PIERRE, S.D. (AP) - A recently formed California company is buying up hotels and motels across South Dakota.
AG Dakota has acquired 17 properties in South Dakota so far this year, including the Fort Pierre Motel, the Capital Journal reported . The group plans to invest $50 million over the next decade.
AG Dakota has already spent around $15 million, said David Hooper, the company’s senior director of operations.
“We’re not trying to take over all the hotels and motels in a place and then spike prices; we’re absolutely not trying to do that,” he said. The company aims to invest in “towns, cultures, and experiences,” he said.
South Dakota’s lack of state income tax makes the area business-friendly, Hooper said. The state has a culture of tourism built into it, he said.
The hospitality industry can make money in rural America’s small towns, and the company’s business can help the economy of those towns, Hooper said.
Some of AG Dakota’s newly acquired properties are located in towns such as Ipswich and Murdo, with populations estimated by the U.S. Census Bureau to have shrunk since 2010.
Hooper said he debated temporarily closing the Hospitality Hotel in Ipswich after purchasing it because the hotel only had a manager on staff. But residents raised concerns about the economic impact of a closure because local contractors stay at the hotel for weeks at a time. The concerns led to Hooper keeping the hotel open during the transition to a new management team and staff.
The company will keep the current names of the purchased properties, Hooper said. The buildings will eventually get updated signage with a tagline indicating the new ownership.
The company’s hotels and motels will eventually be operated off the same property management and payroll software system, Hooper said. The properties are currently listed under online travel agencies.
AG Dakota also has one hotel in North Dakota and one in Minnesota.
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Information from: Pierre Capital Journal, http://www.capjournal.com
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