University of Arkansas Seeking $30 Million On-Campus Hotel Project

by Chris Bahn  on Monday, May. 27, 2013 12:00 am  

The Competition

What the study doesn’t fully take into account — though it is mentioned — is last year’s opening of The Chancellor, a 207-room hotel in downtown Fayetteville. Formerly the Cosmopolitan, the renovated property more than doubled its available rooms and has 14,000 SF of meeting space with room to host events for up to 600 people. As noted in the study, The Chancellor is located next to the UA’s Global Campus offices off the Fayetteville Square.

UA sporting events and the Bikes Blues & BBQ festival are cited as events that could help keep the hotel operating between 45 and 55 percent occupancy over the first five years, according to the PKF report. But the real market for meeting those goals would be executive education events and conferences held in conjunction with the Walton College and others on the UA campus.

The Walton College alone hosts more than 140 events annually. According to the study, those events generate hotel demand exceeding 3,000 “room nights,” particularly during the months of February, March, April, September and October.

A hotel would allow the college to host more of its events on campus. The proposed conference center would add 13,000 SF of meeting space to the 12,000 that already exist in the nearby Reynolds Center.

PKF researched five similar hotel projects on campuses across the country. Though those hotels were not named in the study, Davies said the UA had looked at the AT&T Center at the University of Texas campus in Austin.

UT opened its 297-room hotel and 40,000 SF of meeting space in 2008 to complement its McCombs School of Business and executive education program. That project was fully funded by the university, Olivia Gardner, the AT&T Center’s marketing manager, said.

The University of Georgia at Athens has operated a similar venue since 1958. Georgia Center Director Bill Crowe said the facility hosts about 300 executive education events each year and another 1,500 university functions.

According to the PKF study, college/university conference centers averaged 55.4 percent occupancy in 2010. PKF suggested the UA set an occupancy goal of 45 percent in 2015 and 2016 and 55 percent in 2017. The five conference centers PKF reviewed charged an average of $140 per room and operated at 50 percent occupancy.

“Demand is there,” Crowe said of the UGA hotel. “There are a lot of advantages to having this kind of operation on campus.”

If the hotel and conference center are built, UA would have two on-campus hotels. The Inn at Carnall Hall was opened in 2003 and operates as a joint venture between the UA and private owners.

Carnall Hall was considered in the PKF study. Davies said the two hotels would serve different missions, so the UA won’t be competing for business it already owns.

 

 

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