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Merger of Sprint Corp. and Nextel Communications Inc.
Could be a Boon to Kansas City's Lodging Industry
By Rick Alm, The Kansas City Star, Mo.
Knight Ridder/Tribune Business News

Dec. 21, 2004 - The $35 billion merger of Sprint Corp. and Nextel Communications Inc. could be a boon to Kansas City's long-suffering lodging industry.

With 17,000 area workers, industry consultant Jeff Marvel ranks Sprint as the metropolitan area's No. 1 generator of hotel room demand.

Marvel, president of Kansas City-based Marvel Associates, said estimates from a few years ago when economic times were admittedly better showed that the giant telecom company consumed about 30,000 area hotel room nights a year.

"I have no idea who's in second place," Marvel said. "It's not even close. Sprint is the big dog in town. They're the biggest demand generator in this part of the country."

The potential windfall for the local lodging industry lies in announced plans for the merged headquarters to be in Reston, Va., in suburban D.C., while most operations functions will be concentrated at Sprint's Overland Park corporate campus.

If that's how it plays out, Marvel said, high-end luxury hotel properties, particularly in the Country Club Plaza area, could take a hit while midlevel properties in Johnson County would hold on to existing Sprint business and could even post gains if the merger results in a larger local operation.

That scenario "would be significantly better for Kansas City," Marvel said.

"If the operations consolidate in KC, which makes sense because of the lower cost of living here, that's where the bulk of the (hotel) demand is concentrated with hiring, training and sales functions coming in.

"If headquarters and board activities concentrate in the D.C. area, the luxury end of the market in Kansas City may get nicked a little bit," he said. "But I'd rather have an extra 10,000 room nights at $75 a night, for instance, than 1,000 more room nights at $125."

The nation's lodging industry weakened under recessionary pressures that began in 2000 and was sent reeling after the Sept. 11 terror attacks in 2001 that triggered a worldwide travel depression.

Kansas City's record annual hotel occupancy rate of 70.8 percent in 1996 came amid a booming economy and, significantly, ahead of a wave of new hotel construction that has been coming online ever since.

When the economy began to weaken in 2000, business travel was an early victim. Things only got worse in 2001.

The crisis in Kansas City peaked in 2003, when increased supply slammed headlong into sharply decreased demand, pushing occupancy rates to a historic low of 56 percent.

Recovery this year is well under way. Through summer, Marvel has pegged the 2004 annual rate at around 59 percent, and he speculates 60 percent is within reach.

Meanwhile, Missouri Division of Travel data sources recently estimated statewide lodging occupancy at 59.8 percent, up more than 3 percent over 2003.

Better yet, through the summer travel season the division estimated total spending by travelers statewide at $6.16 billion, up 12.8 percent over last year.

FOOD FOR THOUGHT: Powell Gardens in Kingsville has thanked Missouri Sen. Jim Talent for helping it land a $250,000 federal appropriation.

The Republican senator, a member of the Agriculture and Energy and Natural Resources committees, won the funding for educational programs that will be staged in a 12-acre "Heartland Harvest Garden" addition planned to open in 2007.The exhibit will offer hands-on educational experiences that celebrate the region's agricultural bounty and heritage.

Garden officials say the exhibit will be the only one of its kind in the nation, including programs on the food chain "from seed to plate," plant science and water conservation.

Powell Gardens, 30 miles east of Kansas City, was established in 1983. The grounds are open year-round except some holidays. For more information, go online to www.powellgardens.org.

HELPING HISTORY: Hampton Hotels is the first lodging brand to be nationally recognized for its historic preservation efforts.

The chain recently won the Smithsonian Magazine/Travelers Conservation Federation "Sustainable Tourism Award" for projects under the company's 5-year old "Save-A-Landmark" program.

The list includes making adobe mud bricks to rebuild a historic home in Santa Fe, N.M., and refurbishing the 81-foot-tall National Monument to the Forefathers in Plymouth, Mass.

Hampton is now turning to the public to identify other preservation projects around the country in need of a helping corporate hand, and to cast online ballots to help select the company's next project.

Memphis-based Hampton is part of the Hilton Hotels Corp. that owns or manages 2,200 properties world wide under a variety of flags including Doubletree, Embassy Suites, Homewood Suites and Hilton Garden Inn.

For more information, go to www.hamptonlandmarks.com.

To reach Rick Alm, call (816) 234-4785 or send e-mail to ralm@kcstar.com.

-----To see more of The Kansas City Star, or to subscribe to the newspaper, go to http://www.kansascity.com.

(c) 2004, The Kansas City Star, Mo. Distributed by Knight Ridder/Tribune Business News. For information on republishing this content, contact us at (800) 661-2511 (U.S.), (213) 237-4914 (worldwide), fax (213) 237-6515, or e-mail reprints@krtinfo.com. FON, NXTL, HLT,

 
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