News for the Hospitality Executive
|By Reggie Beehner, The Sun Herald, Biloxi, Miss.
Knight Ridder/Tribune Business News
Feb. 21, 2004 - WAVELAND, Miss. -- After operating under the franchise banner for nearly a decade, the former Holiday Inn on U.S. 90 has returned to its roots this year, reclaiming its status as an independent hotel.
Bill Lady, who has owned the hotel for 28 years, opted out of the hotel's franchise agreement with Holiday Inn in January and changed the hotel's name to Coast Inn and Suites.
Lady said he originally opened the hotel as an independent, running it under the name as the Waveland Resort Inn for about 20 years.
In 1996, as more casinos sprouted along the Coast, Lady said, he agreed to begin paying a franchise fee to Holiday Inn, which would allow the hotel to use the company's name and booking service. After a while, however, Lady said, he believed the cost of franchising, which ran as high as 11 percent of the hotel's monthly gross revenue, was hurting the hotel's bottom line.
"I didn't feel like we got the percentage of reservations over their systems to justify the franchise fee," Lady said. Instead, he wanted the hotel to create its own niche. So he negotiated an early exit from the franchise agreement, returning the hotel to its independent status.
In addition, Lady said, he leased out the hotel's lounge to Orangutang's, which operates a daiquiri bar in Gulfport, and contracted with a catering company to provide food for conventions and other hotel events. The transition, which forced the hotel to redo all its marketing and signs, may have slowed business for a short time. But Lady said he's confident now that the new operation is in place that things will pick back up.
"I think in the long run, this is a much better deal for a business operating in a small town," Lady said.
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(c) 2004, The Sun Herald, Biloxi, Miss. Distributed by Knight Ridder/Tribune Business News. IHG,