Angie Wieck, Published March 18 2013
North Dakota seeing big growth in hotel construction
Charley Johnson, president and CEO of the Fargo-Moorhead Convention and Visitors Bureau, says increased hotel construction appears to be running parallel to the area’s overall economic growth.
“The recession hit here back in ’08, but not nearly as hard as a lot of other places,” Johnson said. “We’ve obviously recovered from that, and things are going nice and smoothly here. I think you’re going to see a lot more development of all kinds in the next few years.”
While the majority of the new hotels in North Dakota are in Minot and Williston, three hotels are currently under construction in the area of 45th Street South and Interstate 94 in Fargo.
A Sleep Inn is slated to open April 5. The hotel is owned by Grand Forks-based Northridge Hospitality. The company has also opened Sleep Inns in Grand Forks and Bismarck in the last two years.
Fargo-based TMI Hospitality plans to open a Residence Inn in May and a Comfort Suites in June. The company operates 179 properties in 25 states and has eight under construction, including the two in Fargo.
Several factors are considered when TMI decides where and if to build new properties, said Laura Bourdon, the company’s director of corporate communications in Fargo.
The company evaluates an area to determine whether the local economy has multiple industries that can support sustained growth. A market’s current occupancy rate is also a big factor, she said.
Occupancy rates in the metro area have shown steady growth for the past three years, according to data provided by the Fargo-Moorhead Convention and Visitors Bureau. From February 2010 to January 2013, the average occupancy rate increased from 62.5 percent to 67.7 percent.
Continued development in south Fargo has made the area especially attractive. Bourdon said the area is close to shopping, a variety of services and sports venues. Easy access to interstates 94 and 29 is also attractive to the leisure and business traveler.
Fargo City Planner Jim Gilmour said hotels tend to cluster near health care facilities. He expects the new Sanford Medical Center in south Fargo, slated to open in 2016, to attract continued hotel construction in the area of Interstate 94 and Veterans Boulevard.
Information compiled by the North Dakota Division of Tourism shows that about 80 new hotels were built in North Dakota from 2002 to 2012, with slightly more than 50 percent constructed in the last two years.
“Strong demand for hotel rooms has been experienced in communities statewide, not just in North Dakota’s Oil Patch communities, as is the common misperception,” said Tourism Director Sara Otte Coleman.
An increased number of available hotels in North Dakota can only mean good things for summer travelers, she said.
Not only will finding a room be easier, but room rates may decrease due to greater competition, Otte Coleman said.
Readers can reach Forum reporter Angie Wieck at (701) 241-5501