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Hotel Pati managers report operating losses, urge city support and destination marketing
Summary
Perry Hospitality Inc. told the council Hotel Pati remains unprofitable despite local ownership and fundraising; occupancy is about 18–20%, PHI has paid for some repairs to keep rooms available, and PHI and Friends of Hotel Pati urged city-backed destination marketing and possible utility cost relief to reach break-even.
Tom Burkran, president of Perry Hospitality Inc. (PHI), presented an extended update on Hotel Pati's operations and finances, saying the locally run management group has not yet reached profitability. Burkran said PHI operates the hotel under a three‑year lease signed in October 2023, employs about 50 people, and runs two profit centers — lodging and food & beverage — but still runs at a loss.
Burkran told the council PHI's average occupancy rate is “somewhere around 18 to 20%,” which he described as well below industry standards for a full-service boutique hotel; he said an additional roughly 50 room nights per week would move the hotel toward break-even. PHI has increased its marketing expenditures (media placement, targeted digital advertising and on‑the‑ground distribution) and will attend the Trail Summit in Cedar Falls to promote the hotel and the linked High Trestle Trail.
Operational issues and city partnership
Burkran said repair and maintenance backlog and slow city procurement/approval processes have hurt operations. He said the hotel has 40 rooms and that when several rooms are out of service for HVAC or other repairs the lost room‑night opportunity compounds; PHI has in some cases paid privately to expedite repairs rather than wait for the city's procurement timeline. He gave an illustrative calculation of opportunity cost from rooms out of service and said PHI has started hiring its own maintenance staff to reduce downtime.
Friends of Hotel Pati and fundraising support
A representative of Friends of Hotel Pati reported that initial fundraising (phase one) raised about $2.9 million to purchase the hotel and that an additional leaders-club fundraising drive has raised roughly $1 million. Friends said it has provided about $80,000 in operating support over 2024–25 and has funded kitchen equipment and other capital items. The Friends' representative identified Dan Spellelman as president of the organization and said the speaker (who identified as treasurer) and the board are committed to working toward profitability.
Requests to council
PHI and Friends asked the council to help with destination marketing for Perry as a whole and to consider options to reduce utility or energy costs for the hotel (the Friends representative mentioned about $100,000 in electric spend that affects the hotel's path to profitability). Burkran said he will share detailed financials in a private meeting with council members on request but declined to present full public financial statements at the meeting.
Next steps
Council took no formal action on the hotel presentation at the meeting; PHI and Friends urged continued collaboration with the city on destination marketing and operational support to reach break-even by 2026.
