Developers sure area has hotel market

Published 12:59 am Sunday, October 7, 2007

NATCHEZ — It’s not easy to pinpoint the reason developers have decided the Miss-Lou needs 489 new hotel rooms, but it is easy to see that their mentality is a bit of “if you build them, they will come.”

A trend started by the Country Inn & Suites and the Hampton Inn on Canal Street more than a year ago picked up steam when Best Western and Holiday Inn threw their hard hats on the construction pile. Add the long-talked about renovations to the former Ramada Inn under the guidance of Emerald Star Casino, and the Natchez area will see five new hotels in about a year’s time.

That’s a 56-percent increase in hotels rooms from the current numbers. The current 12 hotels in Natchez and Vidalia combine to provide 871 hotel rooms. The new hotels will add another 489 to the area for a grand total of 1,360.

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But is there an actual demand for the nearly 500 new hotel rooms?

Sue Stedman with Crye-Leike Realtors thinks it’s possible. Travel is up, and the dollar is down.

An enormous amount of Baby-Boomers are about to retire, Stedman said.

“Research says they will travel a lot,” she said. “They drive around and are very mobile.”

While five new hotels sounds like a lot for an area the size of Natchez, Harsha Chacko, a professor at the University of New Orleans’ School of Hotel, Restaurant and Tourism Administration, said it makes sense.

“They have to have done research to come. No bank would lend money otherwise,” Chacko said. “Hotels are constantly looking for areas to expand their brands in.”

National trends

The types of hotels coming to Natchez are indicative of a nationwide trend in hotel building, said Stedman, who often sells commercial real estate. The industry is trending toward small to mid-size hotels averaging approximately 100 rooms each.

In addition, the travel industry is still on an upswing since Sept. 11, 2001.

“The (hotel) market is strong right now. Hotels all over the U.S. are at near record capacity,” said Jay Kirkpatrick of Sweet Magnolia Tours, based in Memphis and in business since 1991.

Currently, the U.S. dollar is equal to approximately two British pounds, Kirkpatrick said. That makes Americans more reluctant to go oversees, he said. Conversely, it brings a high concentration of seasoned European travelers to the United States.

Regional incentives

Country Inn & Suites developers Tom Bauer and Warren Reuther, both of New Orleans, decided to build the hotel after Bauer came to Natchez to escape Hurricane Katrina.

Bauer liked Natchez so much, he said, he insisted the pair look into developing a property in the city.

The hurricane helped in other ways, too. The Gulf Opportunity Zone, legislation that provides economic incentives to businesses who build in hurricane-affected areas, played a big part in their decision to build, Bauer said.

“The hurricane made this possible,” Bauer said “We needed the (legislation) to make this particular deal work.”

The GO Zone got the ball rolling, Bauer said, and it just didn’t stop.

Reuther said he thought the Country Inn & Suites, paired with the convention center, played a part in attracting the other four new hotels.

“Maybe people are beginning to discover Natchez,” Reuther said. “I think we played a part in that. Natchez needed a group that knows how to come in and market, and we want to be a part of that.”

A climbing economy was what caught Hampton Inn and Holiday Inn developer Dr. Shailesh Vora’s attention.

Vora, who lives in Arkansas, is so confident in the local economy, he is building the Hampton on Canal Street in Natchez and the Holiday Inn on the Vidalia Riverfront.

“You guys needed a better (hotel) product than what you have,” Vora said. “You needed more options.”

Two conference centers and two proposed new casinos will bring even more people to town, he said.

Baxter Lee, the marketing director for one of those casinos — Emerald Star, said he sees other incentives in Natchez.

“Personally, I think the completion of the highway infrastructure, where you’ve got nice access north, south, east and west of Natchez, and four-laning the highways has made it easier for people to get to town that it used to be.”

Better tourism marketing and more conventions also makes this an ideal time and place to build a hotel, he said.

Even though casino customers will stay at the hotel, it will still be competing for customers, but Lee said his company isn’t worried about finding them.

“The increase in room numbers and the increase in marketing is going to attract more people to Natchez,” Lee said. “If you bring more people to Natchez, everybody wins.”

Making it work

Tourism officials agree — if the Miss-Lou is going to support its current hotel boom, the area is going to have to be very aggressive in its marketing.

Just north on the river, Vicksburg is a very similar market to Natchez, Vicksburg Convention and Visitor’s Bureau Executive Director Bill Seratt said.

“We’re on I-20, but other than that (Vicksburg) is identical to Natchez,” Seratt said. “We can’t live only on tourism. We, as small markets, have to specialize in travel and do the best meetings around.”

That means small markets like Natchez have to sell themselves as a cultural package to attract conventions and other meetings to the area, Seratt said.

“Small areas have to be the best boutique markets to attract those kinds of meetings,” he said. “You need someone to properly market the sublime southern heritage of Natchez.”

Larger Charleston, S.C., Convention and Visitor’s Bureau Deputy Director Perrin Lawon said that historic city’s 14,000 hotel rooms run at about 70 percent occupancy.

Tourism is important, Lawson said, but it’s not everything. Charleston also supports its hotels with a diversified economy, which includes several colleges and universities, a large military presence and a national port.

“Tourism is huge, and it’s a big reason people come here, but there’s a lot of business travel,” he said.

Natchez won’t become the size of Charleston overnight, but Natchez Tourism Director Walter Tipton said the area has its own booms coming.

The construction of the prison on U.S. 61 North and the potential Rentech construction will initially bring hotel business to the area, Tipton said.

The Alcorn School of Nursing and having a federal courthouse located in Natchez will also bring some hotel traffic, Tipton said.

Another factor that just opened up is the finishing of the four-laning of Louisiana 15, he said.

“Traffic conditions are in our favor,” he said. “There is now a corridor from north Louisiana to Baton Rouge, and that certainly helps bring some business here.”

More marketing will bring more people, Reuther said. And more people will need a place to sleep.

With the historic buildings and locations, the river and shopping, it would only take marketing to make Natchez a destination, he said.

“Natchez has everything people want to see,” he said. “It’s got something unique and different.”