News for the Hospitality Executive
|By Sheryl Jean, Saint Paul Pioneer Press, Minn.
Knight Ridder/Tribune Business News
Feb. 26, 2004 - Downtown St. Paul's most venerable hotel is getting a makeover for the first time in 14 years.
The interior of the 12-story Saint Paul Hotel will be completely remodeled with a multi-million-dollar price tag. The appearance of its 254 guest rooms and all of the public spaces, except for the St. Paul Grill restaurant, will change beginning this summer through early next year. The hotel will stay open during the renovations.
The 94-year-old hotel will enhance its Old World charm by serving tea and adding more period-style couches and chairs in the lobby, said general manager Chuck Paton. The hotel's cafe, banquet rooms and meeting rooms also will be remodeled and new furniture, wall coverings and carpeting will be added throughout.
Other changes include expanding the fitness center, adding safes in guest rooms, increasing the number of king-size beds to 200 from 150 and installing computer hook-ups in many rooms, Paton said.
Joan Palm, a spokeswoman for insurance firm The St. Paul Cos., which owns the hotel, declined to specify the project's price, but said it would be several million dollars but no more than $10 million.
"We want to maintain the hotel's position as a landmark property," said Bill Morrissey, president of the company that manages the Saint Paul Hotel. "We want to maintain our freshness and competitiveness. We just think the timing is right."
The Saint Paul Hotel, built in 1910, has a reputation to uphold. Royalty (the king and queen of Sweden), presidents (from Woodrow Wilson to Bill Clinton), world leaders (Winston Churchill), singers (Eric Clapton and the Dixie Chicks) and actors (Bill Murray) have slept there.
Wealthy St. Paul businessman Lucius P. Ordway built the Saint Paul as the city's "million dollar hotel" using architects Reed & Stem, who designed New York's Grand Central Terminal. The Saint Paul Hotel is now downtown's second-largest hotel after the Radisson Riverfront. It has 350 employees.
"Anything the Saint Paul Hotel does sets the standard for the hotel community," said Kirby Payne, a Golden Valley-based hotel consultant. The hotel's remodeling budget -- with a top per-room cost of $39,000, based on a $10 million expenditure -- is significant, he said.
In comparison, downtown St. Paul's 475-room Radisson Riverfront Hotel underwent a $9 million facelift, or $19,000 per room, and the 196-room Holiday Inn Rivercentre spent $7 million, or nearly $36,000 per room -- both in 2001.
The industry has no meaningful average per-room renovation cost because such costs depend on the type of hotel and the size and scope of the renovation, said Jeff Coy, a hotel consultant in Rochester, Minn. Coy said a hotel will typically tackle a major renovation if revenue has declined, the property is starting to show its age or it needs to keep up with changes competitors have made.
Last year, Mobil Travel Guide's rating of the Saint Paul Hotel fell to three stars from four. The hotel's revenue has been flat since 2001, when business and leisure travel dropped off after the Sept. 11, 2001, terrorist attacks, Morrissey said. He declined to disclose annual revenue, but said the hotel is profitable.
"We'd like to get fours stars back, but there's nothing planned in this (remodeling) that will guarantee four stars," Morrissey said. The planned renovation doesn't have anything to do with recently renewed discussions to possibly build a large downtown hotel to accommodate more convention visitors, he added.
The St. Paul Cos. bought the hotel from the St. Paul Port Authority in 1988. It's not unusual for insurance companies, such as The St. Paul, to own property as part of their investment portfolios. An added perk for the company, whose headquarters are nearby, is that it can direct visitors a few blocks to an elegant hotel.
Most of the hotel's business comes from East Metro companies such as 3M, Ecolab and The St. Paul Cos., Morrissey said. The hotel's 2003 average occupancy rate was 70 percent, better than the average rate of 55.6 percent for the St. Paul market.
The Saint Paul Hotel's average nightly room rate was $140 last year. The priciest room costs $625.
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(c) 2004, Saint Paul Pioneer Press, Minn. Distributed by Knight Ridder/Tribune Business News. SPC,