Hotel Market Feasibility Study UPDATED:

 After the City Council approved site plans for a 51-unit, three-story hotel east of Interstate 35 and south of Henriette Rd (exit 171), the Pine City Economic Development Authority funded an update to the 2016 study to help strengthen the financial position of the proposed hotel development. GSG concluded that, "a mid-level to upper mid-level hotel designed to attract travelers from I-35, as well as suit guests of businesses and residents of Pine City, would be ideal". They go on to state that Pine City's demand generators including tourism, industry and event-based travel often utilize lodging in nearby markets, so a new hotel development would redirect the economic impact back to Pine City. 

View or download the updated version here: Hotel Market Feasibility Study 


Hotel Market Feasibility Study

Pine City, in partnership with the EDA, Initiative Foundation and Greater Pine Area Endowment, hired Growth Services Group (GSG) of Missouri in January 2016 to determine the feasibility and possible success of bringing a hotel to town.  Consultants determined the town could sustain a 42-room hotel with a business center, banquet space to accommodate greater than 25 people, hot breakfast, fitness room and a pool.

Despite a number of other hotels within 20 miles of Pine City, including a giant 563-room hotel at Grand Casino Hinckley, consultants pointed to a 6.5-percent increase in area lodging from 2009 to 2015 as a reason the market area could sustain another provider of overnight accommodations. 

GSG’s report recommendations said, “Review of demographics and community interviews suggested that a mid-level to upper mid-level hotel would be ideal and provide the amenities to meet the community’s needs.  This type of hotel would be well received and provide a new tier to effectively draw guests back to Pine City from the nearby surrounding markets.”

The cost to develop such a hotel would be about $109,000 per room, or about $4.6 million for a 42-room building.  Consultants predict five years after the development the hotel will have an average yearly occupancy rate of 65.7-percent and the average daily rate would be $101.83.

Pine City had a number of hotels in its early years, the last of which was the Agnes Hotel which stood until 1974.  Two roadside motels remained since then, one 20-room facility (the Old Oak Inn) which is set for demolition due to redevelopment of the site, and another 12-room facility, the Gail Motel, which has operated since 1955.

“Given the positive results of the study, the uptick in commercial and residential development activity along with all the city has to offer in amenities, including the wide range of annual events that draw visitors to our great community, our hope is that hotel developers will be drawn to our market,” said Mayor Carl Pederson.

View or download a copy of the report here: Pine City Hotel Market Feasibility Study