End of the line or new beginning?
©
On Saturday some friends of ours took the train from St. Stephen to McAdam to see the restored train station—and loved it. Since I haven’t made the trip, I decided to check it out online.
The McAdam Railway Station is one of the three crown jewels of railway history in this area. The other two are Ministers Island and the Algonquin Hotel, and all three were built under the direction of the great railway czar, Sir William Van Horne. Today all three face an uncertain future.
By the time you read this we’ll have a new government in place. One of its first tasks is addressing the future of the provincially owned Algonquin Hotel—as the operating lease with Fairmont Hotels comes to an end in the next few months. The question is, will the Fairmont renew the lease? And does the province actually want them to?
As it stands the Province of New Brunswick takes a share of the profits of the hotel. But it absorbs the full impact of any losses. That translates into a risk-free deal for the Fairmont. It’s no surprise that the hotel—and the similarly managed golf course—have been losing money, with an accrued public loss of tens of millions of dollars. Faced with a growing provincial debt, there’s a real incentive to solve the Algonquin problem.
There’s another side to the problem. Since the province is the owner of the property, it’s the province’s responsibility to keep it up. That means constant renovating. Again, it’s no surprise to learn that this hasn’t been happening. Despite the efforts of hotel management, the hotel is tired. The last major renovations took place in the late 1980s with the addition of the new wing and conference facilities. Many of the 234 rooms are not air conditioned, and a large section is closed in the winter. Any business case would show that the hotel is currently unsustainable.
But there’s also a counter-intuitive logic behind this losing proposition. The hotel is the mainstay of the area’s tourism. There is no hotel of its size between Bangor and Saint John, and it directly and indirectly contributes millions of dollars a year to the local economy. The cash that the government “loses” in the Algonquin every year could be compared to the money it “loses” on other attractions in the province, such as the $1.3 million it spends on King’s Landing, or the $1.5 million it spends on the Acadian Village.
So, what should the next government do if the Fairmont doesn’t renew its lease? Should it simply look for a new tenant? It could. That’s the current model in the hotel industry. Most brand-name hotel chains no longer own their own properties. Developers do; the operators simply lease the properties.
If the government chooses that option, it would need to invest between $15 million to $25 million in updating the property. It would also have to commit to investing in regular upgrades, more than it’s done in the past. Given the province’s finances, this scenario may be unlikely.
The easy option is to put the hotel up for sale.
But is there a third option? I think so.
No one can make a good business case for an old railway hotel without having a large major attraction—such as a national park—located nearby to draw a big audience. There are numerous examples. Fairmont Banff Springs Hotel has Banff. The Stanley Hotel in Colorado has the Rocky Mountain National Park and Awhawnee Hotel in California has Yosemite. All three of these parks draw over a million people a year to their respective areas—providing a strong customer-base for the hotels.
So how would we create such an attraction here? Perhaps it’s a master plan to create the Fundy Bay National Marine Park & Railway. Its land-based headquarters would be set on Ministers Island, to be developed as a eco-sustainability interpretive site. The marine-rail park would be the end point of a new railway development relinking St. Andrews to Montreal, including the McAdam station and other points of interest. The goal would be attracting 500,000+ new visitors a year by road and rail to New Brunswick.
The set-piece of the new marine-rail park would be a freshly restored, “greened” and upscaled Algonquin Hotel. The number of hotel rooms should be nearly cut in half, to no more than 150 rooms. The “new” wing of the hotel could be redeveloped and sold as condo units. Another portion of the hotel could be turned into a private clinic for international medicine, such as plastic surgery, allowing patients to recover in the relative privacy of St. Andrews.
It’s a tall order. The total investment might go as high as $200 million. The 250 km. of NB rail alone would cost about $75 million. But we’re talking about a 100-year investment and planning for a post-fossil fuel world. The investment is a mere $2 million a year to create “the eco-adventure of a lifetime.”
The real work, of course, is not funding it or building it. It’s learning to think at on an entirely new scale. As Van Horne might have done when he was building the first 100-year railway.
