by ASIF LAKHANI
The coronavirus pandemic has put life as we know (or knew) it on pause not only for Americans but also for people all around the globe. It seems as if every industry has been impacted by the virus, some feeling it worse than others. Tourism companies and the hospitality businesses are among some of the hardest hit by COVID-19. As a result, travel bureaus around the country are working to create solutions to help restaurateurs and hoteliers during this tough time.
In Des Moines, IA, sustainable measures have been put in place to ensure that hospitality, leisure, and tourism businesses are not neglected by local governments or consumers. The capital city’s tourism and travel bureau, Catch Des Moines, has been leading the charge.
When knowledge of the pandemic and its potential impact became known to the general public in mid-March 2020, Catch CEO Greg Edwards wrote a letter to hotel executives in the Greater Des Moines area assuring them that they are still viewed as “the biggest asset of our tourism community.” Edwards also announced the rollout of his team’s crisis plan that is being enacted to mitigate the impact the virus has and will have on their businesses.
One element of the crisis plan is informing companies under Catch’s umbrella about the Iowa Small Business Relief Program, developed by the Iowa Economic Development Authority, about grants ranging from $5,000 to $25,000 to cover costs, defer eligible taxes, and waive interest penalties for disrupted businesses. Debt relief and bridge loans are being offered as well.
Catch Des Moines has increased its communications frequency, sending a “Des Good News” newsletter about feel-good stories from the community out weekly and driving a new social media initiative with the hashtags #DSMLocalChallenge and #CATCHdsmlocal for people to show their support and provide updates for local organizations. The hashtags had four million impressions from Friday to Sunday on the first weekend they were rolled out. A local tech company also set up the website 515local.com for restaurants to post their hours, availability, and more in one place.
The self-proclaimed “fastest growing area in the Midwest,” Des Moines, IA, also might be the region’s best kept secret. While more than a million visitors come annually for the state fair, there are more than a dozen other sites for visitors to see and opportunities for hoteliers to invest and grow.
Tourism generated $2.2 billion in total spending from 13.7 million visitors in 2016, according to Catch’s data. The average age of visitors to Des Moines was 42.1, with women slightly edging out male travelers percentage-wise. Roughly 5.2 million of the travelers were overnight stays, however, while 8.5 million just made day trips. This could be attributed to Des Moines being less than a six-hour drive from Chicago, St. Louis, and Milwaukee.
There are currently 13,000 hotel rooms in the Greater Des Moines area, Edwards said. Hotels had about 65-percent occupancy for an ADR of $105/night, he added. Conference and banquet room rentals are exempt from Iowa’s 5-percent excise tax on room rentals, up to 7 percent in taxes on hotels/motels, and 6-percent sales tax, per the Iowa Dept. of Revenue.
Des Moines plans to bring seven new hotels with about 800 total rooms online in the next few years, Edwards says. One of the biggest hotel projects is a Hilton renovation to an early 1900s historic building originally known as Hotel Fort Des Moines, to which the Downtown Des Moines (DSM) development authority contributed $37 million. The finished property will be rebranded as the Hilton Hotel Fort Des Moines – a part of the Curio Collection – and have 290 rooms. It is scheduled to open later this year. Hilton also is bringing a 98-room hotel to the edge of downtown Des Moines with a grand opening targeted for 2021, according to the Des Moines Register. The $15.5-million hotel will be part of the Tru by Hilton brand and is the company’s second hotel of its kind in Iowa. Tru by Hilton hotels are designed to have playful atmospheres and emphasize affordability and sustainability to draw younger professionals. Element by Westin plans to open a brand-new 112-room hotel in Des Moines’ East Village by summer 2021, according to the Register. The city agreed to contribute $2 million in a tax increment finance grant to developers. The total cost of construction is roughly $21.5 million, per the report.
As of press time, most hotel construction was scheduled to continue despite COVID-19 slowdowns.
In terms of other development, the Greater Des Moines Partnership’s Downtown Des Moines initiative has invested $3 billion into development in the past 10 years and proudly boasts “an average of 40 ongoing development projects happening at any given time.” Development incentives include revolving loans (using repayments from outstanding loans for other businesses), site development, tax abatement, land banking, and more.
From an annual tourism perspective, the biggest draw of all is the annual Iowa State Fair, which has had more than one million visitors every year since 2002, according to the event committee. This year’s event was scheduled to take place August 13-23. Des Moines also planned to host the 70.3 Ironman Triathlon for three consecutive years starting in June 2020. The effect of the pandemic on both events is unknown at this time. In the past, Des Moines has held other marquee events such as Hamilton and March Madness in addition to agriculture conferences and more.
There are also hundreds of miles of trails to explore in the Greater Des Moines region. Des Moines also will be home to the largest outdoor skatepark in the country once the Lauridsen Skatepark officially opens in downtown. The 88,000-square-foot skatepark, located alongside the picturesque Des Moines River, has been in the works for years and had its $6.3-million price tag paid via fundraisers, donations, and grants. The skatepark has the capacity to host major competitions and accommodate 40,000+ visitors a year, according to a newspaper report.
The city has hosted multiple rounds of the NCAA Men’s Basketball Tournament in the past as well.
Prior to the pandemic, Des Moines was gaining traction as a secret gem of the Midwest because of its affordability, livability, charm, natural scenery, culture, (legitimate) skyline, and emerging prosperity. Once the pandemic subsides, it’s very possible that the Greater Des Moines region could become the next great American destination for those reasons in addition to its urban planning and development potential.
Investment and development opportunities for hoteliers to keep in mind in Des Moines:
- UNDER CONSTRUCTION
The Lauridsen Skatepark will be the home to the largest outdoor skatepark and will be equipped to host major competitions.
The city agreed to provide $2 million in a tax increment finance grant to developers.
Des Moines has hosted large events, such as the USA Gymnastics Championships, increasing the need for hotel rooms.