PETER R. BARBER/GAZETTE FILE PHOTO
The Courtyard by Marriott at Mohawk Harbor in Schenectady opened in October.
The hotel tax
Most municipalities have an occupancy tax that is charged every time someone spends a night in a hotel, motel, bed-and-breakfast or other accommodation. Schenectady County has been seeing its revenue increase as more hotel rooms open for business, and it is expecting an even bigger jump in 2017. County spokesman Joe McQueen provided the following information:
› Schenectady County’s occupancy tax rate is 4 percent.
› The county will asking the state Legislature in January to boost the tax rate to 5 percent.
› All occupancy tax revenue in the county must be spent on arts, tourism or historic preservation.
› Actual 2015 occupancy tax revenue was $376,827.
› Projected 2016 revenue (revised May 1 to reflect first-quarter results) is $425,000.
› Projected 2017 revenue is $731,000.
› $392,000 of that $731,000 will go to the county’s newly created convention and visitors bureau and its three-person staff.
› $200,000 will go to Proctors.
› $130,000 will go to special county-run events, the largest being SummerNight.
› $50,000 will go to the County Initiative Program, which provides grants of a few hundred to a few thousand dollars to nonprofi ts.
› $28,000 will go to the Empire State Aerosciences Museum.
› $15,000 will go to the county historian.
› That all adds up to $815,000, well more than the $731,000 budgeted for 2017 — this is because more occupancy tax revenue is coming in than was expected or will be spent in 2016, and the excess will be rolled over into 2017.
PETER R. BARBER/GAZETTE PHOTOGRAPHER
Work continues last week on the Homewood Suites being built adjacent to The Waters Edge Lighthouse restaurant in Glenville.
Sleek new hotels being built in and around Schenectady are beginning to relieve a long-standing shortage in the area, the effects of which have been felt by — and partly created by — major business, academic and cultural institutions in the city.
The arrival of hotels is being welcomed by the business community, which has long had to send corporate guests to hotels in Albany or Saratoga counties. It may also shake up the price structure for rooms in and around the city, as more locations create competitive pressures on room rates.
Finally, all the new hotel rooms are going to generate greater occupancy tax revenue for the county, which uses that money to attract more visitors to the area, thereby generating more hotel tax revenue.
The newest hotels on the landscape are:
› Courtyard by Marriott at Mohawk Harbor, 124 rooms, opened in October.
› Homewood Suites, across from Mohawk Harbor in Glenville, 105 rooms, on schedule for a spring opening.
› Rivers Casino & Resorts, 163 rooms, also at Mohawk Harbor, targeted to open next summer.
‘My own gut reaction is they’re going to do fine. I think we have a ways to go before they saturate the room demand.’
PHILIP MORRIS Proctors CEO, on new hotels being built in area
Another relatively new option is a 120-room DoubleTree by Hilton that opened on Nott Terrace in November 2015, replacing a timeworn Holiday Inn.
And one of the earlier parts of the downtown revitalization included construction of a 93-room Hampton Inn & Suites at 450 State St. That hotel opened in 2007.
Finally, the owners of the low-rise Scotia Motel have received approval to replace it with a three-story, 65-room Comfort Inn & Suites. They expect to start work by June and open in the fi rst quarter of 2018.
There are other accommodations around Schenectady County, some of them luxurious. But there have not been enough to serve both business and recreational travelers.
One of the biggest local consumers of room space is Proctors; the downtown performing arts center books or causes to be booked thousands of room-nights per year.
CEO Philip Morris said theater casts and crews need to be accommodated while performing or preparing to perform, as do theatergoers who come from a distance.
It’s nice, he said, when they can work, eat, sleep and be entertained all within walking distance of downtown. Having the Hampton Inn just down the block isn’t enough, Morris said, and the shutdown of the Holiday Inn was a logistical disaster. But the Double-Tree has been a big help since it reopened, he said.
Proctors might book hotel rooms for a musical act traveling with a few technicians, but a big touring production will typically book its own rooms, Morris said.
“They seek our advice, but once we don’t have anything, they just bid it. They prefer to be close, but once they’re not close, it doesn’t matter how far they have to go.”
Cast and crew — a minimum of 75 people for a touring Broadway show — wind up sleeping out of town and needing to be bused back and forth.
Morris doesn’t anticipate a hotel-room glut developing as all the new hotels come online.
“My own gut reaction is they’re going to do fine,” he said. “I think we have a ways to go before they saturate the room demand.”
GOOD FOR BUSINESS
The biggest source of room demand for business travelers in the Schenectady area is General Electric. Its Global Research facility in Niskayuna draws more than 35,000 visitors a year, a spokesman there said. Closer to the new hotels, the campus at the foot of Erie Boulevard in Schenectady is the headquarters for the GE Power division, its Onshore Wind business and its Gas Power Systems business.