On Saturday some friends of ours took the train from St. Stephen to McAdam to see the restored train station—and loved it. Since I haven’t made the trip, I decided to check it out online.
The McAdam Railway Station is one of the three crown jewels of railway history in this area. The other two are Ministers Island and the Algonquin Hotel, and all three were built under the direction of the great railway czar, Sir William Van Horne. Today all three face an uncertain future.By the time you read this we’ll have a new government in place. One of its first tasks is addressing the future of the provincially owned Algonquin Hotel—as the operating lease with Fairmont Hotels comes to an end in the next few months. The question is, will the Fairmont renew the lease? And does the province actually want them to?
As it stands the Province of New Brunswick takes a share of the profits of the hotel. But it absorbs the full impact of any losses. That translates into a risk-free deal for the Fairmont. It’s no surprise that the hotel—and the similarly managed golf course—have been losing money, with an accrued public loss of tens of millions of dollars. Faced with a growing provincial debt, there’s a real incentive to solve the Algonquin problem.
There’s another side to the problem. Since the province is the owner of the property, it’s the province’s responsibility to keep it up. That means constant renovating. Again, it’s no surprise to learn that this hasn’t been happening. Despite the efforts of hotel management, the hotel is tired. The last major renovations took place in the late 1980s with the addition of the new wing and conference facilities. Many of the 234 rooms are not air conditioned, and a large section is closed in the winter. Any business case would show that the hotel is currently unsustainable.But there’s also a counter-intuitive logic behind this losing proposition. The hotel is the mainstay of the area’s tourism. There is no hotel of its size between Bangor and Saint John, and it directly and indirectly contributes millions of dollars a year to the local economy. The cash that the government “loses” in the Algonquin every year could be compared to the money it “loses” on other attractions in the province, such as the $1.3 million it spends on King’s Landing, or the $1.5 million it spends on the Acadian Village.
So, what should the next government do if the Fairmont doesn’t renew its lease? Should it simply look for a new tenant? It could. That’s the current model in the hotel industry. Most brand-name hotel chains no longer own their own properties. Developers do; the operators simply lease the properties.
If the government chooses that option, it would need to invest between $15 million to $25 million in updating the property. It would also have to commit to investing in regular upgrades, more than it’s done in the past. Given the province’s finances, this scenario may be unlikely.
The easy option is to put the hotel up for sale.
But is there a third option? I think so.
No one can make a good business case for an old railway hotel without having a large major attraction—such as a national park—located nearby to draw a big audience. There are numerous examples. Fairmont Banff Springs Hotel has Banff. The Stanley Hotel in Colorado has the Rocky Mountain National Park and Awhawnee Hotel in California has Yosemite. All three of these parks draw over a million people a year to their respective areas—providing a strong customer-base for the hotels.
So how would we create such an attraction here? Perhaps it’s a master plan to create the Fundy Bay National Marine Park & Railway. Its land-based headquarters would be set on Ministers Island, to be developed as a eco-sustainability interpretive site. The marine-rail park would be the end point of a new railway development relinking St. Andrews to Montreal, including the McAdam station and other points of interest. The goal would be attracting 500,000+ new visitors a year by road and rail to New Brunswick.The set-piece of the new marine-rail park would be a freshly restored, “greened” and upscaled Algonquin Hotel. The number of hotel rooms should be nearly cut in half, to no more than 150 rooms. The “new” wing of the hotel could be redeveloped and sold as condo units. Another portion of the hotel could be turned into a private clinic for international medicine, such as plastic surgery, allowing patients to recover in the relative privacy of St. Andrews.
It’s a tall order. The total investment might go as high as $200 million. The 250 km. of NB rail alone would cost about $75 million. But we’re talking about a 100-year investment and planning for a post-fossil fuel world. The investment is a mere $2 million a year to create “the eco-adventure of a lifetime.”
The real work, of course, is not funding it or building it. It’s learning to think at on an entirely new scale. As Van Horne might have done when he was building the first 100-year railway.
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