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 Developers Have Plans for at Least Four New
 Hotels in Fayetteville, North Carolina Area

By Al Greenwood, The Fayetteville Observer, N.C.
Knight Ridder/Tribune Business News

June 13, 2004 - --Developers have plans for at least four new hotels in Cumberland County.

Some of those plans are close to becoming projects, while others are still being developed.

The most recent surge of new hotels happened in the 1990s, leaving Fayetteville with an excess of rooms.

From 1996 to 1999, the number of hotel rooms in Fayetteville increased from 3,974 to nearly 5,000. During the same time, the average occupancy rate dropped from 65 percent to 50 percent. A hotel market generally breaks even at 60 percent.

Over the years, the hotel business in Fayetteville has fluctuated with the market. The industry in Fayetteville is having its third consecutive good year.

Developers are considering hotels because interest rates still are relatively low, and Fayetteville's hotels are filled with reservists, said Mike Gould, general manager for the Holiday Inn Bordeaux on Owen Drive. The Army will lodge reservists for at least another year.

The Mehta family has submitted plans to build a 104-room Hilton Garden Inn on Sycamore Dairy Road. The Mehtas operate the Days Inn on Person Street and the Holiday Inn Express on Skibo Road.

Skibo Investors is negotiating a contract to build a hotel behind O'Charley's restaurant off Skibo Road, said Charlie Manis, manager of the company. "This looks like a serious offer," he said.

A hotel could be an option on 52 acres that JKAM Investments is developing off Yadkin Road, according to the company's manager, John McCauley.

Another developer said he has plans to build a hotel. Those plans are tentative.

The reservists won't stay in Fayetteville forever, Gould said. Plants have closed in Cumberland County, which has hurt business travel. Companies have adopted new technology, and their employees travel less as a result. Officers for restaurant chains and retailers now drive from Raleigh to visit sites in Fayetteville, Gould said. Instead of staying overnight, they drive home.

If the reservists leave, Fayetteville's hotel market could revert to 2000 levels, said Gene Ammons Jr. He owns the Sleep Inn and the Fairfield Inn, both on Interstate 95.

"All of sudden, Fayetteville is back to being overbuilt. Everyone gets back to being in a rate war," he said.

It's difficult to predict how the hotel market would change if the reservists leave, said John Meroski, president of the Fayetteville Area Convention and Visitors Bureau. Leisure travel could increase, he said.

"Five years from now, there could be five new corporations in town," Meroski said. "It's just highly unpredictable. And it makes it very difficult to do our jobs."

For Skibo Investors, a hotel would benefit from the restaurants and stores that the group plans to develop off Skibo Road, Manis said. The hotel will be in the Cross Creek Mall area. The area has the highest demand for rooms in Cumberland County. Some niche markets within Fayetteville are under served, he said. The right hotel could tap into those niche markets and stay full, he said.

"There is a lot of talk," Meroski said. "It would be interesting to see what shovels actually end up in the ground."

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