A customer checks into the Best Western for a place to stay. The New Ulm EDA approved a hotel feasibility study to see if the city could support another hotel.

NEW ULM — The EDA elected to approve a hotel feasibility study with a budget not to exceed $9,575 at their meeting Tuesday.

The offer came from Grey Hospitality LLC. Two other offers were fielded, but not chosen as they were more expensive and landed above the $10,000 proposed budget for this project.

Economic Development Director Heather Bregel said the project went out for bids after it was identified as a potential EDA priority during a work session in January.

“The last one was done in 2017 and was not completed,” she said. “It was felt early on we could not support another hotel. A lot of things have changed. We’ve been through COVID. There are a lot more traveling doctors, nurses, people like that, who are stay in town during the week. I think it’s a good idea to revisit that and conduct a new study.”

Board member Les Schultz said he remembered the study proposed in 2017 cost around $12,000. He said he strongly supported seeing a hotel feasibility study through.

“We had a hotel that was very interested in building here at the time,” he said. “Had already done their research and said ‘All we need is a hotel study to say yes, we’ll build.’ Then there was a controversy over the components of that study and it was shut down about halfway through so we never got to finish it.”

City Manager Chris Dalton said several factors go into a feasibility study.

“They look for traffic numbers,” he said. “They look at hotels currently in town, number of events, attractions, things like that. They want to see if they build a hotel those rooms are gonna [be filled].”

In addition to the traveling workforce identified by Bregel, Dalton said they are looking to capture more of the youth sports tournament crowd as well.

“We’re looking at hosting more baseball tournaments, basketball tournaments, hockey tournaments, those events which are draws,” he said. “We know people can’t always stay in New Ulm. They have to go to Sleepy Eye or Mankato and then drive in so an additional hotel would help alleviate some of that.”

Dalton said another indicator of New Ulm’s capacity for another hotel is the city’s Airbnbs, which are booked year-round.

Schultz made the motion to approve funding for the hotel feasibility study, which Board member Michelle Markgraf seconded.