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In wake of oil drop, Oil Patch hotel owners look for tourism to fill rooms

GLENDIVE, Mont. -- For decades, the Riverside Inn on the northern edge of this Badlands town has survived on regular truck drivers, business travelers and drivers passing through Eastern Montana.

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A billboard along I-94 at Hathaway welcomes visitors to Glendive. Saturday, October 31, 2015.

GLENDIVE, Mont. - For decades, the Riverside Inn on the northern edge of this Badlands town has survived on regular truck drivers, business travelers and drivers passing through Eastern Montana.

The no-frills, 37-room hotel is the right off the Interstate 94 exit at state Highway 16, an easy connection north to Sidney and the Bakken oilfields in North Dakota. It sits on one level near the Yellowstone River with a big parking lot, an ideal stop-off with clean rooms.

But the Riverside, like many hotels and motels near the Bakken oilfields, is struggling. Rooms sit vacant, and two longtime employees - a maintenance man and a maid - were laid off this summer, and manager Kathleen Rowell has taken on more work with a smaller staff.

“The desk clerk became a jack of all trades, answering phones, doing maintenance,” Rowell said.

“It’s either downsize, or go broke.”

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For about a half decade, the Bakken oil boom gave to Glendive’s lodging industry. Now it’s taking away, and residents here are trying to attract more visitors.

With oil prices under $50 a barrel, drillers are halting operations because they can’t make a profit. This means fewer workers coming to the North Dakota oil fields, less construction development and fewer executives flying in for a few days to see the operations.

In Glendive, occupancy is down in hotels citywide (30 to 40 percent at some places), even as the number of new rooms has soared in the last five years. Some hoteliers worry that not all the properties will survive, and state lodging tax revenue fell for the first time this year.

From April through June, the state collected $39,850 in bed taxes from hotels in Glendive, about half the amount from the same period in 2014. It was the first year-over-year decline in a decade for a fund that supports tourism promotion for the area.

The state collected $324,975 in 4 percent lodging taxes from Glendive in 2014, which netted the local convention and visitors bureau about $20,000.

This year, that number will assuredly be down, but local officials say they’re optimistic the downturn won’t last. Efforts to highlight Montana’s eastern gateway will entice more tourists to stay in beds, hotel administrators say.

“I just think that marketing is huge. There’s business to be (gotten). It’s just getting out there and getting it,” said Billie Jo Searer, manager of the Holiday Inn Express on exit 215, Glendive’s eastern-most exit and the center of the hotel building boom.

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Embracing what they have

Glendive now has 587 hotel rooms citywide, a 66 percent increase over five years ago, according to the county's Tourism Business Improvement District.

Most of the growth is at the city’s northeast end at Interstate 94 exit 215, where four new hotels, including the Holiday Inn Express, have opened. Other newer hotels are the Oak Tree Inn, the Astoria Hotel and Suites and the La Quinta Inn and Suites.

Tourism officials in Dawson County are talking up the area’s marketable assets, including the gorgeous views and hikes of nearby Makoshika State Park and the dinosaur museum in town.

Last month, the area’s convention and visitor’s bureau spent $800 to hang a banner at Billings Logan International Airport, highlighting a revamped website, www.visitglendive.com , and the area’s outdoor rustic charm.

This month, the group is planning to replace a dated billboard rented from the Glendive Chamber of Commerce at I-94 exit 117 at Hathaway, about 100 miles west of Dawson County. The $7,000 project will highlight the volume of hotel rooms in Glendive -- more than 500 -- and outdoor recreational opportunities, tourism officials say.

“We want people to come out here. We’re not trying to be something that we’re not. We’re trying to embrace what we have,” said Cathy Kirkpatrick of the Dawson County Economic Development Council, which oversees the visitors bureau and tourism district.

Non-resident spending brought $45.28 million into Dawson County’s economy in 2014, according to the University of Montana’s Institute for Tourism and Research. Hotel and motel spending totalled $3.2 million there last year, according to a UM study.

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“We are the welcoming community to the Montana state parks. And we want to do a good job showing off the parks,” Kirkpatrick said.

In her office Monday at Dawson Community College, Kirkpatrick proudly showed off a front-page headline from the local Ranger Review declaring Makoshika a top-ranking park for Montana. The designation came from the Montana State Parks Administration, which recently ranked parks according to need for investment and improvement, according to the paper.

This isn’t news to Nathan Powell, Makoshika park manager, who said the 11,500-acre space needs about $1.3 million to extend city water to camping facilities and improve roads. Efforts to obtain part of this money, about $300,000, during this year’s legislative session failed.

