by Dan Rafter
The Bakken region of North Dakota is booming, what with rigs pulling a seemingly endless stream of oil from the earth here. And with a boom comes new residents both permanent and temporary. It’s easy to think that anytime a new hotel, supermarket or convenience store opens here, it will automatically succeed.
But that’s not always the case.
Just ask Michael Houge, vice president of the investment services group in the Minneapolis office of commercial real estate company Transwestern.
Bakken Properties, LLC opened the Dakota Landing long-term stay hotel in Williston, N.D. – the heart of the oil-producing Bakken region – in the early fall of 2013. The 240-room hotel would seem to be a perfect fit for the area: All those workers called in to help remove the oil from the ground here would need a place to stay.
But for months, this hotel had far too many vacancies each night. So Houge and his team at Transwestern were called in to market the property.
“The hotel came into the market a bit late,” Houge said. “If you had built a hotel in Williston two years earlier, it would have been an easy sell. It could have just sat there and it would have leased up in no time. Both corporate users and oil-company tenants would have been happy to lease its rooms on a long-term basis.”
This wasn’t happening at the Dakota Landing. But that’s changed. Today, the hotel’s rooms are booked. Often, its managers have to turn visitors away because there are no vacancies.
What’s changed? The team at Transwestern rolled out some old-fashioned marketing. And soon the workers and visitors to this region knew all about the Dakota Landing.
Making a change
The biggest challenge that the owners of Dakota Landing faced? They opened their hotel too late, both in the year and in the market.
First, there was the timing of opening the hotel in early fall. By this time of the year, much of the activity around the oil industry grinds to a halt. The drilling continues, of course. But everything that happens around that drilling – the construction and infrastructure work – wraps up until the warmer weather returns. Winters in North Dakota, after all, can be brutal.
At the same time, the young real estate market in Williston slowly began to mature. Two years earlier, there were precious few options for workers when it came to housing. By the time Dakota Landing opened, though, the housing market in Williston and its surrounding areas now offered more options for workers. Dakota Landing got lost in these options.
“They hit the market in October when the season starts to slow down. They had done very little advance marketing before opening the hotel,” Houge said. “You can talk about something, but in North Dakota if you don’t have it open already, people just consider it talk. They see a lot of projects promised that never become reality. It’s a bit of a big hat, no cattle situation. People don’t trust until something is actually coming out of the ground.”
Dakota Landing also lacked an affiliation. The hotel was not part of a chain such as Sheraton or Marriott. This meant that the owners couldn’t take advantage of the marketing power of a larger chain.
Houge viewed all of this as a challenge. He and his team began making phone calls to promote the property. They send PDFs highlighting the hotel’s benefits to local decision-makers. They offered discounted rooms for people to rent.
And in March? These results began paying off. It’s not rare for the hotel to be 100-percent full today. At the time that Houge and his team members received their assignment to market the hotel, it rarely broke the 20-percent full mark.
“Part of the reason is good marketing,” Houge said. “We really focused on getting people to try the hotel. And once they tried it, they liked it and came back. It appeals to the middle of the market.”
The big difference between Dakota Landing and typical hotels in its price range? This hotel focuses on amenities that appeal to the workers who are making the region’s oil economy boom.
For instance, the hotel features an indoor boot room with sinks. This might seem like a minor amenity. But it gives workers a chance to clean themselves and their clothing before they enter the hotel. It’s an appreciated amenity.
The rooms themselves are large with 40-inch flat-screen TVs. The hotel’s food service offers two meals a day. It also provides packed bag lunches and a limited room service menu.
There’s an onsite fitness center, pool and lounge with bar. The hotel offers laundry services and onsite security.
“There is a lot to recommend about this hotel,” Houge said. “The price point is appealing. We are not overpriced like a lot of our competitors in the area. Guests get a lot of bang for their buck. The rooms here are big. We have good people working here, too. It’s a very good experience for our guests. It’s not just salesmanship that brings the guests here. They stay here because it works very well for them.”
And the owners just took what might be their last step to long-term success in the region: They affiliated with a major hotel brand. Earlier this fall, the owners affiliated with the Ramada chain. As of the writing of this story, construction workers were changing the hotel’s signs and colors. The property’s new name will now be Ramada Dakota Landing.
Houge now says that the Dakota Landing is positioned to succeed in this booming region. And he’s looking forward to seeing all those rooms rented on a near-nightly basis.
“The Bakken area is so important to the country right now,” Houge said. “So many businesses are here because of the black stuff being pumped out of the ground. We have archeologists here who have to walk every square inch of a drilling site to make sure nothing of archeological significance will be disturbed. We have people setting up electrical connections and wireless antennas. People from every state in the country are working here. The region is fueling our entire economy. Being part of it is wonderful.”