Hotels

New Hotel Proposed in Savannah, Existing Hotels Concerned About Loss of Business

A new 500-room convention center hotel has been proposed for Hutchinson Island in Savannah, Georgia. If built, the hotel would aim to attract large conventions and meetings to the city. However, existing hotels in the area are worried about the impact on their business.

Mark Spadoni, general manager of the nearby 400-room Westin Savannah Harbor Golf Resort & Spa, estimates that area hotels could lose $11 million in revenue the first year the new hotel opens. He calls this a conservative estimate and says the losses would be “significant” for local hotels.

Spadoni, who has managed the Westin for 10 years, spoke at a recent meeting of the authority that oversees the Savannah International Trade and Convention Center. It was the first time he publicly addressed the proposed hotel.

“We’re in a very fragile industry now that’s reeling from one of the most difficult times in the last 40 years,” Spadoni said, referring to the pandemic’s impact on travel and hospitality. He argues that increasing meeting space by over one-third with government-backed financing would hurt existing hotels that were built without such support.

Currently, Savannah has around 1,400 group and meeting rooms. The new hotel would add 500 more.

Spadoni describes the Westin as a “group and convention hotel in a resort location.” He says over 70% of their 100,000 annual room nights are occupied by group and convention attendees. The Westin’s main competitors are other Savannah hotels catering to this market like the Hyatt, Marriott, and Hilton.

While new convention space may attract new larger events, Spadoni argues the Westin and other area hotels will likely see declines, at least initially. He hopes local officials will consider the potential impact on existing businesses that have served Savannah’s hospitality industry for many years.

The Hotel Pere Marquette celebrated its grand opening on January 16, 1927, amidst the vibrant Roaring ’20s, characterized by flappers, the iconic Charlie Chaplin, and robust national economic growth.

Fast forward to today, the 83-year-old Downtown hotel is facing a significant challenge – a reconstruction effort during an economic recession not witnessed by the hospitality industry since the Great Depression.

Bob Marx, the executive director of the Peoria Area Convention and Visitors Bureau, referred to the Pere Marquette as “the little engine that could.” While possessing the determination to thrive, the hotel, like many others, is dependent on external support to weather the economic storm. Without substantial investment, the Pere Marquette is anticipated to encounter considerable difficulties.

The crucial decision lies with the Peoria City Council in the upcoming weeks – whether to revive the hotel to its former glory or if the associated costs pose too great a risk for taxpayers. A crucial step in this process is a vote on a contract with consultants HVS, who will conduct a market study for the proposed Marriott Hotel plan. The cost of this study is capped at $15,000.

Initially, in December 2008, the council greenlit a $102 million redevelopment plan for the Pere Marquette, transforming it into a high-quality Marriott Hotel. Public bonds of nearly $40 million were allocated to support the comprehensive project. However, the economic recession intervened, stalling financing for 1½ years. Now, the hotel’s developer, Gary Matthews of EM Properties, claims to have the necessary commitments to move forward.

Nevertheless, plans have been adjusted, featuring a scaled-down Phase 1 with 401-405 high-quality hotel rooms, down from the original 475. Matthews is optimistic about the potential addition of 100 more rooms in the next “two to three years” post-construction.

City officials, such as Marx, are hopeful that the Marriott’s success will attract investors interested in upgrading or purchasing the Holiday Inn City Centre, thereby enhancing the overall hotel landscape in Downtown Peoria.

Despite the challenges posed by the current economic climate, the Peoria Marriott project aims to address the shortage of high-quality hotel rooms. Marx is actively exploring opportunities within the industry to generate interest in further developments, envisioning a Downtown Peoria with 600 to 800 high-quality rooms.

The hotel industry is facing substantial hurdles nationwide, with revenue plummeting by up to 40% due to the recession and reduced business and convention activities. Real estate development, especially in the hotel sector, is deemed challenging and risky.

Similar struggles are evident in other cities, like Chicago, where overdevelopment has led to bankruptcies and closures of several hotels. The recession’s impact is pervasive, influencing occupancy rates for older hotels, including those in Downtown Peoria.

Critics of Matthews’ plan argue that, given the low occupancy rates and the prevailing economic uncertainties, constructing a $102 million structure backed by taxpayer bonds may not be prudent. Alternative proposals, such as connecting the Pere Marquette with the Holiday Inn City Centre via a skywalk, have been presented, but reception has been lukewarm.

The fate of the Pere Marquette and its transformation into a Marriott Hotel hinges on the decisions of the Peoria City Council, as they navigate the complexities of revitalizing the hotel amidst economic challenges.

HOUMA — Local hotel proprietors faced a challenging period of low occupancy rates in late 2009 due to diminished business travel, with Thibodaux’s Howard Johnson ultimately succumbing to closure on January 15, concluding its four-decade run in the industry.

David Jones, who served as manager and part owner for 19 years, acknowledged the impact of the recession, stating, “We just couldn’t make it work anymore.”

Following hurricanes Katrina and Rita, the Houma-Thibodaux area experienced a surge in business travel, driven by a flourishing oilfield and an influx of hurricane-recovery personnel, leading to a proliferation of hotel construction. Since 2005, Terrebonne’s hotel rooms more than doubled, and Lafourche’s increased by approximately a third, excluding ongoing construction projects like Wingate by Wyndham and Courtyard by Marriott in Houma.

However, current trends reveal a growing number of unoccupied rooms. Although specific occupancy figures were not immediately available from local tourist bureaus, sales-tax data from both parishes indicated a significant downturn in hotel business over the latest three months for which information is accessible.

In Lafourche, hotel sales-tax collections dropped by 38 percent in October, 54 percent in November, and around 47 percent in December, compared to the same months in 2008. Terrebonne experienced a similar decline, with collections down 58 percent in October and 37 percent in November and December.

Howard Johnson, which traditionally maintained an occupancy rate ranging between 55 and 60 percent in a typical year, witnessed a dramatic fall to as low as 20 percent in the final months of 2009, leading to the difficult decision to close its doors. This decision also resulted in the displacement of approximately 30 employees.

Despite recent renovations amounting to $150,000, the aging Howard Johnson faced stiff competition from newer establishments like the Hampton Inn and Days Inn, according to Jones.

Hospitality professionals, including Blair Stancliff, the general manager of the Hampton Inn in Thibodaux, acknowledged the industry-wide challenge. While the first three months after opening in January met expectations, the facility ended 2009 with an average occupancy below 50 percent.

Rene Claudet, manager at Houma’s Quality Hotel, highlighted the challenging period for everyone in the industry, emphasizing that the region’s hotels heavily rely on business, especially from oilfield-related activities. Despite recent difficulties, both Claudet and Stancliff expressed optimism for a rebound, noting positive signs in bookings for the upcoming months.

In contrast, the fate of Howard Johnson remains uncertain, as the building is currently seeking a new tenant. Jones expressed gratitude for Thibodaux’s support and wished that circumstances could have allowed the iconic establishment to continue its operations.