Jamestown, North Dakota
August 11, 2021
When I checked in yesterday (yes, another hotel — hard to turn down an all-in $82), he volunteered he had bought the hotel in an auction. He was living in Hawaii and put in an “really low bid” and one. He said the market is overbuilt and that he’s having to put money into the hotel to keep the Comfort Inn name.
Hmm. Good money after bad? An overbuilt hotel situation in Jamestown, North Dakota doesn’t go away quickly. Especially when some of the other hotels are part of national brands Marriott, Holiday Inn, Hampton Inn).
Asked about the weather. He said winter lasts nine months. They get snow but the issue is the cold and the wind. It was -40 degrees for a week last winter. North Dakota is a Valley in the middle of the state and the winds from Canada just roar through.
And in the summer it is dry and hot.
Hardy souls that live here.
A significant economic lesson in this story which most people learn early in life. When investing money, due diligence is critical. When buying a business you must understand the market in which you are playing and the competition. Looks like bought on price, looking for the deal. If you have a business that has no customers, and tough well financed competitors, the value of the business is $0.