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Too many rooms?

Dave Sullivan
Northern News Services

Yellowknife (Jun 13/01) - With more than 750 hotel and motel rooms in Yellowknife, business is hurting.

About 240 of those rooms have been added in the past six months, and there is "absolutely not" a corresponding increase in visitors, according to the Explorer Hotel's Harry Symington.

Right now, he says, Yellowknife's hotel business is "very fragile," with a meagre 40 per cent occupancy rate.

Yellowknife Inn manager Shawnette McNeil agrees with the Symington's estimate, noting there are too many rooms in Yellowknife "at this particular point in time."

"I'm really hoping that it picks up ... and that everything will be OK," she says. "We have a lot of hotels and now we just need to bring the people."

McNeil says the Yellowknife Inn has survived worse times before. But others are ignoring the surplus, not letting it stop them from investing in more rooms.

Sixty-six rooms were added when the Super 8 motel chain came to town in December. The month before that Chateau Nova opened with 60 rooms.

And now 95 apartments in downtown apartment buildings are being converted to hotel suites.

Fraser Tower is experiencing 50 to 70 per cent occupancy in 23 rooms converted so far, out of 55 due to be changed over.

"Two or three years ago everyone was screaming for more rooms," recalls Mark Medland, a vice-president of Fraser Tower owner MacLab Enterprises of Edmonton.

He predicts the conversion will pay off in the long run, because of Yellowknife's bright outlook.

"There's a hubub about the North. That's the message we're getting here in Edmonton."

Even if he didn't believe in the growth prediction, Medland says the investment still makes sense because of corporate strategy. The company owns 400 Edmonton hotel rooms.

The profitability of one property is not as important as "coverage of a hotel brand," he says.

Landlord Urbco has done the same thing with one of its downtown apartment buildings, having spent the past two years slowly converting all 40 units in the Garden to executive suites. "It's going really, really well," said manager Amanda Gray.

Super 8 motel franchiser Marc Staniloff says he's not worried about the recent flood of new rooms in Yellowknife, because the chain taps a niche that straddles the low and middle ends of the market.