|June 1999 - By Hal Lamar / Conventioneers, vacationers
and frequent visitors to Atlanta, especially those of African descent,
looking for places to go, things to do and good food to eat, will find
a plethora of choices. They can dine elegantly at Justin’s, one of a chain
of restaurants owned by entertainer Sean "Puffy" Combs, Keith Sweat’s Industry
restaurant and nightclub in north Atlanta, or chow down on greens, ribs
and other down home soul food delights at Owen’s smorgasbord on the southside
or Sylvia’s downtown. You can tour the palatial estate of Atlanta Life
Insurance founder Alonzo F. Herndon or visit the birth home of Martin Luther
King Jr. on Auburn Avenue. But after touring and eating at all those Black-owned
places, don’t bother scouring for Black-owned hotels in Atlanta. They don’t
exist. It’s a high-priced, and some say high-risk, venture, that few Blacks
across the country have ventured into.
At present, the closest you can come is Choice Hotel in Peachtree City, about 30 minutes outside of Atlanta. The 61-room hotel is owned by former Indianapolis Colts defensive end, Donnell Thompson. It is only one of several properties owned and controlled by Roswell-based Thompson Hospitality. The company’s other properties include two Marriott Sleep-Inn Hotels; one in Orangeburg, S.C. and the other in Macon, Ga. The two-year-old company has another Marriott Sleep-Inn under construction in Jacksonville, N.C., and a Town Place Suite under construction in Columbia, S. C. Thompson’s long-range plans are to open three to five hotels a year for the next six years. "The goal is to soon own between 15 and 25 hotels," he says.
Thompson got into the hotel business after owning several McDonald’s franchises in North Atlanta. He then sold those businesses and began opening hotels. To make his operation a success, Thompson has assembled a team of partners, many of whom were former teammates in Indianapolis. The list includes former Colt Christopher Hedder, Hank Thomas of Atlanta (former president of the Black McDonald’s Operators Association), Dr. Christopher Leggitt of Atlanta, former Baltimore Oriole star Eddie Murray and Atlanta Brave Otis Nixon, who grew up with Thompson in North Carolina. "I tend to pick partners carefully," he says. "Usually, I have known my partners for at least 10 years, so we are also friends."
Thompson’s organization is self-contained. "I build all my hotels from the ground up," he says. "When I open a hotel, generally the process takes about two years." Thompson admits to being "shocked" when he learned that he was virtually alone among Black-hotel owners. He says that he is the only known African-American to own a Choice Hotel franchise out of the 5,000 to 6,000 franchises nationwide and is the only Black to build a Marriott hotel from the ground up. "We own and operate all kinds of businesses, but we aren’t in this industry," he says. "What may stop many of us is the financing. With this kind of business, you’re talking about millions — especially if you are building from the ground up."
Getting Into the Business
Getting into the hotel business is not nearly as risky as you might think. It is estimated that hotels rake in $12 billion annually. At least $4 billion of that comes from Black people. Atlanta is certainly fertile ground for growth and success. According to the Atlanta Convention and Visitors Bureau, 3.2 million visitors annually choose between the eight downtown hotels or 19 in Buckhead for lodging. Counting motels outside the perimeter, there are more than 5,000 rooms available. The ACVB estimates that conventioneers spend $328 each on hotel rooms.
"The hotel business is the best kept secret in this country," says Kathleen Cross, co-founder of the National Association of Black Hospitality Allies, an information clearinghouse on the industry. Cross believes that financing and lack of an understanding of the industry is responsible for discouraging many would-be Black-hotel owners, which motivated the creation of NABHA. Gary Cross, her husband and co-founder, was regional sales manager for Hospitality International, which represents a number of hotel-motel chains.
He toured the country and convinced independent hotel-motel owners to convert to chains. In his travels, Cross began to notice that most of the budget and midmarket hotels were owned by Asians. He came across very few Black-owned organizations and estimates that Black people own less than one percent of the hotels in America. "Unfortunately, what’s out there are little more than dives," Cross says.
Katleen says her husband learned from Asian hotel owners that they had established an association that dispensed information for new owners and passed along helpful hints and advice for their membership. "Gary felt like we needed such a group to encourage our people to get into this business and teach hotel terminology," she says. He possessed desire for hotel ownership, but little knowledge about the business and, experienced hotel-chain operators didn’t seem eager to share information.
"We had a brother come into our offices and say he had $250,000 to open up a hotel but was told he didn’t have enough money," Gary says. "Now, we both knew that was bull. Believe me, you can buy a hotel for $250,000. They just didn’t have the time to teach him."
Rooms to Go
It appears that Blacks are slowly discovering the hotel gold mine. In addition to Thompson’s enterprise, Cross and partner Johhny Bell, son of the O.T. Bell who, founded Atlanta’s former Black-owned Bellview Hotel, plan to build a Microtel in the Auburn Avenue district. The project is on the corner of Auburn and Piedmont Avenues which was the former location of the Bellview, and later the Palamont Hotel. It’s slated to include an all-inclusive hotel, restaurant and shops. Work should begin on the project within the month with an anticipated completion date of mid-September.
A few companies in the hotel industry are also making strides to increase their ranks of Black franchise holders. In 1997, Cendant Corp. of Parsippany, N.J., parent company to eight economylodging chains, including Days Inn, Ramada Inn, Travelodge and Howard Johnson, began a campaign to recruit Black-hotel owners. Company spokesperson, Donna Dozier-Gordon says that on a list of 55 potential sites, six have actually opened. Those six include Ramada Inn in Cedar Hills, Texas, and Lenore, N.C., Travelodges in Greely, Colo., and Charlotte, N.C., (owned by former Charlotte mayor Harvey Gantt), a Windgate Inn in Orlando, Fla., and a Knights Inn in Carbondale, Ill.
