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Ten Considerations When Developing an On-Campus University or College Hotel Presented by: Alan Suzuki

Presented by Alan Suzuki

Universities and colleges can often be one the largest generators of hotel demand in its market area. From prospective students visiting the campus to visiting professors, performing artists, and vendors, universities and colleges may generate thousands of roomnights a year. In an effort to offer convenient lodging on campus, many universities and colleges are approaching hotel developers to gauge their potential interest, and developers are listening carefully. However, while some universities and colleges may attract enough visitors to support a hotel of its own, many factors need to be considered before an investment decision can be made. We offer ten factors that should be considered in order to determine the success of a hotel on a university or college campus.

1. The Size of the School – Universities and colleges may range in size from a couple thousand students to tens of thousands of students. A larger school may attract more visitors (that need lodging) than a smaller school for a variety of reasons. A larger school may have:

  • more prospective students touring and interviewing at the school.
  • more friends and family visiting current students at the school.
  • a larger workforce of professors and administrators resulting in a higher likelihood of prospective hires visiting the campus for interviews.
  • a larger number of courses resulting in more visiting professors and special guests.
  • a higher likelihood of performing arts groups traveling to the school for a performance.
  • a higher likelihood of vendors selling their products and consultants completing projects on campus.


2. The Commuter School versus the Non-Commuter School – A commuter school will have a high percentage of its student body living within driving distance of the campus. Furthermore, it is more likely that graduates of a commuter school will continue to live in the general region. As such, a non-commuter school may attract additional visitors given that there is a higher likelihood of friends and family visiting current students as well as a higher percentage of students needing accommodations during matriculation, parent’s weekend, and graduation. Furthermore, a non-commuter school will typically have alumni needing accommodations while returning to campus for homecoming and reunion weekends.

3. Academic Reputation – A strong academic reputation may attract applications from across the country and internationally, and may attract a greater number of prospective students visiting and interviewing at the school. Furthermore, a school with a strong academic reputation may attract a number of recruiters from across the country to market to graduating seniors and to interview prospective hires.

4. Strength and Size of Athletic Program – A university or college’s strong athletic reputation, particularly in sports such as football, basketball, hockey, and baseball, may attract a strong following of fans that are willing to travel from outside of the region to attend games. Furthermore, a hotel located on campus may be an ideal option for opposing teams that may travel from outside of the region to play a game. As such, the larger and more diverse the university or college’s athletic program, the greater the need is for lodging for these visiting teams.

5. Accessibility – Many universities and colleges are in excellent locations to hold academic association and society meetings. However, as attendees typically need to travel from across the country or the world to attend these meetings, there is a higher likelihood of these association and society meetings to take place at a university or college that is in close proximity to a major airport or easily accessible by highway from a major population base. Along the same lines, many universities and colleges hold seminars and continuing education courses. The attendance of these seminars from visitors outside of the region may be dictated by the accessibility of the campus.

6. Strength and Size of Continuing Education – As mentioned above, many universities and colleges offer certification courses and seminars. The strength and academic reputation of the school’s continuing education program may dictate the attendance of these classes from students from outside of the region. Furthermore, the size of the school’s continuing education program should also be considered. Universities and colleges that offer a wide range of courses as well as courses that are offered throughout the year will likely accommodate a greater number of students, which in turn will increase the likelihood that these students will need short-term lodging.

7. Existence of Other Local Demand Generators – A university or college will only generate a finite number of room nights, which may or may not warrant the development of a hotel. Therefore, the existence of other sources of demand from the local market area, particularly to fill rooms when school is not in session, will only help to increase the feasibility and reduce the risk of the development project.

8. Location of Site – The location of the available site for hotel development is important in determining the hotel’s likelihood of accommodating non-university/college demand. A hotel’s location tucked back within the university or college with poor accessibility and visibility may reduce its attractiveness to non-university/college related visitors. On the other hand, should the site be a desirable location along a major access road or proximate to amenities such as restaurants and retail, the hotel will have a higher likelihood of attracting a wide range of visitors.

9. Brand – A brand may be an important consideration if the hotel needs to attract demand from non-university/college sources in order for the development to be feasible. A strong nationally recognized brand will be able to attract demand from a larger market area. On the other hand, the drawbacks of a brand will be the increased expense associated with franchise and marketing fees. Furthermore, a brand may limit the hotel’s flexibility in its exterior and interior design features. Many universities and colleges typically prefer a hotel that will blend in with its other academic buildings.

10. Existing Supply and New Developments – Similar to the due diligence that is completed when considering the development of any hotel, the number of existing hotels as well as any hotels that are under consideration or under construction needs to be completely understood. Depending on the location of the university or college, it cannot be assumed that a hotel that is on campus will capture all of its demand. The greater the number of existing and new hotel supply, the higher the likelihood that a discriminate traveler will seek alternative options, despite the on-campus university or college’s convenient location.