Seasonal slowdown makes time for property upgrades

Homes are often spruced up during spring cleaning, but some hotel and resort owners find that fall and winter – after the busy summer travel season – is a good time for property improvements to protect their investments.

“Hotels and resorts have to replace everything every so often to keep the property looking fresh and keep up with the competition, which helps them maintain their property values,” said Tracy Kimberlin, president of the Springfield Convention and Visitors Bureau. “We have approximately 6,300 rooms in Springfield and if a property is old and tired and the owner is not willing to invest in it, they will lose revenue.”

Those losses, however, won’t just hurt the property owners.

“Tourism is one of our biggest industries, and we estimate that about 25 percent of all sales tax revenue is generated by visitors from outside of our city,” said Kimberlin.

Data from the city of Springfield shows collection of nearly $3 million from the hotel-motel tax in fiscal 2010, which ended June 30. And for the first three months of fiscal 2011, the city has collected nearly $700,000 from the tax. In Branson, hotel taxes typically represent about $7 million annually.

CVB data shows that the city’s hotel-motel occupancy rate was down 2.5 percent for the year through July, which could mean that there are fewer potential guests to attract to area hotels and resorts.

Off-season opportunity
Gordon Elliott, hotelier and owner of Elliott Lodging, owns properties throughout the Midwest, including 17 in Springfield and Branson. His southwest Missouri holdings, including two Candlewood Suites locations in Springfield, are worth an estimated $70 million, he said.
Elliott noted that it’s not uncommon for company officials to plan for improvements when travel season winds down.

“We are generally full March through September, and we always have a long list of things we’re going to do during the off season,” he said.

Though Elliott doesn’t have a set budget for annual improvements, he said he’s spent up to $2 million for yearly upgrades, with ideas coming from his own travels.

“I sleep in one of my hotel rooms at least two times a month,” he said. “When we travel, we stay at hotels with the latest upgrades and I take my camera.”

Recent and ongoing renovations and upgrades include removing outdated fixtures, carpet and drapery, installing flat-screen TVs and wireless Internet, adding new bedding and upgrading bathroom vanities to marble.

He said major changes would typically take one-fourth of rooms out of commission at a time until the work is finished, but he said it’s worth it.

“If we’re going to lose rent when the rooms aren’t booked, we might as well upgrade and try to get higher rents the next season,” Elliott said.

Recent upgrades for Elliott’s properties also have focused on energy efficiency, from installing thermostats that automatically adjust when rooms aren’t occupied to energy-
efficient lighting upgrades and recycling initiatives.

Elliott also has converted the chlorine pools to saltwater, a move that he says is less about property improvement than stewardship of the natural environment. Planting desert-type flowers, shrubs and bushes that don’t require a lot of watering is a change that boosts the overall look of the properties and is in line with the company’s green philosophy, he said.

Lynn Berry, director of public relations for the Branson Convention and Visitors Bureau, said aesthetic upgrades are important.

“Americans are always looking for what’s new,” Berry said. “When they see something is fresh, they tend to be drawn to that location. A little freshening to the curb appeal does bring special attention back to a property.”

Repeat-customer traffic
At Thousand Hills Golf Resort in Branson, a key challenge is keeping customers coming back, said President Dan Ruda. Thousand Hills manages about 300 rentals with one to five bedrooms.

The development’s 120-acre, 18-hole golf course has seen a slight drop – about 5 percent – in player course fees, Ruda said, noting that some of that decrease comes from more attractions beckoning Branson visitors.

“We have to keep the facility nice and make sure we get our share of the market,” he said.

A major interior upgrade, he said, was replacing beds with pillow-top mattresses and double white sheets. It sounds minor, he added, until you consider the multiple bedrooms in some units.

“You can easily spend $1,500 a bed,” he said. “We completed that in phases.”

Ruda said Thousand Hills caters to what he calls the “celebration vacationer,” which is those who meet for anniversaries, birthdays, weddings or family reunions.

Those travelers, he said, account for about 65 percent of Thousand Hills’ guest volume in the last 12 months, though he declined to disclose total volume.

Thousand Hills has beefed up its online marketing budget by 5 percent in each of the last two years to an undisclosed amount, Ruda said, but it’s the maintenance and property upgrades that bring in repeat customers.

“It’s all about delivering a quality product,” Ruda said. “If we don’t deliver a quality product, our customers won’t return.” 
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