Happy Valley Hospitality Leaders Talk Future of the Industry

01/25/2022

As the pandemic continues to present the regional hospitality industry with challenges, tourism and hospitality leaders alike are pivoting to find success in new areas.

The Scholar

In late 2019, the hospitality landscape in Centre County was looking pretty rosy. The Central PA Convention & Visitors Bureau had just rebranded as the Happy Valley Adventure Bureau. At that time, the organization reported that 4.3 million people had visited Centre County in 2018. The Graduate State College had opened in the former Atherton Hotel building. New restaurants appeared in downtown State College, including BRGR, in the former Citizens Bank building, and Hello Bistro just a few steps away. Initiatives were underway to bring new tourism opportunities to the region, including sports tourism that would ensure visitation even when Penn State (and Penn State’s football season) was not in session. 

“I think the Happy Valley Adventure Bureau has done a really good job in promoting the area, but also pivoting with this new environment we're in, to find new opportunities.”

And then, in March 2020, all but essential businesses shuttered, unsure of what would happen next. Now, the hospitality and tourism industry in Happy Valley has its sights set on recapturing business travel, while looking forward to continued efforts to take advantage of the previously planned sports tourism initiative. The efforts have inspired a lot of hope, with one hospitality leader noting, “I think the Happy Valley Adventure Bureau has done a really good job in promoting the area, but also pivoting with this new environment we're in, to find new opportunities.”

Revise, Reframe, Rebound

The pandemic forced businesses here and everywhere to reevaluate their standard operations and get creative. Happy Valley’s hospitality industry knew it had to rise to the occasion, and over the next 18 months, that’s exactly what it did.

The Scholar Hotel State College, situated in the historic Glennland Building on East Beaver Avenue, opened to travelers in early 2021, with the Scholar brand’s founder and Penn State graduate Gary Brandeis at the helm. The Scholar brand was formed after Brandeis’s Real Estate Capital Management LLC purchased the Fraser Centre in downtown State College and opened the Hyatt Place, which, he says, highlighted the benefits of opening a property in the vicinity of a large college campus. 

 “What we found, overall, is that, when the students are on campus, the hotels are busy. It may not be a football weekend, but there's so much happening on campus that there's always a reason for people to come to Happy Valley on the weekends."

“We just started to see that having a close affiliation with, or being in close proximity to, a major university really eliminates a lot of the traditional risks associated with the hotel business,” Brandeis says. “We started to put those two things together and said, ‘Boy, this could really be a specific strategy for us as sort of a sub-market or a niche development opportunity in the hospitality business.’ So we started to form a business plan around that and we created the Scholar name and brand, and then we opened the first Scholar hotel in Morgantown, West Virginia, at West Virginia University. Then, we opened up the second Scholar in Syracuse, New York, at Syracuse University. Then the third was the Scholar here in State College.” 

However, as Penn State sent students home and the flow of business travelers to and from the university came to a halt, those benefits from being located near a major university seemingly vanished. Brandeis and his team pivoted. They revised their plan, and, before opening to the public, focused on serving a new market: international students.

“When the pandemic hit and the students were sent home or didn't return back from spring break in March of 2020, we did find ourselves with the opportunity to house a lot of foreign students that were on campus at Penn State,” Brandeis explains. “There were opportunities like that, that we saw that we wouldn't have if we weren't near a major college university, which really helped us. It didn't cure the problems that we had or the challenges that we had, but it certainly softened them a bit.”

The challenge of adjusting to a new mode of pandemic-era business was something that Penn State saw at its hotel properties as well. The Nittany Lion Inn was converted to student housing fairly early on, while The Penn Stater Hotel & Conference Center at Innovation Park turned its focus from business travel to transient business.

"Sports travel is a segment that can really move the economic needle, and extend weekend hotel occupancy, which will help make up for lighter weekday levels.”

“Penn State, for a while, was not hosting meetings,” explains Brendan Fullam, marketing strategy specialist at Penn State, “and the percentage of revenue for the Penn Stater from Penn State meeting events is like 60–65%. So when that’s not happening, you're at a severe disadvantage right off the bat.” He notes that, in the fall of 2020, The Penn Stater shifted its focus toward a transient audience, hoping to find a new group of travelers to attract to the region. “The booking window for corporate events is much longer than transient events or transient business, so the recovery is slower. So, despite the fact that the Penn Stater is not typically thought of as a transient place, I think, at least for a while, it makes sense to position it that way.”

Recapturing the Business Crowd

But while properties like The Penn Stater and The Scholar Hotel State College have effectively pivoted to remain open over the pandemic, they’re still eager to recapture the business crowd, as business travel returns even in the face of new Covid-19 variants. The constantly evolving landscape provides its own challenges and both Brandeis and Fullam mention operations currently seem to be in a “two steps forward, one step back” cycle.

