News for the Hospitality Executive
|By Ted Jackovics, Tampa Tribune, Fla.
Knight Ridder/Tribune Business News
Nov. 10, 2003 - ST. PETE BEACH, Fla. -- Harry and Beverley Nicklaus had two rules for their children who grew up with the family trucking business in Pittsburgh.
One: Get a college education. Two: Leave home to attend school.
Their three daughters and son listened well. Two became lawyers and the others earned degrees in fine arts and hospitality management.
But the separate paths of Lenne, Deborah, Gregg and Valerie Nicklaus eventually led to St. Pete Beach, where they blend varied business backgrounds and personalities to run the 380-room Sirata Beach Resort & Conference Center on the site where their grandfather bought a tiny motel in the 1960s.
The Nicklaus group stands out in an era when locally owned and managed hotels have become increasingly scarce. That trend has resulted in less community participation on the part of hoteliers, more of whom must focus on short-term goals and distant corporate headquarters.
"Most family-owned hotels here have been involved in the chamber, in local politics and in the community," said Lenne Nicklaus-Ball, the eldest of the Nicklaus group and the resort's vice president of sales and marketing.
"Managers at the corporate hotels have a short shelf life, and the community as a whole loses as no one is interested in the area's small businesses. It can become all about the bottom line."
The group of family-owned and managed hotels with 100 or more units has dwindled to no more than two or three on Clearwater Beach and a handful in south Pinellas County, as retirements and opportunities to make more money selling out to developers takes a toll.
"It's the end of a dying breed," said Daryl Seaton, president of Sea Wake Resorts Inc., which owns and operates Best Western hotels on Clearwater Beach and in Crystal River. "It's hard to get managers together these days for things in the community."
Family-owned hotels often struggle for name recognition for marketing and reservations purposes, especially with the onset of Internet booking, said Jay Schrock, who directs the University of South Florida's School of Hotel and Restaurant Management at its Sarasota campus. Hotels under family ownership frequently seek to operate under national flags like Hilton or Marriott and turn to outside companies to operate the properties, he said.
Local hoteliers cite rare examples like the Sheraton Sand Key Resort, whose longtime general manager, Russ Kimball, is known for balancing community and corporate involvement while working for an owner who lives out of town.
Even the Nicklaus group sought outside management in 2000 after the neighboring TradeWinds resort approached them about a partnership to operate the Sirata.
The Sirata, rated three diamonds by the AAA Tour Book, might have been a mini-TradeWinds, with similar facilities that initially made joining seem attractive. But the Nicklauses eventually recognized they preferred to manage the Sirata themselves.
In August, the Sirata and TradeWinds ended their deal, returning the resort to its family status.
The Nicklauses' success draws on their ability to merge loyalty with different skills and fierce streaks of independence.
The siblings are unlikely to pass each other in the halls during the workday in the Sirata'a offices, but the four faithfully meet each day for lunch and business planning.
"This is not a democracy," Gregg Nicklaus said, "but we truly try not to divide and conquer. If there is a strong personal feeling, the other three often will yield."
But operating a hotel with more than 150 employees requires more than hands-on from the four Nicklauses.
"It's a family operation, but it is a very, very professional situation," said Rosemarie Payne, who was recruited from the TradeWinds to formulate a new marketing strategy. "They have given senior management autonomy to hire the right people and they have encouraged the rest of the staff to buy into the ownership mentality, that all of us are part of the business."
The resort has a Mediterranean feel. It has an eight-story main building, 15,000 square feet of meeting space, three swimming pools, two restaurants and two beach bars, including Harry's Bar, named for the founding grandfather. The family has invested more than $30 million in renovations and expansions to what originally was the El Sirata Motel, not including regular improvements.
If the Nicklauses stand out as a family that continues to run a large hotel, then the four siblings successfully working side-by-side is even more impressive.
