Hotel operators question need for more lodging

CHARLESTON (AP) — Hotel operators aren’t so sure the Charleston-area market can sustain another inn.

Georgette Rashid George, who owns three hotels, said Charleston’s market has been “soft” for more than a year.

“I would say right now that the market is fully developed, especially the downtown area,” George said. “It means that adding more supply to a declining market would impact the hotels. It would not be a positive impact on the hotels.”

George owns and operates the Hampton Inn Charleston-Southridge, as well as the Wingate by Wyndham and the Holiday Inn & Suites Charleston West located on 2nd Avenue across from South Charleston Middle School.

The Gazette reported in August that the Charleston Urban Renewal Authority voted to enter into negotiations with Richmond-based KM Hotels to build a possible hotel at the former site of the Holley Hotel on Quarrier Street in downtown Charleston.

“While we have lots of wonderful things going on, my question would be is the highest and best use for the Charleston area another hotel,” George said.

Greg Boyle, manager of the Marriott Residence Inn near Yeager Airport, said adding another hotel to the city’s market is “just another piece of the pie. The pie can only be sliced so many times.”

Charleston will have seen two new hotels open by October. The Four Points by Sheraton remodel was completed earlier this year, which “has been peeling off a little bit of business from other hotels,” said Mark Cherry, general manager of the Embassy Suites Charleston.

A Courtyard by Marriott will add 119 rooms to Charleston when it opens in the fall, but that doesn’t concern Boyle, who said he thinks the market will “be able to absorb this hotel for sure.”

Part of the struggle for Charleston’s hotels is the city’s changing business climate, which has insulated it from much of the nationwide economic recession but also brought challenges. The petrochemical companies that once frequented Charleston’s hotels have been booking less, while government business has increased, Boyle said.

George agreed with Boyle regarding evolutions in industry around Charleston and throughout the state.

“There’s been some market changes with the oil and gas and the coal markets, and that’s just a fact. And those are what we have to overcome,” she said.

When asked if there is a replacement market for that declining business, George said it is the job of hotels to figure that out.

“It’s going to have to come from a lot of different areas,” she said. “I think there’s a lot of good things going on, but at the same time we have to deal with our short-term market realities.”

George said she has delayed some developments to “see how the market shakes out,” but added there are continued investments in her current hotels.

“We have spent close to $10 million on our properties to keep them as a leader in the market,” George said. “Between our upgraded products and our people, that I’m really proud of, that’s how we’ve chosen to stay vibrant in the marketplace.”

Boyle and Cherry said their hotels are unique enough to the city that the market hasn’t affected them dramatically.

“We’re the only extended stay hotel in the market,” Boyle said of the Residence Inn. “We provide rooms for people who are here for more than just a couple of nights: people that are on projects; people that are relocating.”

Boyle’s hotel has larger rooms with living areas and kitchens.

Cherry said the Embassy Suites is unique in that the hotel is entirely suite-style rooms. The brand has a loyal customer base, Cherry said.

“We may not be as hard hit as hotels offering only a room and breakfast,” Cherry said, though he did acknowledge occupancy there has declined somewhat.

Hoteliers worry that more hotels in the market could make business worse for those already established. Cherry said even large events aren’t filling hotel rooms downtown.

“That’s just an indicator that you’re not getting what we call compression in the market,” Cherry said. “If you’re not getting compression in the market it’s an indicator that the business is not there to justify another hotel. If you’re not full when there’s a big convention in town, what’s going on during a normal week? Everyone’s a lot less full.”

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