A hotel in Harrisburg? Feasibility study indicates it could be next big thing

Lisa Zens, Harrisburg’s economic development director, explains

Photo by Markus Spiske on Unsplash

With a population of 9,515 and a growth rate of 10.5 percent a year, Harrisburg’s bucket list of amenities is starting to become a reality.

A hotel has always been at the top of the list. A feasibility study conducted on behalf of the Harrisburg Economic Development Corporation (HEDC) and released in April found Harrisburg could support a new hotel and re-enforced the idea that building one could be the next big project for the community.

“A feasibility study is less than a business plan and more of a decision-making plan,” explained Lisa Zens, Harrisburg’s Economic Development Director. “This study is to determine the need for a hotel and was a necessary step for Harrisburg as the community continues to grow and offer new services. It helped us find out the likelihood of success so we knew whether we should move forward with the idea. Our feasibility study included target demographics, a market analyses and capital needs along with objective standards for assessing the feasibility. The study was a necessary piece before we could move forward with a funding request and seek out developers and hotels that may be interested.”

Zens organized the study conducted by Core Distinction Group, a third-party hotel development consulting group. Their recommendations included an upper midscale hotel that would have between 60-70 guest rooms. The hotel would create 10-15 full-time jobs. Core Distinction Group projected development costs to be $10,378,539.

It was the kind of report the HEDC had been hoping for. With the study completed, Zens continues to keep the momentum going while engaging with developers, local investors and hotel chains.

“HEDC is excited to continue the work and be progressive in the development of the hotel,” Zens explained. “The insight from the study not only provided data to support strategic planning, but also gives HEDC the green light to start prospecting for hotels to come to the area.”

The U.S. Census Bureau released data in May showing that the Lincoln County city south of Sioux Falls was the fastest growing city in South Dakota between the summer of 2021 and 2022. An addition of 800 residents to the city in that timespan brought the Harrisburg’s population to 8,451 as of July 1, 2022.

With that type of growth, a hotel might seem logical. The city had been a bedroom community to Sioux Falls, but population growth has brought a Fareway Grocery, Ace Hardware and gas stations that are brining increases in the city’s sales tax collections.

Meanwhile, the city has set out this summer to expand roads. While the road closures have generated headaches this summer, the projects, which include a roundabout, are expected to ease traffic in the growing city when they are finished.