Room for competition? As Yorktowne undergoes renovation, area hotelier raises questions
As the Yorktowne Hotel embarks on multimillion-dollar renovations, one business owner is questioning whether the project will be a boon or a burden to area hoteliers.
Mike Haugh owns and operates the Altland House in Abbottstown alongside his sons, Ryan and Ben. His parents purchased the property in 1954.
Since then, the Haugh family has expanded to six locations throughout Central Pennsylvania through its company, Altland House Hospitality Inc. About five years ago, the family partnered with Gulph Creek Hotels of Wayne and purchased the then-Holiday Inn York Hotel and Conference Center in West Manchester Township for $2.9 million. The property received a multimillion-dollar facelift as it transformed into the Wyndham Garden in York.
Renovations to the Yorktowne have been described as a potential catalyst for revitalization in York. But Haugh wonders whether the project is worth the investment of taxpayer dollars.
“This property will bring very little ‘new’ business to York. It will only hurt the existing business,” he said. “This property has lost money operating for decades, or possibly for its entire life. Throwing tens of millions of dollars doesn’t make success automatic.”
Jack Kay, chairman of the York County Industrial Development Authority, which owns the hotel, did not dispute the Yorktowne’s past losses. But he noted that the hotel’s previous incarnation was badly outdated.
Renovations underway now will bring the historic hotel into modern times and ameliorate the technical problems the property previously experienced, Kay said, though he acknowledged it may not be an overnight success.
“Very often in the first year or two, there is a break-even period or an operating loss because you don’t come fully online right away, so the hotel will probably open up in phases,” Kay said. “Obviously we’d love it to be profitable from day one. That’s not always the case with this type of operation. But we’re not looking at this as something that has a one-year time horizon.”
The renovations themselves are palatable financially thanks to a number of state-funded grants. Kay said there is no way a project of the Yorktowne’s scale could work on a conventional basis. Funding for the project comes from nearly $20 million in grants, foundation donations and private philanthropic gifts, and $10 million to $12 million in historic and new market credits, he added. As part of their agreements, donors have asked that their names not be disclosed publicly.
“Those grants make the ability for the hotel to thrive financially a lot more realistic,” Kay said. “It’s a model that’s been utilized in other communities as this project benefits the entire community. It provides employment, economic stimulus and prevents a blighting influence that would have the opposite effect. Collectively by putting together these sources of capital, we believe the Yorktowne will be in a position to compete successfully.”
Other proponents of the project include John Hughes, dean of York College’s school of arts, communication and global studies. Hughes also leads York College’s hospitality management program and previously worked for U.S.-based cruise company Carnival Corp.
As signs of the Yorktowne’s potential, he pointed to its recent affiliation with Hilton’s boutique brand Tapestry Collection and its relationship with Philadelphia-based GF Management, which will operate the hotel once the renovations are complete.
They would not have attached their names to a project they didn’t believe in, Hughes said.
“The Yorktowne hotel is in the process of being rebuilt because people feel positive about its prospects and have done their homework,” he said.
While there’s no question that the Yorktowne adds a level of competition, Hughes believes that competition will be more between York and neighboring cities, like Lancaster.
With the exception of notable hotels such as the Waldorf Astoria New York, people do not travel to hotels, they travel to cities, said Dmitriy Krichevskiy, associate professor of economics in Elizabethtown College’s business department.
Urban development is often slow and incremental as cities work to create an environment for a specific niche they may want to grow, like arts or technology. From there, restaurants, coffee shops and bars may slowly start growing.
Krichevskiy suggested that York take a page from Lancaster’s redevelopment book. Lancaster invested in creating a welcoming environment for artists and craftspeople.
“This has to go beyond parks and bike lanes, although those are important. Ultimately, this is a question of leadership, resources and incentives,” he said. “One thing to remember here is that Lancaster wasn’t always the vibrant and hip city it is now. It worked very hard to systematically move in the right direction.”