Is it economically feasible for the Brunswick to prosper downtown?

A reader comments on “Where angels fear to tread: Hotel Brunswick to have new tenant” as follows:

“The Brunswick need not compete directly with the Penn Square Partners’ Marriott, which aspires to be a higher-class facility. Downtown Lancaster as a whole, and specifically the taxpayer-owned convention center, could greatly benefit from lodging within easy walking distance that is of reasonably good quality yet is significantly less expensive than the pricey Marriott. Right now, middle-class and working-class visitors who want to attend a downtown Lancaster event really have no choice other than to stay overnight in the suburbs.”

This sound very logical but unfortunately is based on unfounded supposition.

An affiliate totally renovated a hotel, an effort that would be necessary to meet requirements and compete in the already thin downtown market. The total cost averaged over the number of rooms came to $35,000 per room. Renovation of another hotels scheduled to begin this winter is budgeted at the same figure.

So even though the scope of the planned independent Brunswick renovation is likely less, to renovate the entire Brunswick, including its considerable public areas and mechanical systems, might cost say $25,000 x 223 rooms = $5,575,000. Moreover, it would take at least six months to mobilize and perform the work.

Then there is the marketing problem. The few business travelers to downtown Lancaster are usually on expense accounts and prefer to stay at branded hotels ( Marriott, Holiday Inn, Hilton, Sheraton as examples) because of their high standards, familiar settings, and their ‘loyalty’ programs. If such a popular franchise were available, the cost of renovation would soar.

In turn tourists seek out suburban and exurban locations to be closer to tourist attractions and the countryside.

The Brunswick is an unusually large fhotel in relationship to its number of rooms due to its expansive public areas and indoor pool. It is commensurate in space with the 300 room Marriott two blocks away. And it is several decades old. These are serious maintenance cost factors that do not vary with occupancy.

If investment isn’t made to bring the hotel up to minimal modern standards and consumer expectations, the unbranded Brunswick will have an even harder time gaining a niche in the historically thin downtown hotel market. If it is spent, it is questionable that the Brunswick will be able to achieve the say 65% occupancy and $90 Average Daily Rate which we estimate would be necessary to even cover cost and debt service. (Unlike the Marriott, the Brunswick must pay real estate taxes.)

In short, the “less expensive” hotel the contributor envisions may not be a practical reality. The cost is very high and the remaining downtown customer base is scant.

It was not without good reason that the partial title to our article was “Where angels fear to tread”. Nor is it uncommon for real estate developers to mistake the high cost of building a hotel for its value as a going business.

A relative who had been very successful in developing residential real estate purchased a magnificent Hilton Hotel in Florida for 65 cents on the dollar. Three years later he sold it for 35 cents on the dollar.

We think that both the Gray Administration and the Lancaster Newspapers have ‘turned a blind eye’ to the Brunswick’s market woes to deflect criticism. The City wants to conceal the failure of City Planner Randy Patterson to work for a holistic solution to the plight of Lancaster Square East ; and the Newspaper doesn’t want to accept responsibility for its sponsorship and equitable ownership of the competing Marriott Hotel that has absorbed what business that exists downtown.

Let the future owners prove us wrong. We will celebrate with them.