EP Award Promo

Extended-stay hotels extending their reach in Greater Des Moines


With about half of his employees now in Des Moines and the other half spread among several East Coast cities, GCommerce Inc. President Steven Smith has had to do a lot of jockeying for temporary acommodations for his staff in the past few months.

In the process of relocating its headquarters from New York, the software company has been renting several long-term units at the Hotel Fort Des Moines, as well as some rooms at two other downtown hotels: the Des Moines Marriott Downtown and the Embassy Suites on the River.

In choosing long-term lodging for his employees, “I think the criteria has to be proximity to the workplace, and proximity to where people might want to live eventually,” said Smith. Being within a 10-minute walk of the company’s East Village office was appealing to Smith, who didn’t want his employees to have to battle traffic disruptions caused by the Interstate 235 reconstruction to get to work.

Business expansions in Greater Des Moines in the past few years have meant more people relocating to the area, which has fueled demand for extended-stay hotels.

“Within the last three years, we’ve probably increased 30 percent in annual occupancy,” said Stephanie Evans, general manager of Studio Plus, an 86-room extended-stay hotel on Westown Parkway in West Des Moines. The hotel has averaged about a 75 percent occupancy rate during the past year, she said.

At the Suites of 800 Locust downtown, “I would say within the last year we have “seen probably a doubling of requests for long-term rates, which is great for Des Moines because it means it’s growing,” said Chris Gunnare, the hotel’s general manager. Long-term rates for the hotel’s executive-level suites start at $135 per night.

“We’ve seen (the demand) go from maybe three requests per week to five or six per week,” Gunnare said. “With 50 rooms, there’s no way we can say yes to all of those.”

Some investors have responded by buying existing hotels and converting them to extended-stay properties. Westown Parkway Residences, for instance, was converted from an underperforming 100-room Ramada franchise just over a year ago to accommodate extended-stay guests.

“The decision was made because we thought there would be the demand, and there has been,” said Brian Schneider, a spokesman for Schneider Management Co., which manages the property. The hotel has attracted a lot of long-term residents by its high-visibility location, he said, and competes for house hunters and visiting consultants through word-of-mouth referrals. Its daily rates begin at $60 per night but are lower for the low-frills extended-stay units, he said.

Across Westown Parkway, Bob Knapp and Chris Gunnare have been operating the 135-room Valley West Inn as an extended-stay hotel for the past two years.

“It was really just a little tired when we bought it,” Gunnare said. “We bought it, took over the housekeeping staff and turned it around.” In addition to other amenities, it has the same pillowtop mattresses as the posh Suites of 800 Locust, but offers long-term rates that start at $49 per night, compared with $135 a night at the downtown hotel.

“That’s why we bought the Valley West Inn,” Gunnare said. “It gives a variety, to be able to give the best quality and the best value.”

Meanwhile, GCommerce’s Smith has come up with an innovative long-term solution for his company’s temporary housing needs. He and his wife recently purchased a two-bedroom condominium at the Soho Lofts, just three blocks from the office, that will be used solely for potential employees the company is recruiting from out of state.

“With the cost of carrying a mortgage, it’s actually cheaper to do that than use extended stay, and it has a 10-year tax abatement,” he said. “That’s much more economical, in my opinion, and you’re building an asset rather than shipping money out. Nine months from now when it’s finished, it will be a great corporate tool for us.”

oakridge web 090123 300x250