Wherever oil, natural
gas or other essential resources can be extracted from the earth, hotel demand
is certain to follow. That creates headaches for travel buyers who suddenly must
procure lodging in a hotbed that one year earlier may have been a one-stoplight
town, and hoteliers are unable to effectively capitalize on the boom. Developers,
after all, are not exactly keen on spending millions of dollars to build a
hotel in a rural area that easily could be sleepy again within a decade.
In a few months, hotel
investment company Banyan Investment Group will debut its own solution to this
challenge in one of the United States' most lodging-strapped rural regions:
North Dakota. The Shut Eye Hotel in Alexander, set for an April 1 opening, was
designed to "look and feel like any other branded, upper-end
select-service hotel," according to Banyan chief investment officer Andy
Chopra. But there is one exception: This hotel will take a few months, not
years, to build.
Banyan partnered with
Proteus On-Demand, a Georgia-based company that specializes in temporary real
estate projects, to design and build the hotel. Individual rooms are built
off-site and then assembled into a hotel on location. They are sturdy enough to
be stacked in multi-story arrangements and connected with a roof system and
atrium, a must for brutal North Dakota winters, said Proteus On-Demand CEO Theo
projects already are fairly common in Europe, particularly in space-constrained
areas, but are relatively new to the United States, Bieman said. Although
Americans initially might equate "modular hotel" with "trailer
park," Bieman pointed out that luxury cruise cabins are built the same way.
"Rooms built for a
cruise ship are much more pleasant and elegant than a trailer," he said.
"This also creates enormous flexibility to specific demands. We could use
modular units to create a studio-type hotel, as opposed to traditional rooms."
Alexander's 70-room Shut Eye Hotel as a "mini-Embassy Suites."
"[Rooms] open up
into a climate-controlled atrium area," he said. "There's
complimentary breakfast, wireless Internet, flat-panel televisions—the
experience you're used to in a select-service hotel."
contracts is one of the company's goals, Chopra said, and Shut Eye already has
fielded calls from local corporations looking to strike room deals. He added
that he intends to keep occupancy split about evenly between transient and
extended-stay guests. While extended-stay demand is tremendous in North Dakota—enough
to completely fill the hotel—keeping a balance will help the company maximize
revenues, Chopra said.
Although many developers
were skeptical of the modular concept, they began to warm to it when Banyan
presented at last month's Americas Lodging Investment Summit in Los Angeles.
Since then, Chopra said the company has been approached by groups facing
similar demand situations in Texas, Alberta and as far away as mining camps in
Such projects could meet
temporary hotel demand scenarios besides boomtowns, including major citywide
events or disaster relief efforts, Bieman said. The modular hotels do not
require traditional utility hookups and can run on generator power and bladder
bags for water.
They also require no
foundation, which cuts building costs by about half, Chopra said, and also
minimizes the environmental impact. When demand subsides, the hotel can leave
with it, leaving little trace behind.
"North Dakota has
seen the effects of two previous oil booms, and those have not necessarily been
pleasant experiences," Bieman said. "It's a sensitive issue with the
local people, and we consider ourselves guests of them as well. Even if this
lasts 30 years, it's very important that we are able to move on if necessary
and return everything as we found it."