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Letter: Oak Marsh Hotel Proposal 'Predatory,' says Hilton Management

The CEO of the group that owns Oakdale's Hilton Garden Inn says a new hotel in the area will 'cannibalize' existing hotels' business.

As a result of your , we were made aware of a meeting that was held by the Oakdale City Council regarding the proposed Oak Marsh hotel. 

In the minutes to the Dec. 13, 2011, meeting, a copy of which we were able to obtain, it was indicated that there has been no negative feedback on this project. We find this grossly disingenuous, as we, on three separate occasions, have communicated in writing to the mayor and the council our opposition to this project.

From a basic economic perspective, we find this project totally out of line and not in concert with economic development sought by the city. Twice, the promoter of this project has projected a total of 3-4000 “incremental” rounds of golf. At an average of $30 per round (see the proposed 2012 rates), the gross receipts by the golf course could amount to $90,000-$120,000 per year.  Although we doubt this number is accurate (again, this is a municipal course with an average rating), it may result in 1,000-2,000 total room nights sold at the hotel (a guest traveling to play golf would certainly golf more than 1-2 rounds per day) out of a total of 42,000-43,000 available room nights at the proposed facility—this is less than 5 percent occupancy—the balance of any business would be cannibalized from existing hotels in Oakdale, jeopardizing their business, and employment at those facilities. It should be noted that we have actively promoted and solicited for golf packages as part of our hotel’s promotions, resulting in less than 20 packages sold over the year. We consider this type of activity by the city as predatory and not in the best interest of the community—certainly, in our opinion, it does not represent "economic development." Someone needs to question their motives or common sense in moving forward with this proposal. A huge white elephant has entered the room, and no one seems to be able to see it!

Thank you,

Stephen L. Schwartz

Chairman/CEO

First Hospitality Group, Inc. (which owns the )

ronda January 07, 2012 at 06:44 PM
Close to a previous comment I made. There are already 3 hotels very close to the golf course. I don't see the point.
C January 07, 2012 at 06:49 PM
Is this hotel project about bailing out the golf course?
Randall Johnson January 08, 2012 at 08:07 PM
I also made a remark to this effect when I first heard about the idea. I don't get it.

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