"If you look at where we are today compared to where we started, we are unusual," Gregg Nicklaus, pointing to a series of photographs in his office chronicling the growth from a 3,000-square-foot motel to a 300,000-square-foot resort.
"We don't see this simply as an investment of 20 years or more, but as being a part of what this family represents. It transcends business philosophy. You have to commit to the same goals and family arrangement and be successful at it."
In personality, the Nicklauses are "totally" different, said Deborah Nicklaus, laughing as she repeats the word "totally."
Nicklaus-Ball, vice president of Sirata's sales and marketing, earned a fine arts degree. She enjoys meeting and talking with people, so sales became an ideal fit.
Valerie Nicklaus Hval is the youngest of the group, and the only one to study hospitality. She oversees operations and prefers the one-on-one rapport in shaping the staff.
Gregg Nicklaus, second- youngest, turned his outgoing personality and negotiating skills into becoming the resort's general manager after a stint as a lawyer specializing in real estate investments.
Deborah Nicklaus is the hotel's finance officer and the more active partner in the Nicklaus and Nicklaus St. Pete Beach law firm. She's detail- oriented, preferring to work behind the scenes.
The group credits their parents for providing what they euphemistically call "the opportunity" to learn business at an early age.
"I never seemed to let them have summer vacations," said Harry Nicklaus Jr., who roams the property helping guests. "There was the trucking warehouse to paint and trucks to wash.
"When Deborah finished law school, I told Gregg, 'Welcome to the trucking business," and he said 'I'm going to law school, too." They all went separate ways, but here we are."
In the early days, when it was surrounded by empty land, the El Sirata was open only during the winter. By the 1980s, the Nicklaus siblings, who spent time visiting and working at the El Sirata, realized Florida was emerging as a world-class tourist destination with the advent of Disney, the completion of the interstate system through Pinellas County and Tampa's new airport.
"We began to think, 'Why work for someone else?' " Gregg Nicklaus said.
When Harry Nicklaus Sr. died in 1981, Harry Jr. and the children purchased his share of the business. In 1985, the siblings bought 100 percent of Nicklaus of Florida.
Over the years, the group orchestrated a succession of expansions, including the purchase of an adjacent Holiday Inn. Many of their guests were visiting from the Midwest and Northeast, and a good number from Europe.
"The Sirata has always been known for its keen sense of marketing, especially with international business," said Carole Ketterhagen, executive director of the St. Petersburg/Clearwater Area Convention and Visitors Bureau.
Gordon Hendry, a retired anesthesiologist from Scotland, has visited the Sirata with his family twice a year for the past 15 years.
"We never go anywhere else," Hendry said. "It's a family place and it suits us. Plus, Harry's always about the place and we've met others up and down the beach who we regularly meet."
Hendry said he noticed a change in the atmosphere when the Nicklauses gave up the daily management, saying it was becoming impersonal, although he continued to receive thank you notes from the management.
The TradeWinds partnership became appealing in late 1999 to the Nicklauses after the family made $15 million in improvements with an eye toward expanding the Sirata's meetings business. It took nearly six agonizing months to agree to the deal, Gregg Nicklaus said.
The Nicklauses are circumspect about why the arrangement was terminated in August. They have spent $100,000 since then painting and replacing wallpaper and drapes, and anticipate spending another $400,000 in the next 10 months.
"We are trying to re-establish our business alliances with the chambers and local companies like Progress Energy to hold meetings and social events here," Nicklaus-Ball said.
The hotel has long depended on its name and reputation, drawing up to four generations of the same family as frequent guests.
But the goal is to fill the hotel, so the Sirata also must seek to diversify beyond its leisure trade that customarily totaled 85 percent of its business.
The Sirata made budget in September and was just under it in October, Nicklaus-Ball said, indicating the business has recovered quickly since its separation from the TradeWinds.
"I don't think of us as competing with corporate hotels or anyone else," Hval said. "Our philosophy is if we are out there, proud of that room, proud of that employee. That will please the guests."
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