IMO you have it reversed.
More hotel rooms don't attract more tourists/visitors. Rather, more tourists/visitors attract more hotel rooms.
Reopening this hotel probably just hurts existing hotels, which have fairly low occupancy.
You're not reading the full explanation. There are fewer rooms now in Dearborn than there were after this place opened. There is a market for this kind of place as it is just slightly under what you would have for the Henry or the Dearborn Inn. IF there wasn't, it would not make sense to keep it open as the operating costs for a single property of this size has to be huge.
It also has amenities that those places do not have so it makes a good place for a certain type of traveller. The smaller hotels have become budget hotels and I don't know about you but a shun away from staying at places like the Victory Inn or Ramada as you never know what you're going to get.
As touched on, there is the convention dynamic, especially for state-wide or regional conventions [[especially with Ohio, Ontario, and Indiana attendees).
An organization I belong to is still planning to have next spring's convention at the "Dearborn Hyatt." They have three major meetings a year. One is in Lansing, One is in an up-north resort, and one alternates between Metro Detroit and Kalamazoo. There is no way they would do an event without free parking. Also, as stated by others, there is little desire from the out-state members to do an event inside the city.
As of next year, for the first time, the up-north event will be on the grounds of a casino [[I was told that this resistance was why Grand Traverse does not have a casino on the grounds, but runs a shuttle bus to the casino they own 4 miles away). Thus, Motor City or Greektown might eventually be the competition for an event of 400-800 attendees over the Dearborn Hyatt, depending on the room rate. For a "resort" some rooms need to be in low $100's per night to get this crowd........IJS that there is a market for affordable convention hotels for such things as kid's hockey, regional exhibitions and such....The Dearborn Hyatt has these events every day. They are not that upscale, but do need a bunch of rooms and exhibit rooms in the same place.
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