Chateau Mizzou? University of Missouri-Columbia Turns To Renting Out Vacant Dorm Rooms

We have previously discussed the meltdown at the University of Missouri-Columbia where applications have plummeted since the controversial responses to race protests on campus, including the decision to terminate a journalism professor who encouraged students to “muscle” a student journalist. The result has been the shutting down of whole dormitories. Now the university has hit upon a new idea to raise revenue. It has effectively become a hotel and has been renting out rooms in vacant dormitories for $120 a night for football games.

The university has reportedly raised about $20,000 per game which remains significantly less than the millions lost in the aftermath of the protests.

The university alienated many applicants in its response to the protests with many viewing the university as too accommodating to demands for policy changes while others objecting to the termination of the professor.

The venture into the hotel business raises some interesting issues. With one third of the renters coming from out of state, the university is engaged in interstate commerce as a lodger. The university is a tax-free institution competing with local hotels while not satisfying permitting, licensing, and other requirements demands of commercial lodging businesses. Moreover, there is the question of how the insurance policies operate with the change from dormitory housing to short-term hotel rentals. This new enterprise means different people spending nights at the university with little information on their background or other criteria. Finally, the tax-exempt status is based on the fact that the university is not a profit-making institution. It is not clear how the university pays the taxes on such revenue producing businesses. Obviously, the football program and other enterprises like the campus shops do produce revenue but there remains the question of using the facility for profit rentals. It is hard to believe that $120 a night is simply the costs of operation when the room comes with some bars of soap, towels, and bare bones accommodations. Nevertheless, Chateau Mizzou is booked for the entire season and this is a promising way of increasing ties to alumni. It will not make up the loss of $5 million but $120 a night is not a bad return on an otherwise closed dormitory.

Of course one way to circumvent the pesky legal questions would be to tie the operation of these dorms to the hotel management degree as a clinic like experience. Alumni then fulfill the same function as farm animals kept for the husbandry programs . . . except this livestock pays by the night.