June 27, 2004 - Kevin DeTienne sees a bright future for the hospitality industry in Helena. And despite some recent financial troubles, the owner of the Holiday Inn Downtown believes he'll be around to see that future.

After missing some payments on a $3 million remodel completed in late 1999, DeTienne's Holiday Inn has been threatened with a September foreclosure. DeTienne said he's pursuing long-term financing options to stave off his creditors, but that if he can't line something up, reorganization under bankruptcy protection is a possibility. But, he insists, the hotel will stay open while he gets the books in order -- and well into the future.

"I've been here the last 20 years, and I plan on being here the next 20," said DeTienne, whose hotel employs more than 100 in the busy summer season.

The struggles of one of Helena's best-known hotels begs the question:

Does Helena have too many hotel rooms? DeTienne certainly thinks so. "Helena's overbuilt right now," he said. "We've added an influx of hotel rooms over the past few years, and demand is down. The pie got smaller, and we have more pieces."

Indeed, in the last few years, more than 300 rooms have been added to the city's inventory, bringing the total to more than 1,400. Perhaps more tellingly, most of the additional rooms -- including those at the Wingate Inn, Best Western and Hampton Inn -- cater to the same business/meeting/convention customers that DeTienne's Holiday Inn pursues.

Cathy Burwell, director of the Helena Area Chamber of Commerce, said the additional rooms mean having to aggressively market Helena at times of the year when hotels used to fill without much effort. "We've had some hotels tell us it's slower than in years past, but we think some of that is caused by the addition of those 300 additional rooms in the last three years," she said.

Visitation appears to be down slightly as well. According to figures provided by Travel Montana, lodging tax revenue in Helena was lower in three of four quarters in 2003 than it was the year before, with the only exception being the first quarter when the Legislature held its biennial session. But spring (-3 percent), summer (-7 percent) and fall (-5 percent) were all below 2002 levels. (Data from the first quarter of 2004 isn't yet available.)

Without naming names, though, Burwell said the bed tax figures may not be an accurate representation of tourism, because "there are properties in town that haven't paid their taxes. We could well be up 3 percent, but we don't know because they haven't turned in their collections."

Local industry veteran Marti Bara, currently general manager of the Best Western in the Great Northern Town Center, admitted that last summer was slow, and the extra rooms available in town made things even slower. She said things look good so far this year, though, and stopped short of saying the industry is overbuilt right now.

"We were not strong last year, and we did have more rooms to fill," she said. "But I have a good feeling about this summer. We're booked through June and have several big events coming in July." DeTienne has owned the downtown hotel, which was originally a Travelodge when it was built in 1978, for more than 20 years. He first turned it into the independent Park Plaza, then became a Holiday Inn franchise at the time of the renovation five years ago.

"There are a lot of good things on the horizon," he said, mentioning pending renovation of the Walking Mall and upcoming Lewis and Clark Bicentennial events as items that should help the local hospitality industry. "Our summer's looking really good, and we're optimistic for next year as well."

Hal Fossum, director of Downtown Helena, said the Holiday Inn is an anchor for the south end of downtown that many other businesses depend on to help draw customers.

"It's a huge asset for downtown and we will work to keep it open," he said. "Kevin DeTienne has done a terrific job, he's reinvested in the site and done some good things for it."

Fossum said that he sees a time on the horizon when Helena will need all the rooms it has now and possibly more.

"Helena is the center of population in Montana and that increasingly plays to our advantage in terms of conventions, meetings and retail trade," he said. "It's one of our advantages and we do intend to build on it."

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