Hotels Working Group

Link to Hotels Press Release

 

HOTELS WORKING GROUP

In May 2021, Penn State engaged the Rieth Jones Advisors (RJA) to begin exploring options regarding the Penn Stater Hotel and The Nittany Lion Inn, including keeping and renovating the properties; divesting and ground leasing them; or variations on these options. The examination of the two hotels is taking into account ongoing operational costs — including a sizable and costly maintenance backlog — the need for renovations to continuously meet guest expectations and industry standards, along with growth and intense competition in the local and regional hotel market. The working group and RJA are expected to make their final recommendations by mid-2022. 

Executive Sponsor: Sara Thorndike, Senior Vice President for Finance and Business/Treasurer
Chair: John Papazoglou, Associate Vice President for Auxiliary and Business Services

 

Frequently Asked Questions

  1. Why is Penn State conducting this analysis of its two hotels?
    As part of an overall evaluation of operations that began in earnest in 2018, this working group was tasked with examining categories of Penn State’s physical assets. No decisions have been made and the group is exploring potential cost-saving and revenue-driving initiatives related to hotel operations at University Park. The Nittany Lion Inn and The Penn Stater Hotel and Conference Center were identified as two resources where potential operational efficiencies might be realized and how these resources do or do not align with Penn State’s core functions of teaching, research and public outreach. 
     
  1. What is the timeline for this process? 
    This exploration process will continue over the coming months with an expected goal to make final recommendations by early 2022.
     
  2. How will this exploration process work? 
    This exploration process of hotel operations will continue over the coming months with an expected goal to make final recommendations by early 2022. No decisions have yet been made. Completing this exercise does not mean the University has determined to change hotel operations or move forward with a specific option.  The University’s goal is to make a decision that will benefit our community in the long-term and that aligns with our priority to keep a quality education affordable and accessible for students and to keep a Penn State education in reach of qualified students.  
     
  3. How will this process potentially impact hotel employees? 
    At this time, this is an exploratory exercise to determine how best the University could increase efficiencies while becoming more focused on its mission, and no decisions have been made.
     
  4. What challenges are impacting Penn State and these decisions? 
    Penn State, like all of U.S. higher education, is facing a period of disruptive change that includes demographic shifts, decreasing high school graduates, higher operating expenses, and reduced federal and state funding. These external pressures are requiring educational institutions across the country – including Penn State -- to explore more potential efficiencies while continuing to provide a high-quality education for students. In addition, the existence of COVID-19 and the necessary steps taken to maintain the health and safety of our community during this time has resulted in millions of dollars in unexpected costs, as well as lost revenue. 
     
  5. How has COVID-19 impacted the two hotel properties? 
    Income to the hotel properties has been substantially diminished. In addition, current economic conditions have resulted in differing views on the future of hospitality, which is the reason for the exploratory work. 

 

Communications

  • Working group examining hotel operations, strategic operations (October 2021) - Read More