Spokeswoman Chris Horne said the complex hosts more than 20,000 guests each year.
“We’re very happy to see additional hotels coming to fruition in Schenectady,” she said. “More availability and options will help drive greater convenience and productivity for our GE guests from around the world.”
Another big generator of hotel business, though not a constant one, is Union College.
Spokesman Phil Wajda said the three biggest events at the college are homecoming, reunion and commencement, all drawing large numbers of graduates, friends and families from out of the area who need places to stay. October’s homecoming drew 2,000 people from 800 families, he noted.
“We bring in hundreds of people for these events, and there aren’t enough rooms. We get complaints all the time,” he said.
Wajda noted also that new hotel rooms might create some price stability.
“From a competition standpoint, this is good news,” he said. “We’ve actually had complaints from folks that the hotels raise their rates around our events. Hopefully this helps.”
Apart from the big events a few times a year, Union draws smaller groups of out-of-towners more frequently for job interviews or admissions open houses.
“A good chunk of those folks need a place to stay,” Wajda said. “In the past, we’ve had to push them out toward the airport.”
The Waters Edge Lighthouse owner Pat Popolizio said the new hotel being built on the riverfront in Glenville is going after all segments of the market: business travelers, people visiting their parents, families of Ellis Medicine patients and even boaters on the Mohawk River. And not least of all, the hotel will cater to those coming to his banquet operation, right next door.
“I think what we have is a great restaurant and a banquet facility,” he said. “Sometimes, we send a lot of people to other hotels. Many times, they have to go out of town.”
All 106 units at the new Homewood will be extended-stay suites, suitable for business people in town for longer than a few days but not long enough to seek more permanent housing. Popolizio has had guests associated with General Electric, Golub Corp. and Union College at the little fi ve-room inn above his restaurant, and he expects that to continue on a larger scale at the new hotel. (The fi ve rooms will remain in operation, too, he said, probably for overfl ow situations.)
The hotel is a collaboration between Popolizio and Queensbury-based Oakfield Hospitality.
Popolizio worked for half a decade to make the project happen. He owns the land on which the hotel sits; Oakfield is the hotel developer and will be the operator.
Two companies with worldwide operations headquartered up the hill and over the border in Niskayuna also like their proximity to the new hotels coming to Schenectady County.
SI Group communications manager Tara Morgan said the specialty chemical manufacturing fi rm has 2,700-plus employees in 10 countries, a small but steady percentage of them shuttling to or from the Balltown Road headquarters at any given time.
“We have employees daily flying in from countries all over the world for meetings in our Niskayuna offi ce,” she said. “So [the hotels] will certainly help us.”
There are also out-of-town clients and potential customers visiting SI Group, and the company assists them with finding hotel accommodations, Morgan said. The downtown area’s dining, lodging and entertainment options are a nice package to offer them, she added.
“We’re generally very excited about all the development happening in Schenectady,” she said. “It makes us very proud to be part of the community.”
Environment One Corp., which manufactures sewer and turbine equipment off Balltown Road, is another local company with a worldwide reach. Spokesman George Vorsheim said Environment One has clients in 40 countries, and when they come to the Niskayuna headquarters/factory, they need a place to stay.
“For a long time, we were not booking people in Schenectady because of that shortage,” he said.
Rachael Seiler, who coordinates meetings and events for Environment One, said some hotels are adding business shuttles for nearby companies like hers, making it not critical to be within walking distance.
“The hotels are making it as easy as possible to highlight Schenectady,” she said. “Certainly, the casino is going to help as well. It’s kind of a package that makes staying close to Environment One more enjoyable.”
NO LONGER STUCK
One of the best business-traveler setups is in the region would have to belong to Transfinder. The company sells software to design more efficient transportation routes. It then trains clients on the software’s use at its State Street headquarters — right next door to the Hampton Inn, where it books rooms for most of the trainees.
“We certainly have had a great relationship with the Hampton Inn,” said Frank Gazeley, Transfinder’s vice president of client relations. “Very rarely have had we had an issue with that.”
About once a month, the company brings transportation managers, mainly for school districts, from all over the country for one of its three-day Transfinder University sessions: 20 people at a time on average, all of whom need hotel rooms.
Even after Transfinder opened a training center in Texas, and as it prepares to do training elsewhere in its On The Road initiative, it still is increasing the number of training sessions in Schenectady. That means a greater need for hotel rooms.
As it is, Gazeley said, the company has to check the horizon to avoid scheduling Transfinder University sessions during other big events, including graduation season.
“There’s been times when we’ve been stuck a little bit. It depends on the time of the year.
“I think it’s good news all around,” he said of the new and soon-to-open hotels.
Reach business editor John Cropley at 395-3104, email@example.com or @cropjohn on Twitter.