|By Dawn Bryant, The Sun News, Myrtle Beach, S.C.
Knight Ridder/Tribune Business News
Oct. 23, 2003 - With its first debt payment made, leaders are taking a harder look at what needs to happen to get the city-financed Radisson Plaza Hotel on track.
The Hotel Board Corp., along with consultants from the Strategic Advisory Group, are scrutinizing sales and marketing strategies, relationships with Radisson corporate and the use of group contracts. A special meeting is set for Nov. 5 to focus on the finances.
Officials also are creating specific goals that must be met by the Myrtle Beach Convention Center staff attending trade shows. That will allow leaders to measure whether strategies to generate citywide business are working. Sales staff attending will have to bring back a certain number of leads.
"We are being more demanding of Radisson," said Walt Standish, Hotel Board chairman. "The past is the past, but what I'm concerned with is what we are doing to get better."
The more aggressive approach with the struggling hotel surfaced Wednesday after the board's one-hour, closed-door conference call with UBS, the underwriters of the city bonds used to finance the $48 million hotel. Radisson officials and the media were not allowed in that part of the board's monthly meeting.
This month, the city made its first debt payment of $1.95 million using reserves. The next payment of $2.6 million is due in April.
The 402-room hotel, intended to generate citywide business, has missed room sales projections six of the eight full months it has been open. July and August were the best months.
Through August, occupancy has been about 41.5 percent at an average $103.07 rate per room. The occupancy percentage is in line with the seven other upper-end hotels that opened across the country about the same time as the Radisson, said Michael Pitstick, vice president of sales and marketing for Carlson Hotels, which oversees Radisson.
"Bottom line, 42 percent isn't good," said Brad Dean, board member and chief financial officer of the Myrtle Beach Area Chamber of Commerce.
After the solid room sales in July and August, room revenues fell nearly in half during September, missing the mark by 40 percent.
Overall revenues that month were off by more than $900,000.
"It was obviously a pretty disappointing month in September," said Joe Durham, hotel financial officer. "We missed the mark quite a bit."
Hotel leaders blame the lagging performance on the Shriners, which did not occupy as many rooms as was required in its contract. That cost the hotel $220,000 in revenue. But officials aren't going after the Shriners because it is a charitable group, Radisson General Manager Michael Poynter said.
Standish doesn't want to target the Shriners but urged hotel leaders not to sign contracts if payment isn't going to be pursued. He also wants hotel staff to do a better job forecasting group rooms.
"When we do a contract, we should be able to say we are going to go after them," he said. "[Otherwise], you might as well not have a contract."
To meet the projected booking pace, the convention center has a third sales person starting this month. The Radisson also wants to expand its sales staff.
"The more calls you can make, the more business you book," said Bill Sigmon, the center's sales director.
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(c) 2003, The Sun News, Myrtle Beach, S.C. Distributed by Knight Ridder/Tribune Business News.