Monday, May 10, 1999
Ky. hotels compete as occupancy dips
BY PATRICK CROWLEY
The Cincinnati Enquirer
HEBRON — Northern Kentucky's hotel industry is facing a Dickensian situation — it is the best of times, it is the worst of times.
Demand for rooms is up, but so many new hotels have opened that occupancy rates are down.
Just last week, a stunning 326-room high-rise Marriott hotel opened in the RiverCenter complex on Covington's riverfront while another 295-room Marriott — this one in Hebron near the entrance to the Cincinnati/Northern Kentucky International Airport — is scheduled to open in the fall.
This tale of two hotels shows how new entrants into the region's hospitality industry plan to compete in a crowded, growing market for tourists, visitors and business travelers.
The region's strong economy, success at attracting development and growing tourism industry has spurred the hotel building boom, with the number of rooms jumping from 4,000 to 6,000 in just the last three years. Demand for rooms locally grew by 6.6 percent in 1998, more than twice the national rate.
But the increasing demand for rooms has not kept up with even faster growth.
While new hotels are being built and opening in the region's lodging hotspots — the airport, the riverfront and Florence's interstate corridor — occupancy rates dropped 5 percent last year as the number of rooms available jumped by almost 12 percent.
“If there had been no growth in supply in 1998, the hotel community would have enjoyed a strong and prosperous 64 percent occupancy for the year,” said Carl Ward, past chairman of the Northern Kentucky Convention Visitors Bureau.
""The actual figure was 57 percent, below what is required for a healthy hotel community.”
That means local hotels are going to have to work ever harder to attract guests.
Pat Boylson is well aware of the state of Northern Kentucky's hotel market.
Nearly 20 years ago he was running banquet set-up for the Drawbridge Hotel in Fort Mitchell and learning the hotel business. Mr. Boylson went on to work at the Commonwealth Hilton in Florence, which helped touch off the Boone County hotel boom along Interstate 75.
Today Mr. Boylson is general manager of the Cincinnati Marriott hotel in Covington, which was developed by Corporex Cos. and operated by Commonwealth Hotels.
Standing last week in the hotel's impressive 15-story atrium, a waterfall gently cascading down a wall behind him, Mr. Boylson said he isn't spooked by the competition.
“We're a full-service hotel that has everything the business or leisure traveler is going to need, whether they are visiting Cincinnati or Northern Kentucky,” he said.
The riverfront Marriott will try to capture the business traveler with a host of amenities that include:
• More than 9,000 square feet of meeting rooms.
• Rooms that open to the atrium and look out on views of the Ohio River and downtown Cincinnati.
• A 450-space parking garage.
• A spa and fitness center.
• A restaurant and two cocktail lounges.
• Rooms equipped with extra large desks and multiple phone lines for computers and fax machines.
• A concierge service area featuring continental breakfast, a lounge, wood-burning fireplace and a big-screen television.
The hotel has a built-in benefit just across RiverCenter Boulevard — the new Northern Kentucky Convention Center.
Mr. Boylson said the hotel will also try to capture some of Northern Kentucky's growing tourist market to help fill rooms on the weekends.
“We'll have some packages that the leisure traveler is going to love,” he said.
Attractions like the Newport Aquarium and riverfront entertainment district, the Kentucky Speedway under construction in Gallatin County and even the new ballparks for the Cincinnati Reds and Bengals should help fill Northern Kentucky hotels, said Tom Caradonio, president and chief executive officer of the Northern Kentucky Convention and Visitor's bureau.
“We still have a long way to go on improving occupancy rates, but we see new attractions really starting to pull people in,” Mr. Caradonio said. “We do have an oversupply of inventory, but there's also some major things coming down the road that will help us work on that problem.”
In Erlanger, Peter Winchester bounds up to a table at the Airport Holiday Inn, slides his briefcase onto the table and before he sits down orders a light breakfast of yogurt.
“I'm on the run a lot these days,” Mr. Winchester said, finally settling into his chair. “We're getting closer and closer to opening.”
Just one I-275 exit away crews are working to finish the Airport Marriott hotel on Ky. 20 in Hebron. Mr. Winchester is the sales manager of the Airport Mariott, which is scheduled to open in the fall.
Mr. Winchester is asked why Marriott, a leader in the hospitality industry, is opening two hotels almost at once in the same area?
“Because we serve different markets,” Mr. Winchester said.
“There are people who come into this area who want to be on the river, who want to be near downtown or near the convention center,” he said. “But there are also a lot of people who want a full-service hotel near the airport.”
The Airport Marriott is also in an area of Northern Kentucky — from Mineloa Pike in Erlanger to Ky. 237 in Hebron — where industrial and office growth is rampant.
Just as Commonwealth Hotels operates the riverfront Marriott, Cincinnati-based Winegardner & Hammons, an experienced hotel owner and operator, is running the Airport Marriott. The company also owns the Airport Holiday Inn and 39 other hotels around the country.
The Airport Marriott plans to offer some specials to attract weekend business like weddings, small conferences and reunions and tourists.
“There is some saturation in this market right now,” Mr. Winchester said. “But only in certain segments, like the minimum-service hotels. We're confident a full-service hotel at the airport is going to thrive, or we wouldn't be building it here.”
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