This 50-key Ramada by Wyndham is located in Spirit Lake in northwestern Iowa near the Minnesota border. Built in 1995 and situated on a 1.5-acre lot the property features a variety of amenities including refrigerators, microwaves, flat panel televisions, an indoor pool & hot tub, business center, guest laundry and continental breakfast.
The primary demand generator in the area is the Iowa Great Lakes which are comprised of a group of natural lakes headlined by Spirit Lake and East & West Lake Okoboji. In addition to the lakes the area boasts a number of state parks. Recreational activities offered in the area include swimming, fishing, water skiing, boating, sailing, snowmobiling, cross country skiing and ice fishing. The property experiences significant seasonal demand in the summer months. Each winter the community hosts the Winter Games which brings thousands of visitors to the area. Arnolds Park Amusement Park is also located less than five miles from the property.
Major employers in the area include Polaris (450 employees), Pure Fishing (300 employees), Roseboom Machine & Tool (300 employees), Lake Regional Hospital (230 employees) and Maritime Museum Properties (150 employees). Polaris Industries, the area’s largest employer, is located across the street from the Ramada.
This absentee owned property has been well maintained and work on a new roof is set to commence in the near future. Like most US hotels the property experienced a setback in Q2 & Q3 of 2020 but in Q4 revenue returned to 2019 levels and early 2021 numbers suggest this trend will continue.
While the property warrants interest from all types of hospitality investors it is a particularly good fit for owner-operators looking for high cash flow opportunities. Prior to COVID the property achieved an ADR of over $100 in 2018 & 2019. Despite the impact of COVID the 2020 ADR was still at a healthy $88. This combined with the manageable room count and occupancy make it plausible for an owner/operator to run the property on their own or with a minimal staff which would present the opportunity to improve upon the already present cash flow.
Investors will also have the opportunity to evaluate re-branding the property as the current franchise agreement expires in 2021. It is our understanding that the Ramada flag is still an option going forward but the number of Wyndham properties in the market may make exploring a Choice or Best Western product worthwhile.
Please contact us if you need any additional information or would like to discuss this opportunity.