The Ramada Inn Conference Center, Columbia’s MI second-largest hotel and among the oldest, has closed and will be torn down after three-year building boom in local hotel market made competition too stiff.

The 190-room hotel closed Sunday, said Bob Habeeb, president of Rosemont, Ill.-based First Hospitality, which manages the property for a group of investors who bought it in 1985. The hotel was built in 1969.

"We have always had good luck in Columbia, though in last five years with all the competition in town, so much new building in town, we have seen business fall off," Habeeb said. "It’s become increasingly competitive and, of course, ours was one of the older buildings in town."

The property, on 12.72 acres at 1100 Vandiver Drive, was listed for sale last year at $5.5 million andThe hotel suffered major hail damage to its roof and air conditioning units in March, Habeeb said, and the owners decided to close rather than repair a building already slated for demolition. "That was the straw that broke the camel’s back," he said.

The hotel received an settlement, Habeeb said, but the insurers were hesitant to reinvest in the aging building. "What good is having one section that is brand new with others leaking?" he said.

Habeeb said the group has decided to build a new hotel on a smaller portion of the lot and sell or lease the rest of the acreage to entertainment-oriented businesses that he hopes will attract patrons to the new hotel.

Lorah Steiner, executive director of the Columbia Convention and Visitor’s Bureau, said Ramada Inn’s closing is the first in a market shakeout and didn’t come as much of a surprise.

"It may not be the only one that closes or changes its franchise name in the next few years," she said.

Columbia’s hotel market experiences an average of 56 percent occupancy with room rates averaging $66 to $67, she said.

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