Hotel & Motel Management - October 6, 2008 - (Page 52)

52 Special Report INDEPENDENT HOTELS H&MM October 6, 2008 | HotelMotel.com www.HotelMotel.com/digital_edition Boutique Continued from page 20 “Trying to shoehorn Brand X’s design standards into the Glenn would have been difﬁcult, and it would have been costly,” he said. For example, the Glenn’s historic building worked better with a room size that’s smaller than that in a typical luxury hotel— about 300 square feet. Not having to make rooms larger at the dictates of a brand allowed Marvin to ﬁt in more rooms and achieve his vision of a boutique hotel. “Small and intimate was part of the DNA of the experience we were looking for,” he said. Plus, there is the beneﬁt of not paying franchise fees. “We have put our efforts into design and service, which has allowed us to compensate for any lost brand The Glenn Hotel [at left and below] is Atlanta’s ﬁrst independent boutique hotel. Owner David Marvin, of Legacy Property Group LLC, said keeping the hotel independent allowed the owners to design spaces without brand constrictions. Incentives another bonus for boutiques By Allie Johnson CONTRIBUTING EDITOR recognition,” Holtze said. “As a result, our rates and occupancy levels are comparable to our major brand competitors while retaining the revenue that would otherwise be servicing franchise fees. When compared to industry averages, Magnolia hotels are typically more proﬁtable than franchised hotels.” Challenges But as PKF outlined in its report, owning a boutique can present challenges, especially in an economic downturn. For example, Marvin said boutiques can take longer to ramp up and stabilize. “We’re in our third year and we have yet to stabilize,” he said of the Glenn. In contrast, he just opened a Hilton Garden Inn and expects it to stabilize within a year. Downturns can be tough, too. According to the PKF report, from 2000 to 2003, U.S. hotels averaged a decline in total revenue of 15.1 percent, while total revenue for boutiques studied declined by an average of 25 percent. The Glenn Hotel, Marvin said, experienced strong growth from its ﬁrst to second to third year. But because of the slowing economy and a tornado that affected business for three months, Marvin predicts 2008 growth will not be as robust as 2007 growth. “No owner is happy making fewer proﬁts from one year to the next, but as long as they’re not losing money, they’re satisﬁed.” Mandelbaum said. hmm@questex.com On Site with No Downtime Cost Efficient Refinishing and Upholstery Armoire Modification Custom Granite & Quartz Jack Pack & Bracket Installation 10-20 Rooms per Day Professional Finish Clean and Non-toxic Warranted Recognized Globally ONLINE EXTRA! For a story on the St. Petersburg, Fla., boutique Heritage Hotel and its ups and downs as both an independent and a ﬂagged property, visit www.HotelMotel.com/heritage. Tax breaks and other incentives, especially for historic buildings, can make a boutique hotel project especially attractive for developers and owners. “That’s how hotels get built right now with this credit crunch,” said Tim Dixon, a redeveloper of historic buildings and owner of The Iron Horse Hotel in Milwaukee, which is set to open in September. For his project—an industrial chic hotel in a 107-year-old building—Dixon got about $8 million. That came through two federal programs: the Federal Historic Preservation Tax Incentives, which assists in the rehabilitation of historic buildings and is facilitated by the National Park Service; and the New Markets Tax Credit Program, which assists development in designated areas and is overseen by the U.S. Dept. of the Treasury ofﬁce. As a bonus, Dixon got $275,000 from the city for infrastructure improvements around the hotel. For The Glenn Hotel in Atlanta, David Marvin, president and founder of Legacy Property Group LLC, purchased a building constructed in 1923 that had been vacant for 20 years. He also used federal and local incentive programs and netted $3.5 million in beneﬁts as well as reduced property taxes for nine years. Like Marvin, Dixon sold his federal tax credits to help ﬁnance the hotel, which is designed to appeal to motorcycle riders who will visit the new HarleyDavidson Museum nearby. “If you do it right, you can [use the money to] add the right amount of quality and luxury to the hotel and reduce your debt,” Dixon said. “It’s a balancing act.” LEGACY PROPERTY GROUP LLC 1.800.523.9448 www.therefinishingtouch.com CIRCLE NO. 142 hmm@questex.com http://www.HotelMotel.com http://www.HotelMotel.com/digital_edition http://www.therefinishingtouch.com http://www.HotelMotel.com/heritage http://www.therefinishingtouch.com

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Hotel & Motel Management - October 6, 2008 Contents NYLO Brands Mix Up Lifestyle Segment La Quinta Eyes Mexico, Canada for Growth Perspective Legally Speaking Marketing Matters Satisfaction Trends Maintenance Doctor HotelWorld Update Trends & Stats Independent Hotels Top Hotel Multiunit Owners and Developers Survey Cleaning & Maintenance Music Wallcoverings Supplier News Transactions Softgoods: Bedding & Linens People Events Ad/Editorial Index Marketplace Classifieds Checking Out

Hotel & Motel Management - October 6, 2008

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