Powell said the park had 77,612 visitors in 2014, and it’s on track for a modest increase this year. He attributes the bump to increased visibility for the park and an unsung benefit of the oil boom: more places to stay.

“Our overnight visits are up, and our (total) visits are up. I’m assuming it’s because they’re able to get a hotel room,” Powell said.

Other citizens are mounting grassroots efforts to boost the visibility of Glendive and bring visitors, Kirkpatrick said. Kelly Wicks, a former Makoshika tour guide, has started a Facebook page , Glendive Outside, to advertise area events and the outdoor life.

Another group, Building Active Glendive, promotes trails in and around Glendive for hikers and bikers.

“The more you see, the more you ... know you need to spend more time here,” said Peggy Iba, a member of the group.

Glendive Mayor Jerry Jimison said that Glendive hosted an all-class reunion this summer attended by more than 600 people - an event that would have been nearly impossible to pull off without the addition of new hotels.

“I am so happy to see the four new hotels built in town because Glendive was long overdue for new lodging,” Jimison said.

The new hotels helped make up for the loss of the Jordan Inn downtown, which closed in 2013.

Expansions in other Glendive hotels haven’t quit, despite the downturn.

The Oak Tree Inn on North Merrill Street is adding 24 new extended-stay rooms. The hotel opened about a year ago and also operates Penny’s Diner, a 24-hour eatery in the classic 1950s style.

Along with the drop in oil, Glendive took another hit to its economy this summer when Burlington Northern Santa Fe announced it was moving 10 jobs out of town and consolidating them into its Laurel rail yard, largely because of declining oil and coal shipments.

Nevertheless, the overall economy remains strong. The unemployment rate in Dawson County remains among the top third statewide, clocking in at just under 3 percent in September, according to the Montana Department of Labor and Industries.

‘Good, but not as good’

Ann Hoff, general manager of the 16-year-old Comfort Inn near exit 215, said business is down about 30 percent compared to the same time last year.

To compete, she said she’s cut prices about 27 percent to $80 per night, down from $109 at this time last year. Most hotels in town have done the same, she said.

The 48-room Comfort Inn has an established core of business travelers who come through town regardless of the price of oil, she said. The newer hotels have been a great addition for Glendive, Hoff said, but she worries they’ll struggle to find guests during the current downturn.

“I’m thinking the newer ones are really going to have to sell, sell, sell to make ends meet,” Hoff said.

At the Holiday Inn Express, business is down 30 percent, and business trips have tended to be shorter, managers say.

Those who do stay can enjoy the newest amenities, including a wireless business center, and outdoor area for pets and a pool and hot tub. There’s even metal seats outside the pool and hot tub, designed to help the elderly and disabled get in the water.

“Business is still good, just not as good,” said Tessa Konieczka, the hotel’s guest services manager.

A few blocks away, the Yellowstone River Inn is relying on a base of hunters, anglers and outdoors enthusiasts during this slow time, manager Kathie Parent said.

The 35-room hotel has three banquet halls, a restaurant, and a bustling lounge at exit 215. Parent said Yellowstone River has lowered its rates $10 to $55 a night recently with rooms half empty, compared to near full occupancy last year.

To bring more people to town to stay in hotels, does Dawson County need to boost its tourism promotion efforts?

“I think so. On a side note, I think they’re doing a very good job with the state park (and) museums,” Parent said.

Hoff at the Comfort Inn said promoters could better leverage Dawson County High School’s new football field and track complex to attract regional games and meets.

The $2 million Oakland Athletic Complex at Perham Field has all-weather turf and a giant scoreboard with replays. It opened last fall and was donated by the Oakland family, local farmers who started the state’s first landfill for energy waste from the Bakken.

The school hosted the Eastern A track meet in the spring, bringing hundreds to town, and Hoff said she’d like to see more.

“We have a really nice football field. It would be nice if they would utilize it” more, she said.

Across town at the Riverside Inn, manager Kathleen Rowell also appreciates efforts to boost tourism.

A single mother from Washington state with four kids at home, Rowell moved to Montana two summers ago to find work, and she’s glad she ended up in Glendive.

She said she enjoys marketing the Riverside and takes pride in positive reviews online at TripAdvisor. Riverside has nearly completed renovations to all its rooms, with four left.

If times remain tough, Rowell said she’s willing to take a pay cut and move into the hotel to reduce costs. Her sons also work there.

Thank goodness for regulars, she said, adding that Riverside needs more of them.

“It seems anymore that all we have are our regulars.”

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