“Data showed that there seemed to be an uptick in meeting inquiries last June, July and August, and then that dropped off again in September 2021, back to what it had been for the previous 15 months,” says Fullam. “If we look at 2017, ’18, ’19 and the first month of ’20, we pretty much had an increase [in inquiries] over the previous months for that whole period of time. Then, obviously … 2020 happens and then it was probably 10% of the inquiries we would have had, up until last June, July and August, and then at that point they were almost up to what they were previous to COVID, and then they kind of fell off again. It's not a very fun game.”

Over the last six weeks, though, Fullam says meeting and event inquiries are beginning to rebound, but part of that can also be credited to the ways The Penn Stater’s sales team has made booking an easier option for meeting and events planners. They are offering new perks like lenient cancellation policies, and extra marketing efforts such as using third-party meeting booking platforms like CVENT. 

"I think the Happy Valley Adventure Bureau has done a really good job in promoting the area, but also pivoting with this new environment we're in, to find new opportunities.”

Recapturing the business travel crowd is also proving a challenge at The Scholar Hotel State College, even though Penn State-related weekend travel is, in many ways, back to normal. In fact, according to one interview with Fritz Smith, president and CEO at the Happy Valley Adventure Bureau, the region achieved record football weekend hotel revenue during the 2021 Penn State football season, with total revenue climbing to $13.2 million over home game days. Additionally, July 2021 weekend occupancy was higher than pre-pandemic numbers in 2018 and 2019, even without large events to attract tourists. 

Brandeis says, “What we found, overall, is that, when the students are on campus, the hotels are busy. It may not be a football weekend, but there's so much happening on campus that there's always a reason for people to come to Happy Valley on the weekends. The challenge is going to be … getting that Sunday through Thursday business back, which tends to be business travelers and people that are coming into the area for more business-oriented focuses as opposed to leisure — and that's going to take some more time and, obviously, we have to see what happens with some of these variants.”

Finding New Opportunities in Sports Tourism

Looking to the future, both Fullam and Brandeis place a lot of stock into what the Happy Valley Adventure Bureau can do for the region and its hotels, in terms of bringing more business travel to Happy Valley, as well as new forms of tourism that have not received as much attention in the past. 

Fritz Smith notes, “Business travel was particularly hard hit by the pandemic and has been the last segment to rebound. It is beginning to bounce back, just at a much slower pace than leisure and sports travel. Overall, we are seeing a much greater impact from sports visitation, and it will be an area of considerable focus moving forward, with the creation of The Happy Valley Sports and Entertainment Commission. Sports travel is a segment that can really move the economic needle, and extend weekend hotel occupancy, which will help make up for lighter weekday levels.”

Fullam serves on the marketing committee at the Happy Valley Adventure Bureau and is likewise excited about the opportunities that sports tourism can bring to the region and its properties. “There aren’t a lot of facilities in Pennsylvania that aren’t here… There are new sports facilities in Bellefonte. Out by the airport, there’s a new indoor soccer venue that’s hosting soccer tournaments. The infrastructure is here … State College is weird in that, for about 12 weekends per year, there aren’t enough hotel rooms, and for 40 weeks per year, there are way more than you need. There are typically weekends where there’s nothing happening and hotel occupancy on the weekend is 60%. There are rooms. There are extra places. So, it makes sense to do this.” 

“I think the Happy Valley Adventure Bureau has been really proactive in looking for new opportunities. They just formed a sports commission and they're doing some analysis right now on helping improve the visibility of the sports facilities in and around Happy Valley, Penn State and State College to attract more non-Penn State sports events, whether it's high school tournaments or things like that,” adds Brandeis. “Hopefully we'll see that subcommittee and that commission bear some fruit maybe in 2023, as the statistics are built up and we can look at some data and see where we can improve things. I think the Happy Valley Adventure Bureau has done a really good job in promoting the area, but also pivoting with this new environment we're in, to find new opportunities.”

The Happy Valley Adventure Bureau also notes that it will be hosting the Pennsylvania Bus Association’s Annual Conference in the summer, welcoming more than 100 tour bus operators to generate immediate economic benefits from the event itself, but also promoting future opportunities to tour operators. The Bureau is likewise partnering with the Chamber of Business & Industry of Centre County to host the Pennsylvania Economic Development Association Annual Conference in the fall. Additionally, the Mid-Atlantic Tourism Public Relations Alliance will host its annual media marketplace in Happy Valley in October, bringing a large number of travel writers and destination marketing organizations to the region. 

What do you think? Do you feel Happy Valley’s hospitality industry has appropriately rallied around new tourism opportunities, proving a hero in the midst of pandemic challenges? Or do you think there’s still work to be done? What do you think could be done to increase business (and other) travel to the region? Let us know in the comments below!

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