News for the Hospitality Executive
|By Mark P. Couch, The Denver Post
Knight Ridder/Tribune Business News
Jul. 30--Denver hotelier Steve Holtze is planting the seeds of a new hotel chain.
The Magnolia brand is a concept that Holtze hopes to spread across the country, creating a niche of business boutique hotels in wilted downtown office buildings.
This spring, the Holtze Hotel in downtown Denver was rechristened The Magnolia to match its name with a counterpart hotel that opened in Texas in 1999.
Holtze recently hired a hospitality executive to help launch the brand in other parts of the country. Doug Cogswell is the Magnolia's Johnny Appleseed -- the man in charge of scouting the countryside for buildings that fit the company's growth plan.
Cogswell is a former executive with Vail Resorts Inc. and former head of Colorado Ski Country USA, a trade group for resorts.
Changing the Denver hotel's name and hiring Cogswell are the first steps toward a longtime Holtze dream to establish a national brand.
The company's goal is to open three more Magnolia hotels in the next five years, then offer the brand as a franchise to other hotel owners.
In recent weeks, executives have toured or plan to visit Atlanta; Chattanooga, Tenn.; and West Palm Beach, Fla., to search for possible sites.
The Magnolia plan is rooted in the idea of generating new life out of older buildings.
"We strongly believe in urban redevelopment," Cogswell said. "There has been a good opportunity to turn around buildings that have been abandoned."
The expense and risk associated with expanding the brand nationally could sap the energy out of the company if it grows too fast.
The Dallas hotel cost $42 million and a Houston hotel is pegged to cost $51 million.
"It takes a little bit longer to restore an old building than it does to just buy a piece of dirt and start from scratch," said John Montgomery, president of Horwath Horizon Hospitality Advisors of Denver.
There's also a lot of competition. Other developers have established lucrative operations by redeveloping historic properties.
In downtown Denver, the Hotel Monaco and the Hotel Teatro are just two examples.
"Their concept is good," Montgomery said. "Is it new and different? No. But is it something special? Sure. They pay attention to some important details and they've done a nice job."
The Magnolia's operators are aiming primarily for business travelers who want central-city accommodations, but prefer historic properties to the buzz of glitzy new buildings.
So far, the Magnolia hotels are a bit larger than other boutique hotels.
In Denver, the Magnolia has 244 rooms. The Dallas Magnolia has 330 rooms. The Houston building will have 315 rooms.
"We have quite a few more rooms than other historic hotels, so rather than aiming for a solid social business or high-end business traveler, we look for group business," Cogswell said.
The company has targeted abandoned buildings.
The Denver Magnolia hotel, which opened six years ago as a Holtze hotel, is in a former bank office. In the early 20th century, the German National Bank based its operations in the building at 818 17th St.
A service elevator that the hotel still uses has a cab lined with heavy metal walls -- a security feature that bankers believed would protect money as it was moved within the building.
The Dallas Magnolia is in the former headquarters of the Magnolia oil company The building had been vacant for several years, but it retains a distinctive rooftop red Pegasus that the former occupant of the building left behind.
In Houston, reconstruction of a former newspaper's office building should begin in the next two months.
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