STATE COLLEGE, PA.—The development team of The P Hotel and Spa announced suspension of construction of The P Hotel and Pure Spa project at Waddle Road and Colonnade Boulevard pending stabilization of the economy. The developers had been pursuing LEED Gold for the development here in State College.
“Other components of the Waddle Road development will continue as planned but the owners have decided that we need to put The P on hold pending a better understanding of how the economy is going to unfold,” said Benjamin Heim, CEO of Tricore Group, LLC and lead developer on the project. “We remain committed to The P Hotel and to The Pure Spa and believe that there is a demand for a luxury hotel and destination spa in this area. Unfortunately, the economy has negatively impacted the tourism industry both nationally and here in Happy Valley. We simply cannot go forward with a project of this magnitude without a better sense that the hospitality industry will be thriving when we open the doors—that is not the case now or for the foreseeable future.”
The latest data suggests that the economic downturn of 2008 had a greater impact on tourism than was originally projected. According to recent figures in hospitality research, occupancy rates and hotel revenue per available room across the nation are predicted to continue to decline through 2009. Local figures suggest that the tourism market in the Centre Region, a market that has historically been strong when other areas of the country are below par, is also down despite a PSU Football schedule of eight home games for the 2009 season. Similarly, business travel for meetings and conferences is below projected levels in all markets. Despite strong trends in the number of spa visits per person nationwide, high-end hospitality has been the hardest hit by the economy. According to PKF Hospitality Research, the leading analyst for the hospitality industry, tourism and hospitality spending may begin to rebound late next year.
“The ripple effect created by the current economy has impacted the timeline for this project,” Heim said. “If we were to continue with The P Hotel and opened in a weak economy or fragile hospitality environment, the project could suffer greatly and unnecessarily put our other businesses and employees at those businesses at risk. We strongly believe in the concept and the incredible team who has worked so hard to bring this to Happy Valley. We will continually evaluate The P Hotel in context of our hopefully improving economy to decide when it will be prudent to re-start construction on the hotel component.”
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