-service hotel, according to a study commissioned by the city and recently reviewed by the Hiawatha City Council. If completed, the hotel would be the first hospitality property in the city’s history. The study was conducted by Wisconsin-based Core Distinction Group at a cost of […]
Hiawatha provides a solid and feasible market for a potential full-service hotel, according to a study commissioned by the city and recently reviewed by the Hiawatha City Council.
If completed, the hotel would be the first hospitality property in the city’s history.
The study was conducted by Wisconsin-based Core Distinction Group at a cost of $9,000, according to Hiawatha city manager Dennis Marks, “to determine if our market is financially conducive for a sustainable lodging property.”
A similar Hiawatha hotel study was conducted in 2019, also by Core Distinction Group, and presented to the city in early 2020, but because of the economic downtown associated with the COVID-19 pandemic, “we were handcuffed a little bit on the timing” of that report, Mr. Marks said.
According to the latest report’s executive summary, “it is the opinion of Core Distinction Group, that at the time of this study, the community of Hiawatha, Iowa and the immediate surrounding areas within Linn County, Iowa offer the current and future demand to support the proposed hotel development in this Comprehensive Hotel Market Feasibility Study.”
Using criteria including the community’s overall economic condition, market demand areas, community lodging supply and demand, and trending data, the 149-page report indicates that Hiawatha would be able to support an “upper midscale” hotel with a recommended size of 80 to 90 guest rooms, with a mix of single-occupancy and double-occupancy room configurations.
Features of the hotel should include a fitness center, complimentary breakfast, a bar, a pool, a meeting room and an on-site restaurant, according to the report.
Existing “upper midscale” hotels in the Cedar Rapids area identified in the report include the Holiday Inn Express at 1230 Collins Road NE, the Hampton Inn & Suites at 1130 Park Place NE and the Comfort Inn & Suites at 2025 Werner Ave. NE.
“It is anticipated that a new hotel would capture displaced Lodging Demand currently staying in markets outside Hiawatha,” the report indicated.
The report also recommended that a potential hotel be located on a two- to three-acre site “in the vicinity of Interstate 380” with “frontage or high visibility” from the interstate. Using those criteria, the principal area targeted in the report is generally near the intersection of I-380 and Boyson Road.
Dennis Marks
Mr. Marks said there are privately-owned land parcels in the I-380 and Boyson Road vicinity, but the city doesn’t own any property in the area.
“I think what they're saying there, when they identified that (area), is that based on all of the inputs that they have, that would be an ideal location,” he said.
Demand for a new hotel can be based on a variety of factors. In Hiawatha’s case, demand could be driven by a number of area tourism attractions, most specifically the eight-field Prospect Meadows baseball and softball complex in Marion that draws an estimated 60,000 visitors per year, as well as lodging demand from area employers and health care facilities.
“Hiawatha may be a small city by population, but it boasts a robust and diverse economy that is reflective of its dynamic business environment and strategic location near Cedar Rapids,” the report says. “This economic vitality is supported by a variety of large employers that span several key sectors, including manufacturing, technology, and health care.”
The report also considered occupancy rates for existing hotels in the Hiawatha area, community demographics and other factors.
If constructed, a new hotel would provide an average of 10 to 15 full-time equivalent jobs, according to the report. It would also provide a total estimated economic impact of nearly $21 million in its first five years of operation, from sources such as sales, lodging and property taxes, room, restaurant and entertainment revenue, alcohol sales and tips.
Mr. Marks said the current study includes substantially more data than the original report and is even more favorable for Hiawatha than the 2020 study.
For example, the previous report recommended a 60- to 70-room hotel, while the current report favors a hotel with 80 to 90 rooms.
“One of the takeaways for me is it appears that the market, or the demand, for this is actually growing for our area, which is good,” he said. “That shouldn't surprise anybody, because of the resiliency of the Corridor economy compared to things that are happening nationally.”
He also said that the city has already received inquiries from hotel developers – “people with varying or different levels of interest, or where they're at in their process.”
“Although there was some interest back then (in 2020), I think there's probably more interest now, just due to environmental things beyond our control and beyond their control,” he said.
Regarding next steps, Mr. Marks said the city will publicize its interest in attracting a new hotel through the Hiawatha Economic Development Corporation (HEDCO), as well as hotel developers and brokers.
“We'll push it out as publicly as we can,” he said. “Every chance we get, we're going to talk about the opportunities that we see for a hotel here in Hiawatha.”
He also said attracting a hotel has long been a priority for Hiawatha city leaders, and will remain so moving forward.
“We’re going to have another strategic goal-setting session with the City Council in June,” he said, “and I would imagine that hospitality is going to rank right up there (as a priority).”
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