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Published: Sunday, 6/11/2006

Area hoteliers optimistic on summer

BY GARY T. PAKULSKI
BLADE BUSINESS WRITER

Before production engineer Linn Morrison headed out on a cross-country trip from his home near Springfield, Mass., he parked his gas-guzzling motor home and loaded a more fuel-efficient van.

And he moved up the date of the western excursion, which wasn't supposed to have happened for two years.

"We think gas prices are going to continue to go up," he explained Wednesday morning as he packed the van in a Motel 6 parking lot near the Ohio Turnpike in Toledo during a stopover on his return trip.

Officials in metro Toledo's crowded hotel industry are keeping their fingers crossed that tourists, however they respond, won't shun the road this summer because of gas prices in the $3-a-gallon range.

"We're expecting a strong summer," said Brenda Rowan, general manger of the Holiday Inn French Quarter in Perrysburg Township.

That optimism is not without justification.

Occupancy was up by 6 percentage points to 74 percent at area motels on the Saturday of Memorial Day weekend, according to Smith Travel Research in Hendersonville, Tenn.

Although hoteliers attribute some of the added business to youth sports events that brought in families from out of town, occupancy has been trending up over the past 18 months after years of stagnation.

Average occupancy rose to 55 percent for all of last year from 52 percent in 2004.

Through the first four months of this year, which is not a particularly strong time for local lodging facilities, occupancy was up 6 percentage points to 50 percent from the same period last year, officials at Smith Travel said.

Average room rates also are on the rise, which is good for hotel operators. They increased $1 to $60.30 last year and were at $64.28 through April 30.

Still, local operations lag the performance of hotels nationally, which in the first four months of the year charged an average of $96.34 and were able to fill 61 percent of rooms.

And the federal Energy Department forecast last week that gasoline will average $2.76 a gallon this summer, up 39 cents from the price in 2005.

That's not good for hotel operators in an area that one lodging executive criticized as "an overbuilt market."

With more than 6,000 rooms in Lucas and Wood counties alone, travelers have plenty of choices, said Jim Donnelly, president of the Greater Toledo Convention and Visitors Bureau. The area's room inventory grew by 12 percent over the past year, he said, with the opening of several 70-room motels in the Toledo suburbs.

About 40 percent of hotel stays locally, he said, involve one-night stopovers by travelers on the Ohio Turnpike, I-75, and other routes.

According to hoteliers, the industry locally is driven by such guests, along with sales personnel and others here on business; family reunions; youth sporting events; Cedar Point visitors seeking better rates than are available in the Sandusky area; and families within a 500-mile radius who come to Toledo to visit the zoo and other attractions.

But threatened by rising gas prices and a troubled regional economy, lodging executives in metro Toledo aren't standing still.

In Maumee, Image Hospitality Group LLC is building a $15 million Holiday Inn & Suites Hotel that will have 106 rooms and metro Toledo's first indoor water park.

It is expected to be completed this year. The chain owns five area motels, including an adjacent Comfort Inn.

The Red Roof Inn nearby will renovate its lobby next month and its rooms later in the year. Other Red Roof Inns locally and nationally are being refurbished as the Accor-owned chain attempts to reposition itself as a business hotel.

Travelers who aren't changing travel plans because of high gas prices are taking steps to cut costs.

Outside the no-frills Motel 6, on Heatherdowns Boulevard near the Ohio Turnpike, one day last week, license plates from distant states, as well as the presence of several vans, suggested more leisure travelers than did the lot of another nearby hotel, which appeared to be filled mostly with business people.

Motel 6 bills itself as the lowest-priced national chain.

"We tend to have more leisure travelers anyway," said Janice Maragakis, a spokesman in Carrollton, Texas.

"That increases when gas prices rise. People still go on vacation. But they'll reduce the length or distance and try to save money where they can."

Some area lodging executives are concerned.

The number of "walk-ins," or customers who arrive without reservations, has declined 10 to 15 percent at a Super 8 Motel at 1390 Arrowhead Dr. in Maumee.

Manager Mike Patel attributed the development to high gas prices and said he expects it to continue into the summer.

In response, the motel is more aggressively seeking group sales, he said.

"We're pursuing every lead we get much harder," he said. "We used to leave some rooms for walk-ins. But we don't want to leave it to chance."

Rooms rent for $49 to $69 depending on time of year and day of the week, he said.

But even at the lower end of the range, some customers seek less expensive accommodations. "A lot of the travelers have downgraded to lower-sector hotels," he said. "That includes senior citizens on a tight budget."

Mr. Patel has boosted marketing, including ads in a coupon book distributed at interstate-highway rest stops. "It's helped a little but not greatly," he said.

At the Econolodge, near the Spring Meadows Shopping Center in Springfield Township, owner Peter Nehda said he expects gas prices to dent room sales by 10 percent this summer.

So far, however, sales are running ahead of last year's and he has experienced no fallout from gas prices, he said.

Motel competition has put guests in the driver's seat, added the manager of a property near the Ohio Turnpike.

"People don't want to pay the rates," he said. "There is a lot of dickering. The hotel has to accommodate them or lose the guest."

The Holiday Inn French Quarter, a full-service hotel with two indoor/outdoor pools, expects sales to be about the same as last summer's.

"Last year was not a hallmark year, but it was a very good year," said Ms. Rowan, the manager.

"Gas prices are up 25 percent and we're not experiencing any loss. That's pretty healthy."

Contact Gary Pakulski at: gpakulski@theblade.com or 419-724-6082.



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