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Arizona Foundation Commissions Hotel Feasibility Study


The Foundation for Little Colorado Revitalization has retained the GSG Hospitality Group (GSG), a national consulting firm focused on data and primary intelligence insights for local municipalities, to conduct a Hotel Feasibility Study for the area. This Market Study provides a demographic and economic overview of the subject area to determine the overall feasibility of a new greenfield hotel development. The purpose of this Market Study is to estimate the perceived demand and to estimate financial performance of a new hotel in the Eagar and Springerville, AZ area.

GSG will analyze market conditions, economic and demographic factors, and site conditions to determine their impact on a potential project. GSG will utilize both primary and secondary data sources to analyze the subject area’s demand for additional rooms. Research will also include local interviews with area representatives from a variety of public and private sector organizations. The Report will include primary data and input regarding the overall feasibility of the project today and will analyze the potential for future growth in demand in the subject area.

The GSG Market Feasibility Study Report will address the estimated operating performance of a potential project and will provide recommendations as to the size and scope of the potential development. The report provides prospective owners, investors, operators and lenders with a snapshot of the overall feasibility of the potential project based on market conditions at the time of the study.

According to Corey Mehaffy, CEO of Growth Services Group, “It is important for communities to analyze the overnight accommodation demand of their local employers, entertainment venues and community events to understand the current demand; and where that demand is being met. In many cases, rural communities are losing significant revenues from a lack of overnight accommodations as guests are being redirected to nearby communities with hotel options”. Mehaffy went on to add, “Lost revenues often include more than just hotel revenues and potential bed tax. Often, communities are losing revenues from retail shopping, fuel sales and restaurants which all negatively impact merchants as well as the communities themselves.”

In addition, it is important for communities to understand the potential additional demand for rooms from employers, events and venues that may be restricted in size and scope given the lack of current overnight accommodations. Mehaffy added, “As we work with rural communities across the country, we hear from local chamber directors, CVB directors, owners of wedding venues or event organizers that their events are restricted to one day or even a limited in attendance due to lack of room availability in the community. Often, these organizers lament that they would be able to draw more attendees, and from a longer distance, if only they had rooms to accommodate the guests.” According to Mehaffy, this is a common theme in rural areas.

In addition, it is important to ensure communities are providing the necessary accommodations to support their local businesses’ efforts as well. Mehaffy indicated that larger employers often require overnight accommodations to host out of town employees, vendors and customers as well as the need for additional space for meetings and training etc. Mehaffy went on to say, “There is a high level of corporate and commercial demand in many rural areas and it is important that local hotels provide safe and clean accommodations that include the necessary technology to meet these needs. If not, the communities and the local merchants will lose hotel stays and subsequent guest spending to nearby communities.”

In addition, the Foundation has commissioned a GSG Supplement Retail Overview. This Retail Overview provides a demographic and economic overview of the subject area to determine the overall feasibility of a new greenfield mixed-use development. Information and findings will be delivered via professionally designed multi-page Retail Marketing Flyer ready for use by the community/developer in their attraction efforts.

GSG will conduct a retail analysis of the subject area including the 15 minute and 20 minute drive times. The analysis will include a Housing Summary, Traffic Count Profile, Retail Market Profile, Retail Market Potential, Retail Marketplace Profile (Leakage/Surplus), Population Summary and Household Income Profile. The analysis will also include Retail Goods and Services Expenditures for various retail sectors.

Once completed, the Feasibility Study and the Retail Overview will be used to evaluate market demand and attract new investments as necessary.


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