To the Editor:
Great Barrington has been undergoing a renaissance, building a robust regional economic center, expanding its residential base and a creating a community that cares. We should not risk destroying it. The Select Board should deny any special permit to build a hotel more than 45 rooms by demolishing Searles. More suitable avenues should be explored.
To see what’s at stake, let’s compare Great Barrington’s revenue profile with others.
Shown below are lodging and restaurant gross revenues for nearby towns.. Lenox’s hotel revenues (solid bars) at $30 million are the largest and is understandably driven by famed attractions such as Tanglewood, Canyon Ranch, The Mount and nearby, Chesterwood, and Norman Rockwell Museum. Even though its population is only 5,000 vs. Great Barrington’s 7,000, its overnight tourism is four times larger.
In restaurant gross revenues (stripped bars), Great Barrington’s $33.7 million is the highest of other towns shown. Besides a healthy, “eat and meet” climate, our “farm-to-table” trend has a “multiplier effect.” It supports the production of underlying goods and services, diversified employment and marketing outlets like its retail stores and large farmers market. “Buying local is the theme,” different from national brands that shift profits out of our locality.
The ratio of hotel vs. restaurant revenues also indicates major differences. Great Barrington’s lodging business is one quarter the size of its restaurant business indicating diners are not primarily overnight tourists staying in hotels. In general, they are visitors with a deeper involvement, with family, schools, and commerce. In Lenox, lodging and restaurant revenues are nearly equal, attracting overnight tourists when its national sites are open. Our economy is less seasonal.
The two towns’ financial bases show different dependencies on tourism. Great Barrington’s lodging and restaurant taxes combined are only 5 percent the amount of its residential real estate taxes, whereas, Lenox’s is 19 percent. Many people value our year-around economy that anchors Great Barrington. The magnet is our Village Center and its distinctive offerings.
These statistics shed light on Mahida team projections. According The Edge article, they forecast the proposed hotel to add another $3.2 to 4 million of gross revenues to the average annual town-wide lodging revenues of $7 million. That would amount to a 45 percent increase, not likely, since the average annual growth rate has been 5 percent.
One major point is sorely missed. Whatever Mahida’s gains might be, they are not the Town’s net gain because our tourism growth is not at the level they project. Thus, where could the growth come from? The only answer I surmise is by taking market share from other competitors. Thus, Mahida’s gain will be others’ lost. Other hotels, B&B’s, restaurants, facilities like Crissey Farms, and shops will lose business, impacting tax revenues. Franchise financial demands have big appetites and will squeeze out local business. Guests are encouraged to use their wallets onsite.
Using an accounting firm to verify marketing projections is a rudimentary way to create PR. Smith and Watson is a fine accounting firm, but they are not market analysts. It’s a different discipline.
Marketing professionals consider a multitude of variables in projecting revenues: estimates of industry and sub-segment growth, supply and market demand, competitive forces, price sensitivity on market share and such. Then there are economic assumptions (i.e., consumer price index and its effect on discretionary income, energy prices).
In fact, sea changes are destabilizing the hospitality market. December’s New York Times highlights the consolidation of the hotel industry. Experts point to the $100 billion global vacation rental market as putting pressure on hotels. As hotel acquisitions in November reached a record $13 billion, industry experts predict that consolidation will be similar to the airline industry.
Closer to home, one only has to search online for vacation homes in the Berkshires. This trend will affect local hotel. Hence, the proposed hotel will add risk to our village profile.
At the socio-economic level, we could potentially reduce our residential tax base. We will take a large gamble and may very well experience a decline in home values. Remember, a tax base decline of just 2 percent would cancel out $375,000 of taxes from a new hotel.
Would Lenox put an oversized, historically unauthentic hotel in its Village Center? Why would we?
Sharon Gregory
Great Barrington
Sharon Gregory has been a Berkshires homeowner for 38 years. After a career in finance, market analysis and planning for large (IBM, Citibank) and small software firms, she served as Vice President of Corporate Development at Iredale Mineral Cosmetics and retired two years ago. Active in local boards and civic affairs, she has recently served as Chair of Great Barrington’s Finance Committee.
