|By Marla Matzer Rose, The Columbus
Dispatch, OhioMcClatchy-Tribune Regional News
July 07, 2011--Just over a year from the opening of the Hilton Columbus Downtown, operators of nearby hotels are sprucing up their own properties and hoping for a surge in business.
Occupancy for Downtown hotels has averaged about 66 percent for the first five months of 2011, up several percentage points from last year but still somewhat soft. In recent times, the Hyatt Regency, the Crowne Plaza and the Westin Columbus (the former Great Southern), among others, have undergone multimillion-dollar overhauls.
The next hotel to renovate could be the Hyatt on Capitol Square. Operators of the hotel confirmed yesterday that they are in the process of selling the property to Florida-based Driftwood Hospitality, which plans to change the 27-year-old Hyatt to a different brand starting Sept. 1.
Wells Fargo bank started foreclosure proceedings on the hotel last year; it had been owned by Hertz Investment Group of Santa Monica, Calif., since September 2007.
A Driftwood representative did not return calls seeking more information, but local hospitality executives said the hotel will become a Sheraton. That would give Downtown another new "flag," the industry term for a hotel brand, which is considered good because it can help draw a new customer base that is loyal to Sheraton.
General managers of other hotels say they're optimistic that the 532-room Hilton convention hotel will help all of its competitors in the long run by attracting more big national groups to the city. But the challenge in the first couple of years is that the $140 million, publicly financed Hilton could flood the market with rooms that aren't being absorbed quickly enough by these groups.
"Those first two years are going to be a challenge. We know that because of our funding, we're behind where we should be," said Brian Ross, head of sales for Experience Columbus. "We're still very, very nervous about 2013 and 2014. By 2015 and beyond, I think things will catch up."
The large national groups -- which Columbus hopes to attract with more than 1,100 hotel rooms attached to the convention center (between the Hyatt Regency and the Hilton) -- typically book their events years in advance. On the day that ground was broken for the Hilton one year ago, Experience Columbus announced that the Southern Baptist Convention will bring 16,000 convention-goers to town in 2015. However, competition remains stiff: Last month, Columbus lost out to Louisville, Ky., in attracting another big religious group that also would have brought thousands of people to Columbus in a few years.
"I think the consensus among the lodging community is that it would be nice to hit the ground running and instantly be able to grow the pie for everyone," said Eric Belfrage, a hotel specialist in the Columbus office of commercial real-estate firm CB Richard Ellis. "But realistically, the new hotel opening will be like taking your medicine. You know it's good for you, though it may briefly taste horrible."
Experience Columbus and other organizations are doing what they can to bring well-paying business to Columbus in the near term. Experience Columbus, with funding help from the Franklin County Convention Facilities Authority, has added a full-time salesperson in Washington, D.C., after years without one.
The Ohio Hotel and Lodging Association is helping to lobby the federal government to raise its hotel rate for Columbus, which determines what many visitors can spend when they come to town. The current rate for Franklin County is $94, compared with $102 for Cuyahoga County (Cleveland) and $115 for Hamilton County (Cincinnati).
"The General Services Administration sets this rate every year, and it determines not only what federal employees and contractors can pay, but also the state sets its rates according to the GSA rate," said Matt MacLaren, executive vice president of the state lodging association. "Some hotels aren't able to accept that rate, so then you're limiting the number of rooms available to certain groups."
Charles LaGarce, head of the Columbus Hospitality Group, which manages the Crowne Plaza and the Lofts hotels, said rates remain a major concern for hoteliers.
"We're in the middle of the pack ... in terms of occupancy, but we're at the bottom in terms of rates," said LaGarce, when comparing Columbus with cities such as Pittsburgh, Louisville and St. Louis. "Our big challenge is to get those four or five new national conventions that generate better average rates.
"I'm very concerned that we're probably a year and a half behind where we should be with marketing Columbus, and we're underfunded by $2 million to $3million per year compared to these other cities."
The local tourism industry is aware of the stakes in the coming few years, said Ross, of Experience Columbus.
"If we don't book enough rooms and the new hotel drives a hotel or two out of business, we get nowhere," he said. "We don't move forward. The point of the new hotel is to catapult us into the future."
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Copyright (c) 2011, The Columbus Dispatch, Ohio
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