|By Melissa S. Monroe, San Antonio Express-News|
Knight Ridder/Tribune Business News
June 19, 2004 - San Antonio's downtown Adam's Mark hotel will convert to a Crowne Plaza Hotels & Resorts property next month, giving franchise owner InterContinental Hotel Group its 17th local hotel. It already has a local presence with Holiday Inns, Candlewood and Staybridge suites.
Crowne Plaza is a result of a joint venture between Pyramid Advisors, a Boston-based hotel company, and Morgan Stanley Real Estate Fund IV-Domestic, which acquired a portfolio of eight Adam's Mark hotels late last year from St. Louis-based HBE Corp.
The $236 million acquisition gave the partnership 2,887 hotel rooms. Dallas and Houston each have three Crowne Plazas and Austin has one.
A few of these Adam's Marks -- including the 410-room San Antonio property -- are getting multimillion-dollar renovations.
Adam's Mark General Manager George McGann said the property -- which becomes a Crowne Plaza on July 9 -- will receive $6.3 million in exterior and interior upgrades during the next year. The hotel already has 37,000 square feet of meeting space.
Pyramid is also investing $18 million in its Houston Adam's Mark to convert it to a Marriott hotel, according to Pyramid's Web site.
"Overall we do well in Texas, and it's an important piece of business when we go after groups, meetings and state association business," said Kevin Kowalski, Crowne Plaza's vice president of brand management. "We have to have all major markets presented, and San Antonio now fills that out." Crowne Plaza, with more than 200 hotels and 58,000 guest rooms in 49 countries, was created in 1994 from the Holiday Inn group.
In 2001, the National Association for the Advancement of Colored People sued the Adam's Mark chain, claiming it had discriminated against black guests. Local activists picketed outside the downtown San Antonio hotel. Adam's Mark later settled the claim.
The San Antonio property has improved its first-quarter numbers from a year ago. First-quarter revenues per room, which is a benchmark figure of a hotel's health, was $81.47 -- $18.47 higher than a year ago, according to local hotel firm Source Strategies Inc.
Average room rates were about $116, and it had a 70 percent occupancy rate, an increase of 15.5 percentage points over the prior year.
The Crowne Plaza Hotel in downtown Houston has 259 rooms, with a first-quarter revenue per room of $70.89, which is an increase of $11.34 from a year ago. Its average daily rates were about $130 and occupancy was up 4.6 percentage points to 54.6 percent in the first quarter.
Source Strategies' Bruce Walker, former senior vice president of marketing and strategy for La Quinta and Holiday Inn, said though the brand struggled in the early 1980s, it provided Holiday Inn with a more upscale product.
With Holiday Inn's strong reservation system and its presence, Walker said, Adam's Marks' revenues could increase 10 to 15 percent.
To get up to Crowne Plaza standards, McGann estimates his staff of 300 will increase another 10 percent. He said he also has a "solid" sales team on board to aggressively sell the property and bring up second-quarter numbers.
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