A check-in of the area’s new hotels reveals modern amenities—and a hope for higher occupancy.
October/November 2016
By MARY WADE BURNSIDE
MORGANTOWN MAGAZINE
It used to be, when the motorcyclists rolled and rumbled into Morgantown for the 10-year-old West Virginia MountainFest, visiting riders might have had to seek shelter at night at a hotel in another town. “Typically, every room is full, not just Morgantown—Fairmont, Bridgeport, Clarksburg, Waynesburg, Preston County, too,” says Cliff Sutherland, the festival’s president. Not this year, though. During the event’s late July run, not even the hotels in Morgantown maxed out.
In a way, that was a good thing, a situation alleviated by two hotels that opened in the past year just down the road from MountainFest’s Mylan Park headquarters—La Quinta Inn & Suites Morgantown and Candlewood Suites Morgantown, both in The Gateway, which is anchored by Sutherland’s Triple S Harley-Davidson. But those were not the only two hotels that entered the Morgantown landscape in recent months. Between November 2015 and April 2016, four hotels, also including the Holiday Inn Morgantown–University Area and Courtyard by Marriott Morgantown, plus the two at The Gateway, have added 474 more rooms for travelers looking for places to lay their heads at night as well as other amenities and comforts that today’s discerning consumer seeks out. That brings the total of rooms in Mon and Preston counties to 2,767, a 17 percent increase.
However, just around the launch of the first hotel, the Holiday Inn, a drop-off in the oil and gas industry meant there were fewer field workers—who had been a key target at Candlewood Suites and La Quinta—needing rooms. That, plus the addition of four hotels around the same time, caused a drop in occupancy that surprised members of the industry. “At Candlewood, the best occupancy rate we’ve seen is 40 percent,” says Rich Robinson, regional manager for the Morgantown-based Double J Development that built the hotel. “The ramp-up has been really slow.” Notes James Fair, general manager of La Quinta Inn: “We are not hitting projections that were anticipated by ownership, but we are staying competitive within our market. I would say we are hurting slightly, but it’s nothing we can’t bounce back from.”
By the Numbers
The addition of hotel rooms at the same time as a drop in demand has resulted in a nearly 50 percent decrease in occupancy rates in Morgantown for the first half of 2016, down 30.5 percent from last year, says Bobby Bowers, senior vice president of operations at Nashville-based Smith Travel Research (STR), which tracks hotel performance and calculates the subscription-based STAR Report. “So that’s a huge drop,” Bowers says. “The occupancy rates have been horrible. They’ve been crushed. My guess is that there is a lot of supply, and growth is way, way down.”
The lack of “heads on beds” also means that the revenue per available room, or RPA, has dipped 32.8 percent, Bowers says. All of this presents challenges to the Greater Morgantown Convention and Visitors Bureau, which is funded by the 6 percent hotel/motel tax that the organization splits with either a municipality or the county, depending on whether the hotel falls within a city’s limits or not.
In 2014, the tax provided a $1.343 million budget for the CVB; in 2015, it dropped slightly to $1.339 million. Gauging by the first nine months of 2016, when the CVB had collected almost $750,00, that figure appears to be on track to drop even further. “We project we will collect approximately $1 million in taxes by the end of the year,” says Tara Curtis, chair of the CVB’s board of directors. “We are definitely concerned about the drop-off in hotel/motel tax, and we are very proactive in adjusting to any changes to our situation as needed.”
Among the CVB’s tasks is to attract visitors to the Morgantown area, via promotion of existing attractions and businesses—WVU and the hospitals are two obvious targets—as well as to create and sponsor events that will help bring visitors to the area. Curtis points to Cabela’s King Kat Tournament and the recent Morgantown Marathon. Tourism is down statewide, notes Kay Fanok, the conference, meeting and group sales manager. However, she adds, Morgantown, with the obvious benefit of the university, and Preston County, with its outdoor recreational opportunities, are better positioned than most. “Morgantown and Preston counties are holding their own,” Fanok says. “There has been so much growth. I think they are going to see that it works out for everyone.”
Indeed, the Morgantown Area Economic Partnership (MAPs) boasts of $1.5 billion in construction currently underway in the area. Holly Childs, the president and CEO of MAPS, expects additional hotels to be built in the near future. “There were lots of hotels that built quickly,” Childs says, mentioning the interest in West Ridge Business Park and the new interstate exit. “It will take a little bit of correction and then I think it will go up. It will certainly rebound and there will be more hotels coming online. The hotel chains do their homework. There will be some additional hotels coming to the market because they know what’s coming.”
