SALEM, Ohio (WKBN) – A new hotel in Salem is expected to open this fall, which could be just the start of the city’s economic future.
Holiday Inn employees, along with Salem Mayor John Berlin, took part in a ceremonial groundbreaking Thursday morning for the new 70-room Holiday Inn Express.
The hotel, located on Cunningham Road on the city’s East side, will employ about 25 area residents and would be the only hotel in Salem. It will be the first hotel in Salem in five years.
Berlin said the hotel will benefit the city’s economy.
“We do get a bed tax. A portion of that will go into the general fund. Some of it will go back into economic development,” said Berlin. “In general, it means expansion for the existing businesses who have perhaps not decided to locate in town because of not having accommodation, locally.”
The $4 million project is expected to have its first check-in in October. City officials said an additional hotel developer also is looking at the north side of Salem to build another hotel.
Developers expect significant growth in the area because of the shale industry, with workers in the oil and gas industry needing long-term accommodations.
“As you well know, the Marcellus shale and the Utica, that’s where a lot of your economic development is going to be and obviously we’re doing the same here with us. We’re hoping they fill us regularly,” said Greg Erosenko, vice president of Forza Development, which operates hotels in Ohio, Pennsylvania and West Virginia.
But at least one existing hotel operator thinks the time to make money from that will be limited.
“Brand new hotels, by the time they’re built, that new hotel is going to take a year-and-a-half to build. By the time it is built and open, the shale play might be pretty well wrapped up by then, the actual drilling of it,” said Mike Naffah of Naffah Hospitality Group, which owns the Days Inn near Lisbon.
He said while shale-related workers account for about half his business, those who were here for well drilling a couple years ago already have moved on to other projects and now he is seeing those employed to install gas transmission pipelines. But he believes those workers will leave as well when the pipelines are finished.
He said state officials warned local operators a couple years ago that gambling on oil and gas might be too risky.
“You have to do your due diligence with that. There has to be a lot more available other than just one. You can’t rely just on one area of the business to be able to supply the rooms that you need for a hotel. To keep it full, you’ve got to keep it full,” Naffah said.