Inn it to win

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This article was published 23/08/2021 (1500 days ago), so information in it may no longer be current.

A development company with Manitoba roots is doubling, maybe tripling, down on its strategy of building hotels with a big-city feel in small towns across the prairies, with projects at various stages in Rivers, Niverville, Souris, Austin, Carman, Stonewall, and Grenfell, Sask.

Steel Creek Developers, started five years ago, has found a niche in an environment that the company’s brass — who grew up on a farm in Elm Creek — understands well: rural communities that want to keep hospitality dollars within their confines.

Vice-president Trevor Rempel says that so far, the business model, and spin-off hotel brand Blue Crescent, has been a resounding success for all involved, even throughout the pandemic, which has sunk its teeth into urban hotel occupancy and chewed off a lot more than hoteliers would prefer.

“In rural communities, what we’ve found is there’s little to no competition (to our projects),” said Rempel, now living in Hepburn, Sask., with a co-worker dad in Elm Creek and co-worker brothers in Saskatoon and Altona. “Cities have dozens of fine modern hotels, but in these communities, there just aren’t those options.”

In many of the towns where Steel Creek has completed or announced hotel projects, the only options for stays were motels with either low occupancy potential, lack of amenities, or both. For those communities, Rempel says, not having more modern, and simply more, rooms means losing out to nearby cities on hospitality spending and the other benefits of a hotel’s economic stimulus — local shops, restaurants, gas stations and the like.

And while Winnipeg hotels have frequently struggled to maintain occupancy rates above 10 to 15 per cent (with increased tourism, it’s believed those will expand), 30-room hotels in Rivers and Grenfell were consistently operating between 60 and 100 per cent. The reason for that discrepancy is largely due to the type of clientele served in both of those communities: customer segments like construction crews, tradespeople, railway workers, and agricultural industry professionals were still staying in hotels throughout the pandemic.

“The occupancy drivers in many of these communities are customer segments that proved somewhat COVID-resistant,” he said.

The company’s hotel in Souris, Rempel said, has not been doing quite as well, but he believes the fortunes will shift soon. Much of that hotel’s expected clientele is tied to the local amateur sports scene and tourism, both of which took an understandable pandemic dip but are expected to rebound.

That’s part of the thinking of Stonewall’s town council, which earlier this month announced in principle that Steel Creek would be developing a 40-room hotel to be situated on the town’s Veterans Memorial Sports Complex (VMSC). A strategic plan developed for the town of just over 5,000 identified quality recreation and cultural events as a priority moving forward.

In a meeting Aug. 5, town CAO Wally Melnyk said the town had always planned to develop a new ice surface to host winter sports events, but “council wanted to do more than just add another arena.” It wanted to expand facilities and services for residents over the course of the next decade, but also attract visitors: a hotel was proposed and approved by the town, with Steel Creek tapped as developers after being contacted by local investors who’d been satisfied with their return on the Rivers hotel.

The hotel, fuelled by local investment and bolstered by the province’s tax credit programming, would automatically move Stonewall into a different category for hosting sporting events. “One of the strong drivers we consider is the local sports programming,” Rempel said. Stonewall checked that box.

Another potential project for the VMSC grounds is an aquatic centre, which Steel Creek would also build and connect to the hotel. Until Aug. 31, the town is soliciting feedback from the community for opinions on that project before providing a decision to Steel Creek, according to an Aug. 5 presentation.

Regardless of whether the aquatic centre is approved, the decision to build a new hotel in town is a welcome one that businesspeople have been lobbying for — for over a decade, said Graham Starmer, president of the Stonewall and District Chamber of Commerce. And with locals investing, it’s an assurance the project will fit.

“We’ve been thinking, for 10 or 12 years, that we host so many events at our rinks and ball diamonds, with a lot of people coming into town from Winnipeg, and we only have a small room vacancy, which is problematic to say the least,” he said. “When we were approached by the developer to get behind this project, we were very eager to do so.”

The hotel project is the latest forward-thinking decision to drive growth in Stonewall under its current administration, which also announced programs to incentivize rental housing development in its Main Street area last year.

Rempel said he was glad Stonewall was so receptive to the proposed hotel, with many rooms featuring a “split” room design, with a shared bathroom dividing two sleeping areas, along with barrier-free and pet-friendly units. “Construction crews love that split design,” Rempel said. “And if you’re a snorer like me…”

After design stages and engineering consultations, Rempel said the company hopes to break ground on the new hotel in 2022, around the same time a 75-room hotel and aquatic centre in Niverville is slated to begin construction and just after a 30-room hotel in Carman is finished in October.

“Right now, for every guest who’s not staying in the community, those are dollars driving to some other town or city,” Rempel said. “The ripple effects are huge.”

As for building a hotel in Elm Creek, Rempel said that’s not in the plans, however, the company is considering building a six-plex for seniors on the local golf course.

ben.waldman@freepress.mb.ca