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Feb. 8: Developer Interest is Key To Greenlight for Convention Hotel

Westin manager sees  role for Starwood

By Ted Carter
TBJ Staff

Savannah’s rise to prominence as a leisure travel destination has left the local hospitality sector to ponder whether the city can become a bigger draw for conventions and group meetings.

Private enterprise will provide the answer, probably by the end of the year.

Hotel developers will have a lot to weigh, starting with determining the upside to investing tens of millions of dollars in exchange for owning the flagship hotel for the Savannah International Trade & Convention Center.
Some major sweetener is also on the table: free land next door to the center, completed riverwalk and other infrastructure and financing through the sale of tax free bonds.

If a timetable set by the Georgia International and Maritime Trade Authority unfolds as scheduled, the authority will have a Request for Proposals “out on the street in 2010,” said Bob Coffee, the convention center’s general manager.

Coffee, members of the authority board and many of the people in the local hospitality business see the hotel as the fix for a major flaw in the convention center’s business model:  the dispersing of conventioneers and group meetings participants and the inconvenience of getting to and from the center. “The customer – the convention industry – likes Savannah as a destination,” Coffee said. “Their concern is there is not enough room capacity sitting close to the center. They don’t like being on the opposite end of the river from the center.”

The Westin Savannah Harbor Resort & Spa has been a huge asset during the center’s first 10 years of life and will remain so, Coffee stressed. But, he added, the center’s decade of operation has provided the data to support building an adjacent convention hotel, both from a local business standpoint and the center’s standpoint.

For instance, the data validates the oft heard lament of meeting planners that they want to book more rooms closer to the center, according to Coffee. “There’s been a growing awareness over several years that this was the case,” he said.

Mark Smith, a hotel management executive and chair of the authority, said the authority has a responsibility to get a convention hotel built. “The trade center was designed to be expanded,” he said. “Our mission is to have the maximum economic impact on Chatham County.”

The center, he added, “is not a static asset. It has to be developed and upgraded to respond to a dynamic marketplace that is always changing.

“This hotel has a direct relationship with the performance of trade center,” Smith added. “Our competitive environment is Charlotte, Jacksonville and Orlando…. As far as large hotels in Las Vegas, we compete directly with them in some cases.”

For instance, many meetings planners are more price conscious today and might choose to meet in Savannah instead of going to Las Vegas, Smith said.

Though the authority would like to strike a deal with a developer this year and see a hotel open three years later, Smith indicated the board is prepared to be patient. “We’re taking a 10-to 20-year view of the development and enhancement of the trade center asset.”

With hotels seeing both sagging occupancies and declining rates, a 10-year timeframe for a convention hotel is more realistic, said Mark Spadoni, Westin general manager. “I expect it to take a number of years for our industry to get back to where it was in 2008,” he said.

The Westin has the advantage of being both a resort hotel and a property able to accommodate conventioneers and group meetings participants. Spadoni said he would not like the odds for success if the Westin had to succeed solely as a convention property. “Any hotel built is going to have a hard time surviving on group and convention business,” he said.

The authority is being “very ambitious,” said Spadoni. “I think the long term vision for Hutchinson Island should include a hotel for groups and conventions.  My concern is that they are very careful” about accomplishing it.
Spadoni, who has been in his Savannah position for a decade, said he thinks “Savannah as a destination is being under utilized from a group and conventions standpoint. A lot of availability is not being used or maximized.”

With that being said, he added, “I can’t over emphasize the importance of having a synergistic plan” in conjunction with Westin  and the convention center.

What Spadoni has in mind for creating the synergy is operation of the convention hotel under management of Starwood, of which the Westin is a part.

Spadoni said Sheraton, a member of the Starwoods family, “comes first to mind.”

Such an arrangement would enable the convention hotel to use Starwood’s global sales operation “to direct business to Savannah as well as give its lodgers access to the Westin’s golf course, spa and river berths.

Spadoni said he does not see a business threat from a convention hotel. He reasons that in any event a hotel or two with as many rooms would be going up in downtown eventually.

Nor does Trade Center Authority chair and hotelier Mark Smith see a loss of business from a new entry into the market. “I can only speak for myself but I don’t foresee it as a threat,” said Smith, an executive with Prince Bush, managers of the Mulberry Inn on Bay Street as well the Holiday Inn Express on Bay and the nearby Hampton Inn.
Smith noted he has not heard any other hotel executives express concern about a new convention hotel.

Joe Marinelli, director of the Savannah Convention & Visitors Bureau, said in an e-mail the convention center and the Westin combine  “to attract hundreds of meetings and conventions each year.  Those events not only equate to thousands of hotel room nights sold (on both sides of the river), but also helps to generate hotel and sales taxes for our community and many, many jobs.”

From a meetings and conventions standpoint, Savannah is considered by most meeting professionals as a “third-tier” destination, Marinelli said. “Having a new convention-grade hotel, and potentially an expanded Trade Center as well, would elevate Savannah in the minds of planners throughout the country.”

The whole key to exploring the possibility of developing a convention hotel “is to attract new markets, or new business, to our city,” he said. “We are already very successful luring mid-sized association meetings from Georgia and around the region.  However, having the facilities to attract larger national meetings/conventions/trade-shows from associations and corporations would be our goal.”

Marinelli said he guesses “the market will tell us if this can be a reality or if, in today’s world, it’s just a pipe-dream.”
But even with the poor market conditions, Savannah has the attributes to make itself attractive to meeting planners, and thus attractive to a convention hotel developer, Marinelli noted. “We already know that Savannah is a place that people want to visit.  We have the authentic beauty, history, architecture and charm that visitors are looking for.

“That’s a good formula for convention planners looking for a destination that will inspire greater attendance at their meetings, which at the end of the day, typically means greater revenues for the organization planning the event.  Sounds like a win-win-win to me.”

Related Story: Convention Hotel a Possibility for Hutchinson Island

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