Hotels Working Group

In 2021, Penn State engaged Rieth Jones Advisors (RJA) to begin exploring options for The Penn Stater Hotel and Conference Center and Nittany Lion Inn, including keeping and renovating the properties; divesting and ground leasing them; or variations on these options. An extensive analysis indicated there is strategic value in divesting from hotel operations at University Park. On June 29, 2022, the Penn State Board of Trustees approved for the University to enter into a purchasing agreement and ground lease for The Nittany Lion Inn and Penn Stater with a third-party company, Scholar Hotel Group. This decision follows an extensive process that began in 2021 to examine hotel operations at University Park and whether the hotels align with our core mission of education, research and service. 

Executive Sponsor: Sara Thorndike, Senior Vice President for Finance and Business/Treasurer

1. Why did Penn State conduct an analysis of its hotel operations?  
   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, including 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. After the in-depth evaluation to examine hotel operations, Penn State has made the determination that divesting from the hotel operation business will enable us to focus more intently on our tri-part mission. This decision will enable investments that will support the continuous modernization needed for the hotels to remain viable; attract guests and conferences; and meet guest expectations, industry standards and competition in the local hospitality market while also continuing to support educational opportunities through Penn State’s School of Hospitality Management. 
    
2. Why is Penn State moving forward with this agreement and does it mean the University is going to sell its hotels?
   The Penn State Board of Trustees approved for the University to enter into a purchasing agreement and ground lease for The Nittany Lion Inn and Penn Stater Hotel and Conference Center with a third-party company, Scholar Hotel Group. After an in-depth evaluation, the University is pleased that the board has concurred with moving forward with this new partnership as it will allow Penn State to focus more intently on its core teaching, research and outreach tri-part mission. Though this effort is still in a preliminary phase, the agreement, when signed, will keep these hotels and their services viable for our entire community while still maintaining a partnership for educational opportunities with Penn State’s School of Hospitality Management. 
    
3. What is the timeline and next steps of this process?
   Following a planning period this summer to negotiate terms, the University anticipates the purchasing agreement will be finalized this fall. While specific plans between Penn State and Scholar Hotel Group are still being defined, the University’s goal is to support our community in every way possible through this upcoming transition. We will continue to keep community members and employees up to date as information becomes available.  
    
4. Why did the University choose this group?  
   The selection of the Scholar Hotel Group was done with the utmost diligence, keeping our community top of mind. Following thorough RFQ and RFP processes, Penn State carefully selected Scholar Hotel Group for this critical partnership and is pleased to move forward with this group. Scholar Hotel Group, which was founded and is owned by a proud Penn State alumnus, operates two other local hotels in the State College area.   
    
5. How will hotel employees be impacted?  
   While we are in the preliminary stages of this process, the University’s goal is to support our community in every way possible through this upcoming transition. While specific plans between Penn State and Scholar Hotel Group are not yet finalized, there will be a variety of employment opportunities for current hotel employees with the new operator or in other areas at Penn State.  
    
6. Will educational hospitality opportunities that take place at the hotel(s) continue for students? 
   Specific plans are being worked through and the University anticipates that on-site educational opportunities for students will continue through a partnership with the School of Hospitality and Scholar Hotel Group. Penn State will continue to provide updates to the community.  
    
7. Will the Penn Stater Hotel and Conference Center and/or Nittany Lion Inn remain hotels?
   Though this effort is still in a preliminary phase and specific details are being determined, the agreement, when signed, will keep these hotels and their services viable for our entire University community and beyond. The Penn Stater will remain open, and the University anticipates The Nittany Lion Inn will remain closed until 2024. As specific plans are finalized, the University will continue to provide updates throughout the summer. 

• Penn State reviews plan for University’s on-campus hotels (June 2022)
• Working group examining hotel operations, strategic operations (October 2021)