Paletta family to break ground for hotel in Thompson

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This article was published 14/6/2010 (3633 days ago), so information in it may no longer be current.

WINNIPEG'S Paletta family is becoming known as the hotel developers willing to do projects where no one else dares to go.

This time, it's Thompson.

Angelo Paletta, his brother Anthony and some partners are breaking ground next week on an $8-million, 70-room Suburban Extended Stay Hotel in Thompson.

In the past, the family sunk about $17 million into the conversion of the old MTS offices on Portage Avenue into a Clarion Hotel, which critics said would never work. More recently, it spent $15 million on the renovation and expansion of what is now called the Hecla Oasis Resort, Spa and Golf Course, a property that the province owned for many years and couldn't turn a profit on.

While the new Thompson property may be off the beaten track, Angelo Paletta said he believes the business case is solid. "We really think the extended-stay concept will work well in Thompson," Paletta said. "There are a lot of corporate or business travellers who are going up to Thompson and staying for awhile."

It will be the first Canadian property for the Suburban Extended Stay brand, one of 11 brands marketed by the Choice Hotels International hotel company.

The Thompson ground-breaking will be just days ahead of the second Canadian Suburban project to start in Estevan, Sask.

"We're quite excited about the potential for extended stay properties in Canada," said Chris Kornmayer, director of strategy and marketing for Choice Hotels extended stay properties.

He said extended stay properties make up only seven per cent of the total hotels in the United States and is much lower than that in Canada.

He said Thompson is ideal for this project because of its resource industry, health care facilities and because it services a large region.

The property is targeted at people staying five days or more, with rates declining for longer bookings. The chain is marketed in the upper-economy price range with each room featuring a kitchen, free high-speed Internet, free premium movie channels, guest laundry and weekly housekeeping.

The Thompson location will include a restaurant on an adjacent site.

Mark Matiasek, general manager of Thompson Unlimited, said the northern city has been under-serviced by the accommodations industry for a long time and demand for hotel rooms is projected to be strong in years to come.

"I have been told that there are no hotel rooms available in town for the July long weekend," he said. "And ironically, because of things like the cold weather testing that goes on up here, occupancy rates do not go down in the winter in Thompson like they might for hotels elsewhere in the province."

New hotel development is seen as a risky proposition these days with occupancy rates in Manitoba struggling to get to the 70 per cent level and financing for new projects tough to come by.

"The hotel market may not be great right now, but if you wait for the upswing you miss it by a year," said Jim Baker, executive director of the Manitoba Hotel Association.

Paletta agreed that financing can be tough, but because of his family's track record and a solid group of investors, he was able to put the deal together.

"If this was my first project with no experience in the business it would have been very difficult," he said.

The Palettas also own the Days Inn on McPhillips Street. The Clarion has been a success but the Hecla property continues to be challenged.

"We're hoping some nice weather will make a difference this summer," Paletta said.

martin.cash@freepress.mb.ca

Need a room?

The Thompson hotel market:

15,000 -- the city's population

400 -- total number of rooms in the market

70 -- additional rooms to be added on completion of the Suburban Extended Stay Hotel, which is scheduled for February 2011

8 -- proposed room expansion to the Thompson Days Inn & Suites