THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Monday, September 4, 1995 TAG: 9509020341
SECTION: BUSINESS WEEKLY PAGE: 04 EDITION: FINAL
COLUMN: Talk of the Town
LENGTH: Long : 142 lines
No one yet has fully measured the fall off of Canadian visitors this summer on the Virginia Beach Oceanfront, home to 5,000 hotel rooms on 42 blocks, but the city's hotel industry seems prepared to take the downturn in stride.
With the Canadian dollar diminished in value against the U.S. dollar, visitors from Ontario and Quebec have seen their buying power fall as much as 40 percent in the states. Many have remained north of the border.
The thinking now is the Canadian market, which accounts for one of every 10 tourists in peak years on the Oceanfront, will weigh in with a decrease of 10 percent or less. Continental Research Associates of Norfolk has been surveying the tourist trade for Virginia Beach. The results will be released in the next four to six weeks.
Despite the Canadian drop off and the tiny jolt to capacity - Tidewater Inn Management opened the 138-room Holiday Inn-Surfside, the first new hotel built in almost seven years on the Oceanfront - hotels sustained their occupancy rates and revenues, at least in the weeks prior to Hurricane Felix.
Hotel revenue totaled $18.32 million in June, nicely up 9.2 percent from June '94. Oceanfront hotel occupancy measured 77 percent in June, up from 72 percent in June '94. July did slump a bit: 90 percent this July, 92 percent last July.
June's uptick in revenue hasn't caused a clamoring ring for more hotel construction in Virginia Beach. Nor has July's downtick sent hoteliers scouting for Europeans to replace the absent Canadians.
``We're catering to a very large middle-class market in the United States that is underserved today because everybody is chasing the big buck casinos,'' said Thomas J. Lyons of Tidewater Inn Management in Virginia Beach.
Aiming for the American middle-class market rather than European tourists makes sense for Tidewater, Lyons said, in part because flights from Norfolk to Washington-Dulles have sometimes been served mainly by prop-driven craft, though tourists prefer jet airliners. What's more, most European tourists are on their first trip to the states. It's the second trip that will bring them to places like the Oceanfront.
``When you have the first surge of tourists, they're looking for the traditional attractions like New York and Washington,'' Lyons said. ``It's the second surge that leads them to the secondary markets like Virginia Beach. It's like Americans try Paris and Monte Carlo and on their second vacation in Europe they try the Provence region of France.''
Peninsula science: When the federal physics lab known as CEBAF got down to business last year in Newport News, officials figured it would attract a number of high-tech enterprises. They also figured out where to house the new ventures.
Rancorn Wildman Krause Brezinski, Newport News architects, have been designing a 118,000-square-foot office building. Plans call for construction next year near CEBAF in the 207-acre Applied Research Center, part of the Oyster Point district of Newport News.
About 100 CEBAF scientists and graduate students from three Tidewater schools - Christopher Newport University, Old Dominion University and the College of William and Mary - will occupy the bulk of the new building. About 20,000 square feet will be reserved for start up businesses, said Newport News economic director Paul Miller.
Incidentally, CEBAF stands for Continuous Electron Beam Accelerator Facility. It employs 500 and contains the world's most powerful microscopes for the study of nuclear matter.
Farm Fresh Inc. awarded its $3 million advertising account to Burford Co. Advertising of Richmond, replacing David Cravit & Assoc. of Chicago.``The market is changing. We need someone who can respond quickly,'' Farm Fresh president Michael Julian said.
The Norfolk supermarket chain operates more than 60 stores in Virginia, including about 45 in Tidewater, where grocers Harris-Teeter and Hannaford Bros. are entering the market. Burford had handled Farm Fresh advertising for the chain's Rack & Sack stores in Richmond.
Airport boardings: Down in Norfolk and Richmond in July, up in Newport News. Airlines boarded almost 123,000 travelers at Norfolk International Airport in July, down 28 percent from a year earlier. Richmond International Airport boarded 88,658 passengers in July, down 14.2 percent. Both airports attributed the decline to the same reason: Continental Airlines.
Continental scrapped its cheap Lite fares, which swelled boardings last year (and in Richmond, USAir and American Airlines both reduced flights this year). USAir also scaled back at Newport News/Williamsburg International Airport. Traffic still climbed 15 percent in July to about 36,000 boardings thanks to Atlanta discount carrier ValuJet's arrival on the Peninsula.
More no-frills fliers may land. Air South, a year-old airline in Columbia, S.C., is considering flights to Richmond, Norfolk and Washington-Dulles as well as Dayton, Cincinnati, Philadelphia and Allentown, Pa.
Speaking of ValueJet: 900 ValuJet employees received a smaller-than-anticipated bonus this month and a longer-than-expected explanation letter. While earnings at the expanding airline soared with the eagles, rising 86 percent between the first and second quarters, the money set aside for bonuses increased in sparrow proportions of 20 percent.
In a memo, personnel chief Louise Laughlin told the 900 head-scratchers: ``You may be. . . saying to yourself, `With the (passenger) loads we carried, I've never worked harder; yet, (if it is the case for you) my bonus check this time is smaller than it was the last time.' The answer is that our company can only succeed if our costs are kept in line and if our customers like us enough to come back again and again.''
Reinventing W&M: The College of William and Mary's MBA program was called most improved in the nation by the 1996 Princeton Review Guide to the Best Business Schools: ``Interviews and surveys of over 100 plus students turned up almost no complaints and mostly praise for the administration's successful efforts to reinvent the program,'' Princeton Review says.
Meanwhile, the administration at the 6,600-student Williamsburg school plans to abandon graduate programs in English, government, mathematics and sociology in '96. Faculty members now are looking for inventive means to scuttle the plan.
``We're going to try very hard to keep something going,'' said English department graduate program head Monica Potkay. ``We are exploring a lot of options. We're trying to find a possible audience.''
Mighty mites. ``This is not something you do because you've got a little problem,'' said insect expert D. Ames Herbert of the Tidewater Research Center in Suffolk. ``This is something you do in a real honest-to-goodness crisis situation.''
The crisis: Spider mites. They might destroy 30 percent of Virginia's peanut crop and cost growers $30 million. The solution: Capture. Virginia's Department of Agriculture and the U.S. Environmental Protection Agency agreed farmers can apply Capture, a chemical awaiting federal registration for use on peanuts.
Hampton Roads happenings: Letton Gooch Printers, a mainstay on Norfolk's Granby Street, moved to 700 W. 21st St. The new Norfolk plant contains 40,000 square feet of operating space to accommodate a new four-color press and electronic pre-press technology, marketing vice president Ted Belden said....
Chanello's Pizza of Virginia Beach, owner of 25 outlets, will open its first dine-in restaurant next month in Newport News. Chanello's owner Jerry Chanell bought the site of the former University Grille near Christopher Newport University....
One of 15 grants by Gov. George Allen's Virginia Enterprise Initiative went to Empowerment Resources Inc. in Norfolk. The non-profit agency provides loans and entrepreneurship training....
Factory Stores of America Inc. of Smithfield, N.C., plans to buy 13 factory outlet shopping centers from owner Public Employees Retirement System of Ohio and manager Charter Oak Group Ltd. Included in the package: Williamsburg Outlet Mall. The deal would make Factory Stores the nation's ranking discount mall owner. by CNB