ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Friday, April 5, 1996 TAG: 9604050086
SECTION: BUSINESS PAGE: B-8 EDITION: METRO
SOURCE: MAG POFF STAFF WRITER
Downtown Roanoke's Patrick Henry Hotel faces the possibility of closing because of declining tourism and convention business, the facility's manager said Thursday.
"All full-service hotels in Roanoke are in danger," William Carder said.
Also, the hotel has dropped its affiliation with the Radisson chain after a four-year trial and signed with a less-expensive reservations service, he said.
Officials in the valley should feel "a sense of urgency" in promoting conventions and tourism, Carder said. The opening of Hotel Roanoke a year ago this week increased upscale hotel rooms in the valley by 36 percent at the same time that the travel pie was shrinking, he said.
The number of visitors to the valley fell 8 percent in December compared to a year earlier, Carder said, and the first quarter will prove even worse when figures are compiled. He said there has been a decline in the number of visitors to the region since a peak in 1994.
"It's bad news," he said, "a very scary sign." Carder declined to give his hotel's occupancy or revenue figures.
The Roanoke Valley Convention and Visitors Bureau, which compiles regional travel and tourism statistics, confirmed leisure travel was off by 4 percent last year, but came after six years resulting in growth of 16 to 18 percent.
That momentum could not be sustained, said Martha Mackey, the bureau's director.
Both leisure and corporate travel were down during the first quarter because of repeated heavy snowstorms, Mackey said.
But convention business is up, she added, because conventions are planned years in advance. The valley is only now coming into the convention season, however.
Mackey said the bureau is committed to new activities. One example is group bus tours, which went from 14 in 1994 to 71 last year. Each bus brought in 24 to 48 people.
Also, she expects traffic on Interstate 81 to increase 33 to 38 percent this summer because of the Olympic games in Atlanta. The bureau has just contracted for two billboards along the highway to advertise attractions in the valley.
Roanoke is also participating in the state's tourism computer page on the Internet.
Avoiding comment directly on the Patrick Henry's current problems, Mackey said when a new hotel opens, other facilities feel an immediate drop in leisure business because people flock to the new hotel.
Hotel Roanoke is a new property, Mackey said, and thus it attracts a lot of business. She said the opening of Hotel Roanoke and the pedestrian bridge linking it with the Roanoke City Market have had a positive impact on downtown.
She noted that the leisure travel pie might be sliced even thinner because two hotels are under construction in Salem and a third is preparing to open in Troutville.
Carder said the Patrick Henry canceled its affiliation with the Radisson Hotels Worldwide chain for three reasons, even though "it's a good company."
Primarily, he said, the chain affiliation did not produce enough new business to justify the cost. He said it accounted for 10 percent of sales, but this was not enough to offset the expense.
Most guests, he said, come through such downtown businesses as Carilion Health System, Norfolk Southern Corp. and American Electric Power Co. And most local people call the hotel the Patrick Henry anyway.
The second reason was the decline in the overall travel market in the Roanoke Valley, he said. Finally, there was a need to cut costs because of the decline in revenue.
The Patrick Henry has aligned itself with Lexington Services of Texas at minimal cost, Carder said. Lexington Services operates a nationwide reservation system that lists the hotel on the screens of travel agents when they inquire about Roanoke.
"I believe we will benefit more" by using Lexington Services compared to the Radisson, Carder said.
The hotel opened Nov. 10, 1925, and was expanded in 1931. It was extensively remodeled in the late 1960s.
The Patrick Henry was purchased for $3 million in 1990 by Affirmative Equities Inc. of New York, which specializes in renovation of historic properties. The company spent another $1 million in a second remodeling.
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