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Independent Hotels Converting to Franchise Brands; It's a Very Different Market Right Now 
By Dawn Bryant, The Sun News, Myrtle Beach, S.C.
Knight Ridder/Tribune Business News 

Jan. 13--Tough times are chipping away at the uniqueness that has made Myrtle Beach a tourist hot spot, with brand-name hotels beginning to replace independents. 

Most hotels along Ocean Boulevard remain independent, but at least four hotels are converting to franchise properties, hoping a recognizable name will boost business in an increasingly competitive market. 

They'll join other chains that have sprouted up along the Boulevard in the past 18 months. Hoteliers say more chains will come, with the independent properties that helped put Myrtle Beach on the tourism map needing a brand name to survive. 

"A lot of the hotels are really looking into it," said Mike Mishra, a Grand Strand hotelier for 15 years who last month changed his Tropical Shores to a Best Inn and Suites. 

"It's a very different market right now. Without a franchise, you cannot survive." 

More brand names might be moving in, but that won't replace the family atmosphere and charm independents offer, said Stephen Greene, communications vice president of the Myrtle Beach Area Chamber of Commerce. 

The chains could help the area attract more tourists because newcomers might flock to brand names more than independents, which only repeat visitors recognize, he said. 

"They're complementing it," Greene said. "It's different because our destination has always thrived on the family-name hotels." 

For years, independents with unique names such as the Chesterfield Inn and The Islander have dominated the Myrtle Beach hotel scene, each carving a niche and gaining a loyal following among guests who return year after year. 

About 74 percent of the 13.6 million visitors to the Grand Strand annually have been here before, and the average vacationer has seen the Strand nine times, according to the Chamber of Commerce. 

But the destination is dealing with a tough economy as it tries to reach a new tourism level. Leaders are branching to new markets such as the Midwest in efforts to fill the ever-increasing number of local rooms, which total about 60,000. 

A slowing economy hasn't helped fill that extra inventory. Business has been flat for the past two summers, and the number of visitors isn't growing at the same pace as rooms. Since 1990, at least 5,000 new rooms have been added in the city. 

Chain hotels say their name helps them fare better, especially during tough times. 

The oceanfront Hampton Inn has been about half-full this month, the slowest time of the year, and is "doing better than we did last year," general manager Tom Moore said. The hotel opened in June 2000 on one of the last vacant developable oceanfront lots. 

"There are a lot of other places seeing who has the business. You need a flag to draw people to your rooms," he said. 

Of the 200 hotels that line Ocean Boulevard from 82nd Avenue North to U.S. 17 Business, 15 are brand names, including Holiday Inn, Days Inn and Super 8. Nearly 93 percent are independently owned. 

National reservations can increase business by as much as 25 percent, hotel owners say. The lure is worth the thousands of dollars it takes in renovations and annual fees to meet franchise standards, they say. 

"Chances are you are going to hit a home run," said Chris Lacey, president of Patricia Resorts, whose Carolinian hotel at 25th Avenue North is becoming a Best Western. "More and more people as they go to a destination they are unfamiliar with look for a flag name." 

Rebekah Morgan of Missouri does. Brand-name hotels meet her standards better, offering amenities such as free breakfast, a hot tub, and indoor and outdoor pools, she said. 

"I look for price and options," Morgan said. 

The freedom of being an independent is worth not having a brand name, said Tom Leeper, who has owned the High Tide for 10 years. 

He might miss out on some business travelers who stay with brand names, he said, but he stays busy. 

"You operate the way you feel meets the clients' needs the best," Leeper said. 

Gaston and Grace Deschatelets, snowbirds from Canada, avoid brand-name hotels. They like the family atmosphere of smaller properties. 

"There's no more individuality," he said of the growing number of chains. 

Converting to a franchise isn't an untested venture in Myrtle Beach. In 1985, a hotel at 77th Avenue North switched to a Days Inn, and revenues jumped by 25 percent, said Moore, then the hotel's general manager. 

"It was the thing to do because our business boomed," he said. 

That's what Jack Robertson, owner of Grand Strand Inn and Suites, hopes will happen with Best Western's backing this year. He watched how the Hampton Inn moved in across the street 18 months ago, blocking his ocean view. Another chain is moving into his neighborhood this summer. 

Converting to the franchise was a tough decision, but an economical one, Robertson said. 

The promise of national reservations is appealing, and guests would get the amenities they want, he said. Nationally, Best Western reservation agents handle more than 10.1 million calls annually, according to its Web site. 

"It has gotten tough over the years with all the properties going up," Robertson said. "[The brand name] does give you an upper edge." 

The challenge will be assuring his repeat guests that the same faces will greet them at the counter. The name is changing, but people and management aren't. 

Although customers will get more, they'll also pay more. Robertson is increasing rates between 10 percent and 15 percent, a little more than the annual uptick. 

Prices went up by about $5 when the Tropical Shores switched to a Best Inn and Suites a month ago, owner Mishra said. He spent $500,000 remodeling to meet the requirements, but the tight market and customers' preferences forced him to change, he said. 

Couples who celebrated their honeymoon on the Strand return with grandchildren. Some properties rent the same room to the same family at the same time every year. 

With that loyalty, some independents say they don't need a chain's backing. 

"I know everybody's name," said Karen Stephenson, owner of the OceanFront Motel, which she has operated for 23 years. 

The family-owned hotel, in its second generation of ownership, has attracted a following that keeps the 44 rooms full during in the peak season, she said. 

"We've been here so long we've got an established base," she said. "Changing my name isn't going to make me run more full." 

Grace Deschatelets of Canada doesn't want to see more brand names along the Boulevard. She and her husband have visited Myrtle Beach for 20 years. 

"It's too bad," she said after attending a fish fry lunch at her hotel. "All you are is a room number. They don't know you." 

Hoteliers compare the influx of brand-name hotels to the restaurant boom of the 1990s, which brought Red Lobster, T.G.I. Friday's, Fuddruckers and Outback Steakhouse to the beach. 

The chains mingled with the local offerings. That's what will happen with the hotels, said Sharon Phillips-Kemerer, general manager of the Hampton Inn-48th Avenue North. 

During the restaurant boom, Stephenson watched as popular local eateries suffered because of the chains. Still, she's confident the OceanFront will survive because the hotel sits on the beach, the area's biggest attraction. 

William and Gary Nelson, golfers from Winston-Salem, N.C., are anxious to see the improvements at the Grand Strand Inn and Suites. The switch to a franchise is irrelevant to them. 

"We have always stayed here. It looks like it will be pretty nice," William Nelson said while eyeing an architect's drawing of the upgrades in the hotel's lobby. 

There's room for chains and independents, especially with the Grand Strand aiming to attract more visitors, Moore said. 

"I don't think it is going to hurt the smaller places because it brings in more people," he said. "There is a piece of the pie for everyone." 

-----To see more of The Sun News, or to subscribe to the newspaper, go to http://web.thesunnews.com 

(c) 2002, The Sun News, Myrtle Beach, S.C. Distributed by Knight Ridder/Tribune Business News. TGI, OSSI, 


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