Recession, Crowded Market Squeezing County Hotels

280 More Rooms Opening In Months

March 17, 1991|By Erik Nelson | Erik Nelson,Staff writer

Howard County's 31 hotels and motels, squeezed by a recession that already has pushed one into bankruptcy, could face more troubles with the arrival of two more hotels in coming months, local managers say.

In June, the 149-room Courtyard by Marriott, aimed at the short-stay business traveler, will open near Dobbin Center on Route 175. And construction is expected to begin soon on Homewood Suites, a 131-roomextended-stay hotel intended for relocating executives and their families and for longer-stay business travelers. Homewood Suites will bebuilt in the Columbia Restaurant Park, formerly the Benson Business Center.

County hotel managers say the new arrivals come at time when recession-conscious businesses are cutting back on meeting and travel budgets, and Baltimore hotels no longer overflow into the suburbs.

The industry crunch forced one hotel, the Columbia Hilton, into filing for protection from its creditors under Chapter 11 bankruptcy Jan. 17.

Mark Stielper, general manager of the 176-room Holiday Inn Columbia in Jessup, said he and others fear the two new hotels will make business even more difficult.

"If they took 20 rooms away from me, that's catastrophic -- that's 11 percent occupancy," Stielper said.

The trend became painfully evident last Monday, when a travel agentphoned Stielper to say a group that had booked 35 of his rooms was canceling because it had been offered better rates from two competing Howard County hotels.

"We offered them rates lower than five yearsago," said Stielper, whose base prices are lowest among the county'sfour largest hotels. "You know you've got problems when the more expensive hotels are undercutting you."

Nevertheless, the new Courtyard hotel will open amid this shaky market.

Paul Novak, senior vicepresident for Marriott's Courtyard, Residence Inns and Fairfield Inns, said the company committed to the project 12 or 18 months ago and since then has not updated their research on the business climate in Howard County.

Once a company commits to building a hotel, however, "there's not much you can do about it," said Novak. "If we did not feel thatCourtyard would be successful we would not have committed toit."

Coleen Riley, executive director of the Howard County Tourism Council, agreed that the Courtyard is entering a crowded market.

"The Courtyard is going directly for the business traveler, so they're going to be competing directly with the Columbia Inn, the ColumbiaHilton and Turf Valley," Riley said.

Edward A. Ely, the Rouse Co.executive responsible for Columbia's commercial land sales, said company executives could see two years ago that the market did not lend itself to developing a hotel that offered the same product as other area hotels.

He said the Homewood Suites hotel, approved by the Rouse Co., will not necessarily compete head-to-head with other county hotels because it aims for a different type of client.

The hotel, in the Columbia Restaurant Park at routes 108 and 175, is designed andpriced for longer stays and is unusual in both Columbia and the Baltimore area, Ely said.

"It is going after the relocating corporate executive who needs a hotel room for an extended period of time or the traveling business person who is staying for more than two or threenights in the Baltimore-Washington region."

Business development has attracted an array of more economical hotels, such as the Best Western in Dorsey, the Suisse Chalet and the Red Roof Inn in Jessup thelast three years.

While the newcomers can more easily weather thehard times, upper-end hotels such as the Hilton cost more to maintain and thus suffer more if the hotel business falls off, Stielper said.

"So many of these rooms were designed and built in the mid-80s" while business was booming," he said. "Once the money is sunk into them, it's too late to stop."

To help sell businesses on county lodgings, Riley is preparing a guide to all 31 hotels, motels and bed andbreakfasts in the county. It lists the amenities in and near the county's 11 hotels, 18 motels and two bed and breakfasts.

Part of theproblem, she said, is "convincing our businesses in the county that they should have their employees stay here instead of sending them toBaltimore or Washington," Riley said.

One way hotels can do that is market directly to meeting planners and convention planners, she said.

Stielper said that as recently as the mid-1980s, before the proliferation of downtown hotels, he used to get overflow from Baltimore, Washington and Annapolis.

"We would have people 30 and 40 at atime driving here from Annapolis from boat shows, RV shows, what have you." Baltimore conventions could fill up 50 or 60 rooms at a time,he added.

"Now the hotels in Baltimore can't fill themselves. Every week it seems like another hotel has gone bankrupt."

Despite its proximity to Interstate 95, the Holiday Inn gets "very few travelers," he said, because they tend to stay in cheaper hotels in Pennsylvania or Virginia.

But Harry Havens, who with his wife is resident manager of the Suisse Chalet in Jessup, said his hotel still fills up with travelers during bad weather.

The hotel, opened in June 1989,is operating at about 50 percent occupancy, which is "a little belowprojections," he said.

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