….I didn’t realize that there are different “classes” of hotels – we do not have a “convention center hotel – everybody assumes that the Westin is a convention center hotel – it is not – it is classified as a resort – and meeting planners won’t book conferences in resort hotels -(as I understand it) — which means we are missing a ton of business – that is why the trade center issued an RFP. I also learned that there is not ONE totally privately-owned convention center hotel in the world – each city has so much to gain that most places do use a portion of public funds…..as I understand it -
Q&A for Journeyman Austin Holdings, LLC
1. Q (CS): Urban planner Christian Sotille, in charge of the downtown civic master plan, established the vision plan for Hutchinson Island some time ago – leading the way to make the new hotel project a reality. What did that entail?
A: The Parcel 7 master plan, completed in September 2006, was commissioned by GIMTCA, Chatham County, City of Savannah, MPC, and Savannah Harbor. The consultant team, led by Sottile & Sottile and local firms, created a plan that includes future expansion of the trade center, a dedicated convention center hotel, retail, a signature restaurant and recreational facilities (e.g., music venue, parks and NOAA interpretive center). All are compatible uses that will boost tourism revenues as shown on the parcel7savannah.com website.
2. Q (RR): A convention center hotel was included in the Parcel 7 master plan completed by Sottile & Sottile. Why is a convention hotel needed and what led to the Trade Center Authority’s ‘Hotel Development Request for Proposal’ issued last year?
A: The reason the Trade Center Authority issued the RFP is to attract a qualified developer to deliver a dedicated hotel that will help increase the Trade Center’s bookings for large conventions and national events. Essentially, convention business is being left on the table. Lost business reports indicate a number of meeting planners have avoided booking at the Trade Center primarily because it lacks two things: 1) a guaranteed hotel room block (2-5 years in advance), and 2) accommodations “all under one roof”.
Independent market studies, a local economic impact report and 3 individual hotel operator reviews were undertaken to determine economic viability of this project. Consensus is there is sufficient demand for a new hotel. The Authority also wanted to take advantage of low construction costs available given current economic conditions.
3. Q (PM): In previous discussions, you indicated there is no dedicated convention hotel. Does that exclude the Westin on Hutchinson Island? If so, why is the Westin NOT considered a convention hotel property?
A: In the hotel industry, there is no one-size-fits-all approach to branded properties. Each property is designed according to predetermined brand standards, and most importantly positioned for a specific target market and classified in categories such as “economy”, “airport”, “convention” or “resort”. The Westin is classified as a luxury golf resort, not a convention hotel, and it was not positioned, designed or programmed to serve the Trade Center. For example, as you approach the TC at the main entrance/drop-off, you are looking at the back of the hotel and its loading dock. Although the Westin is a fine hotel and delivers a wonderful resort experience, the proposed CCH will become a more integral part of the TC with a room block and rates that are more consistent/competitive in the convention market.
4. Q (PM): I understand this hotel development will:
-double savannah’s convention business
-add 83 thousand new room nights
-create 1170 new permanent jobs
-generate over 900 local construction and supply jobs over the next two years
-add 83 million dollars in local spending per year
-bring 29 million dollars in earnings to the local economy
If the hotel is NOT built now, what is the economic impact?
A. What we are addressing here is an economic concept known as opportunity cost, which is the true cost of an opportunity forgone. In this case, it means the unearned convention and tourism revenues, lack of job growth and loss of significant cost savings available with current construction pricing. Savannah is already noted in the tourist/leisure segment as a top ten destination, and with its reputation among meeting planners, there is tremendous potential to generate volume business from outside the city. There is also a limited window and the timing could not be better to get this project underway.
5. Q (RR): In October 2010, Journeyman Austin Holdings was selected as the developer and design builder. What has happened since your team was selected?
A: After the selection, we have worked together with the county and the trade center authority to review financing options and determine the most favorable financing methods. We have also developed the design concept in conjunction with stake holders and initiated our community business outreach plan. Our work continues as a collaborative effort with all stakeholders in this project.
6. Q (RR): What is the proposed funding package?
A: In collaboration with all stakeholders, we have come up with a narrowed set of options that provides them with the least amount of risk – and at the same time they have control over the process.
7. Q (RR): Do all large convention center hotels require a level of public finance support? In what other cities has this been successfully done?
A: Yes, some form of public finance is always needed because of the type and size of the convention hotel and its program and price point that supports the Trade Center and attracts conventions. The main job of the CCH is to allow the convention business to grow, it is not positioned to compete with tourism business. We have partnered with cities including Omaha, NE / Vancouver, WA, Denver, CO / Austin TX and others. All have generated more convention business, stimulated the economy and created job growth. The product has many more benefits to the local community and government in that it creates massive outside dollars, bed tax and sales tax and in all cities has uplifted other local hotels citywide with spill over business.
Just like these cities – The Trade Center hotel project will add jobs to the local economy, both temporary and permanent. It will bring in a lot of work for local engineers and design consultants, minority/woman owned firms, contractors, vendors and tradespeople – We always strive to reach a high level of local participation (as much as 92% as we did in Omaha) and we have an extensive business community outreach program.
8. Q (RR): How many other markets have you done this in?
A: We have completed full-service convention hotels in at least 6 cities. In addition, we have completed at least a dozen other select services properties across the country. In total, our team members have developed and constructed more than 4,000 “keys”.
9. Q (RR/PM): What will help sustain the hotel’s growth and success?
A: First of all, the hotel will be programmed, physically and functionally, to serve the Trade Center with a dedicated room block and affordable rates around $158 per night.
Secondly, there are adjacent blocks on Parcel 7 – each with different uses proposed that will bring in additional revenue and enhance activity on Hutchinson Island as they create spill-over business for the City and County.
Hutchinson Island will become an extension of downtown as part of the long term vision. Future development of adjacent blocks will attract larger events and help Savannah secure its position as a premier tourism and convention destination. Most importantly, this next phase of the Hutchinson Island Trade Center campus will be the catalyst for future growth.