July 29, 2014 in Business, City

Ex-tourism agency leader questions Grand Hotel Spokane’s ‘demand generator’ potential

By The Spokesman-Review
 

The former president of Spokane’s tourism promotion agency says the new Walt Worthy hotel downtown lacks the brand-name recognition needed to attract significant new bookings for conventions and meetings.

Harry Sladich, who headed the former Spokane Convention and Visitors Bureau and now is an executive at Red Lion Hotels, said Marriott’s Autograph Collection brand is not as widely known as the Marriott, Hyatt or Hilton names. Because of that, he believes the Grand Hotel Spokane could have trouble meeting expectations for room bookings in the future.

Sladich is executive vice president of hotel operations and sales for Spokane-based Red Lion. He said he’s directed his concerns to a number of officials, including the managing director of Walt and Karen Worthy’s hotel company and the head of the Spokane Public Facilities District, which owns and operates the Spokane Convention Center, INB Performing Arts Center and the Arena.

The PFD sold the property to develop the Grand Hotel to the Worthys, who also own the Davenport Hotel and Tower and the Hotel Lusso here.

“The bottom line is we needed a ‘demand generator’ and we simply did not get one,” Sladich said of the Autograph brand.

“Meeting planners are simply unaware of what the Autograph Collection is,” he said.

Walt Worthy said he regards the Autograph Collection as the fastest-growing brand in the country.

Before choosing that brand, the Worthys met with representatives of the larger brands, including Hyatt and Hilton hotels, he said. As a member of a global brand the Worthys will pay a fraction of their room fees to the host company, Marriott. How much that payment is usually not disclosed.

“We ended up trying to position our hotel going forward so that it will be with the top brand over the next several years. We think that’s the Autograph Collection,” Worthy said.

The Autograph Collection brand was launched in 2010 as a subsidiary within the Marriott group, which also includes JW Marriott Hotels and the Renaissance Hotels group.

The 15-story downtown hotel, being built for an estimated $134 million, will easily be the biggest in Spokane. It’s expected to include an estimated $1.5 million taxpayer-financed skywalk connecting to the Spokane Convention Center across Spokane Falls Boulevard.

Tourism promoters and Spokane business people have said the size of the hotel and its location are critical to attracting more conventions and business meetings, which in turn fuel hotel stays, restaurant meals and downtown jobs.

Sladich said he took his concerns to Kevin Twohig, CEO of the Public Facilities District, in April. Sladich said Twohig told him he didn’t originally realize the difference between the Marriott brand and the Autograph Collection.

Twohig added that he’s satisfied with the Worthys’ selection and he thinks the decision was a good one.

“I feel confident in Walt’s decision,” Twohig said. “It’s his money,” he added.

Sladich, however, contends the Autograph Collection brand is too fuzzy and not high-powered enough to generate many big-ticket conventions.

The hotel’s impact depends on meeting planners across the country knowing that the big downtown hotel – with 716 new rooms when completed next year – is part of the large, international Marriott chain.

That might be a challenge, he added, because the Autograph Collection has largely been marketed as an independent group of franchised hotels, not large convention center facilities.

Meeting planners work both within hotel chains and as independent bookers, arranging convention locations across the country for national groups and associations.

Sladich said he knows people in the tourism business in town will call him a malcontent. “I really want to do what I can to see (the convention center hotel) succeed,” he said. “I hope I’m completely wrong,” he added.

He said he decided to publicly share his concerns so that future similar decisions are handled differently, with the PFD recognizing it may need more input for the benefit of the community.

“The next time the PFD goes through this kind of process, maybe they’ll decide to be more collaborative and seek more input and consider it,” he said.

Sladich said he didn’t want to be accused of Monday-morning quarterbacking. “I know this is a done deal,” he said. But if the hotel doesn’t generate expected results in five years, he doesn’t want the blame to rest on Visit Spokane, the successor organization to the Convention and Visitors Bureau.

Worthy said the Cosmopolitan Hotel, one of the largest in Las Vegas, is now an Autograph hotel. So too is the 3,400-room Atlantis, Paradise Island hotel and resort in the Bahamas.

“We are looking forward to the next 20 years, not necessarily over just the next three or four years,” he said.

So far the Autograph Collection has roughly 35 U.S. locations, according to the Marriott website. Fifteen of those are in Florida.

Worthy also said the vastly popular Marriott guest loyalty program includes all the Autograph hotels. Plus, he’s been assured that Marriott’s marketing teams will treat the Grand Hotel as a Marriott location, despite the building not carrying the big red “M” logo on the building’s outside walls.

Sladich said he has no objections to how the Worthys made their selection of affiliation. However, Sladich said the Public Facilities District failed to seek out experts on the hotel business before signing the contract that allowed the Worthys to buy the downtown land on which the building and its 900-stall parking lot will sit.

If the PFD had done that, the group might have worked harder to require the Worthys to put a major brand on the new hotel, Sladich said.

A part of the developer’s agreement, signed by the Worthys with the facilities district, stated the hotel would be branded with a premium brand “four diamond”-level company. That contract then listed possible choices, including the names “Marriott, Hilton or Hyatt.”

That same contract, Sladich added, had another clause that would have allowed the Worthys to pay a penalty fee to the PFD if they decided they wanted to not have a brand affiliation at all.

Cheryl Kilday, president and CEO of Visit Spokane, echoed Worthy’s view that the Marriott group and meeting planners will know and widely publicize the fact that the convention center hotel is a Marriott property.

Earlier this year, Kilday sent out a survey to more than two dozen meeting planners across the country, all of them familiar with Spokane. That is done routinely to help get their feedback on marketing strategies, she said.

When asked to rank a number of hotel brands as their favorites, the Autograph Collection got the most No. 1 votes, Kilday said.


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