Cendant also has a development deal with Cross’ firm, Cross Country Ventures, that includes a total of four properties on the drawing board located in Decatur, Augusta and Macon, Ga. So far, Cross Country Ventures has acquired a 100-room Travelodge in Macon.
Cendant is also working on a hotel-development project in Albany, Ga., which will be owned by the General Missionary Baptist Convention of Georgia and a Villager Lodge project under development in Marietta, Ga., with African-American franchisee Ernest Tate.
The Crosses are busy encouraging colleges like Tuskegee Institute in Tuskegee, Ala., and Cornell University in Ithaca, N.Y., to establish courses that encourage hotel ownership. Although some colleges, like Morris Brown in Atlanta, Ga. and Bethune-Cookman in Daytona, Fla., already have hospitality courses, they only prepare students for jobs in the industry. "We want those same students to own the hotels they work in," Kathleen says.
Although NABHA is less than a year old, they’ve already begun to amass clout. "We’re getting calls from major hotel firms asking how they can support us," she says. The organization is also working on forming an alliance with the Onyx Coalition, the umbrella for a number of Atlanta-based minority groups and organizations, as a way to increase its networking capabilities.
The idea, she says, is to reach some of Onyx’s 7,000 members to encourage
them to consider buying or building hotels. "They have the [money] and
we have the know-how to teach them the ropes," Kathleen says. "It’s a good
marriage. This might sound a bit ambitious but we hope within two years
to have 100 new hotel owners. This hotel pie is too big to run from. We
are here and don’t plan to go away."
• In 1895, Colonel Wesley Redding, a bank teller, entrepreneur and the first Black resident of Auburn Avenue east of Boulevard (where the MLK family home was located) opened the European Hotel in time to accommodate Blacks attending the Cotton States Exposition in Piedmont Park that year. The hotel opened three years after the Atlanta City Council passed an ordinance making segregation legal.
• In 1901, Katie McBride opened the Mackie Bee Hotel, said to be the "only colored hotel in the city." An advertisement indicates that rates are $1 to $2 per day and boasts of being "up-to-date and first class, completely furnished and meets every requirement of a strictly modern and first class hotel." It was located at 115 Houston St., at the corner Piedmont (Citizens Trust Bank is located on that corner today).
• In 1913, J.H. Hawk opened the Hawk Hotel near the Old Union Shed on Central Ave. Advertisements in The Atlanta Independent, a weekly-Black-owned Atlanta newspaper, boasted of the "hot-and-cold bath" features.
• In 1921, The McKay Hotel opened in the newly built Citizens Trust Bank Building on Auburn Avenue. In 1949, the name was changed to the Hotel Royal, which was purchased by entrepreneur Carrie Cunningham who also purchased the Top Hat Club in 1949 for $31,000 and renamed it the Royal Peacock.
• In 1924, Alonzo F. Herndon built and opened the three-story Herndon Building on Auburn Avenue at the corner of Butler Street. Among its offices and shops was the James Hotel, which was operated by Mary Walker James and her husband.
• In 1937, C.M. Pearson opened the Savoy Hotel in the Herndon Building after the James Hotel closed. It is said that hundreds gathered outside to see the Savoy sign light up on Auburn. The hotel’s ballroom became popular for its twice-weekly dances and was a favorite spot for club and fraternal functions.
• In 1951, developer Walter A. "Chief" Aikens opened the Waluhaje (a collection of the first letters of his children) building on West Lake Avenue in northwest Atlanta. The building was actually one of the first apartment-hotel sites and became popular for its ballroom featuring top jazz talent.
• In 1957, two new motels were established. O.T. Bell built the Bellview Hotel at the corner of Auburn and Piedmont (which later became the Palamont) and the University Motel on Northside Drive near MLK Jr. Drive. The hotel featured a small tavern, that became known as the Town Club. Rumor has it that the hotel was secretly financed by singer Ray Charles for a friend.
• In 1959, the three-story Danzig Motel opened on Chappell Road in northwest Atlanta.
• In 1967, James and Robert Paschal opened a five-story, 120-room Paschal’s Motor Hotel adjacent to their restaurant. In 1996, the complex was sold to Clark Atlanta University for $3 million.
• In 1975, a group of Black businesses formed the National Hotel Acquisition Corp. and purchased the 425-room Atlanta International Hotel for somewhere between $6 to $7 million. Within a year, the AIH owners were filing for bankruptcy protection under Chapter 11.
• In 1979, the Empire Real Estate board unveiled plans to build a hotel at Interstate-20 and Ashby Street. The plan stalled due to lack of available financing.
• Feb. 8, 1995, The Atlanta Journal and Constitution carried a front-page story on plans by several African-American business leaders and the Vine City Housing Ministry to build a 225-room hotel on Northside Drive just across the street from the Georgia Dome. The story included an architectural rendering and costs of between $12 to $15 million. Listed as owners were developers Real Property Solutions, a Black-owned firm, the Vine City Housing Ministry and Johnny Moore, owner of the parcel where the hotel would be built. George Hawthorne, president of Real Property Solutions, told the newspaper that they envisioned the facility "would be under the downtown hotel market but less expensive, more quality and service oriented." The project never got beyond planning.
|Also See:||Black Investors Want to Know, Where’s The Beef? / NABHA / May 1999|
|'NABHA Program Helps Develop Business / NABHA / Nov 1998|