|By G.G. Rigsby, Savannah Morning News,
Ga.McClatchy-Tribune Regional News
June 09, 2011--Area hotels can expect to lose $11 million the first year a new convention center hotel is open on Hutchinson Island, the general manager of the hotel next door says.
Mark Spadoni, general manager of the 400-room Westin Savannah Harbor Golf Resort & Spa, said Wednesday the loss estimate is conservative.
"It's a significant amount of money to local hotels," he said. "Even if it's short term, it's still real money."
He spoke at the regular monthly meeting of the authority that manages the trade center. It's the first time Spadoni has spoken publicly about the proposed 500-room hotel that would be meant to attract new, big conventions to the city.
"We're in a very fragile industry now that's reeling from one of the most difficult times in the last 40 years," he said.
Increasing the supply of group and meeting rooms by more than one-third would hurt existing hotels that were built without the help of government-backed debt, he said.
The 500 new rooms would be added to the existing 1,400 group and meeting rooms in the city.
Spadoni has been manager of the Westin for 10 years. He has worked for Westin for 30 years and has been a general manager for 21 years at seven different properties, as large as 1,000-plus rooms and in places as diverse as Kauai and Seattle.
He described the Westin as a group and convention hotel in a resort location. He said more than 70 percent of the hotel's 100,000 room nights per year are for groups and conventions.
He said his hotel's primary competition comes from the other group and convention hotels in the city -- the Hyatt, Marriott and Hilton.
Spadoni said 42 percent of the business at those three hotels is for groups and conventions, with the rest transient.
Spadoni said 9 percent of the Westin's bookings come from Visit Savannah and 91 percent come from their own efforts.
The Westin's average rate is $170 with some group rates in the high $200s, but it also sold more than 7,000 nights for meetings that cost under $100. He said the rates are based on supply and demand.
The group rate is $8 higher than the transient rate. Occupancy, he said, is stabilized in the mid 60 percent range.
Spadoni said the smallest hotels have the highest occupancy and vice-versa.
"The bigger the hotel, the bigger challenge it is to drive overall occupancy," he said.
Big hotels thrive on large conventions and survive on small conventions, he said.
Meanwhile, Sam Kumar of Journeyman Austin told the authority he's close to securing a term sheet for a $50 million private loan and is 75 percent of the way toward securing $25 million in private investment.
The project also calls for $50 million in county-backed bonds.
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Copyright (c) 2011, Savannah Morning News, Ga.
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