The location of each of the four new hotels makes them ideally suited for specific markets. La Quinta and Candlewood are just off exit 155 of Interstate 79. In addition to benefiting from events such as MountainFest, there also is the hope that a proposed aquatic and track center that, if greenlighted, could open as early as late 2018 at Mylan Park, will provide a new source of guests. A 2-minute drive from Mon General Hospital, the Holiday Inn not only gets business from that facility but also the nearby Morgantown campus for WVU Medicine, as well as the National Institute for Occupational Safety and Health (NIOSH) and, of course, Milan Puskar Stadium.
And the Courtyard by Marriott’s University Town Centre address not only affords great views of downtown Morgantown but also provides a natural place for visitors attending a West Virginia Black Bears baseball game or a WVU basketball game down Monongahela Boulevard at the Coliseum. Still, “We anticipated that our occupancy would grow faster than it did,” says general manager Ursula Myhalsky. “With the decrease in demand due to the decrease in oil and gas, that definitely impacted all of us. We expected to have higher occupancy. We’ve been open six months and it’s just not as fast as we would have liked.” However, the early September opening of the the new interchange off I-79, exit 153 on the west side of University Town Centre, has prompted more motorists to drive by the Courtyard by Marriott, Myhalsky says. “It’s easier to get here now and the exposure of people taking the exit—the awareness is just continuing to build.”
Looking Ahead to the Future
As the newer hotels get established, existing ones also have been impacted, not only by the downturn in oil and gas but also as visitors check out the area’s new offerings. However, Neil Buffington, general manager of the Waterfront Place Hotel in Morgantown, cannot gauge how the new landscape has affected his 207-room establishment. It has been purchased by Stonebridge Companies in Colorado and is being converted to the Morgantown Marriott at Waterfront Place, a branding effort that should be completed in early 2017 after a year of renovations that has automatically kept occupancy down. “Building more hotel rooms in our market is not going to create more demand, but we are confident in the product that we will be giving to customers, and in the Marriott brand. We are not overly concerned. Eventually, drivers like oil and gas will come back. We’re lucky to be in the tertiary market associated with the university and we’re all thankful for that.”
The rebranded hotel also has taken millennial consumers into consideration in the design phase and amenities offered, which Buffington believes will add to the hotel’s appeal. “Most travelers today travel with a minimum of three devices, so there will be connectivity ports throughout each room. They take showers, not baths, so you will see most of the inventory with new walk-in showers. And really, millennials don’t hang out in rooms. They drop off their bags and go. So there are not a lot of drawers. They don’t unpack, so there is a lot of open shelving.” La Quinta’s Fair notes that his hotel also was designed with the modern tourist in mind, including with the option of the walk-in shower. “I’m not sure if it’s more cost-efficient, but it adds a bit of extra quality to the bathroom.”
Then there is football season. The Big 12 has changed the way visitors stay at area hotels, says Cindy Coffindaffer Colasante, director of marketing and visitor services at the CVB. “Once we joined the Big 12, game nights changed and it changed the way fans stayed,” she says. The midday games have prompted more one-night stays instead of two-night stays. On the flip side, Colasante says, the change also has introduced the area to a new set of visitors who might come back as a tourist on a non-football weekend.
As football returned to Morgantown in September, hotel officials embraced the uptick in business that the four start-ups missed last season, with La Quinta’s Fair noting that the LED lighting that trims the lobby ceiling had been switched to blue and gold to greet Mountaineers fans. “We booked a very big number of rooms for the first football game,” he says. “We can only hope after the first game that a lot of people see us and know we are here and help drive occupancy for the rest of the season.” Robinson, of Candlewood, expressed skepticism even as his occupancy rates rose to their highest level. “There is not enough demand,” he says. “Hotels are saturated.”
But Sutherland remains optimistic that the hotels will weather the storm and then be in position to book more rooms, not only if the oil and gas industry returns, as many predict that it will, but also with all the other business going on in Morgantown—including, he hopes, the aquatic and track center that will be a hop, skip, and a shuttle ride from the two hotels at The Gateway. “It’s going to be a long two years, in my opinion, before the turnaround, but then I think you’ll see occupancy rates go pretty high.”