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HOTELS & RESORTS
Friday, September 11, 2009
Honorable Mayor and Council Members:
The Dallas/ Fort Worth Marriott Solana Hotel and the Town of Westlake have enjoyed a
rewarding and mutually beneficial relationship over the past two decades. During these
difficult economic times, and to enhance the hotel's competitive status and maximize
the revenues for the hotel and the town of Westlake, I am writing this letter to share our
thoughts and suggestions,
® Transportation:
In order to impact the hotel occupancy significantly, the hotel needed to provide
transportation to the airport. Based on customer feedback for why we would lose a
piece of business, transportation was one of the common denominators. With the help
of Westlake funds, transportation became a reality at the end of the 2004 calendar year.
The benefits of having complimentary airport transportation are numerous. The hotel has
been able to achieve its results in 2005 and beyond in large part because of
transportation. It has helped to neutralize our competitive disadvantage and has given
us the opportunity to compete for additional business segments that in the past would
NOT consider our hotel without this featured amenity. These segments include, but are
not limited to, airline crews, corporate business training not located in the Solana
complex, individual travelers requiring access to shopping, entertainment, and restaurant
venues, and groups desiring to meet without incurring airport transportation cost for their
attendees. These segments are projected to contribute over $195K in occupancy tax
revenue for the town of Westlake in 2009.
The town funded the full cost of transportation in Marriott's 2004 and 2005 fiscal years.
The amount was $45K and $230k in 04/05 respectively. The town funded about $56k of
the cost, in Marriott's 2008 fiscal year. We continue to request this $56k minimum amount
per year of funding for both the 2009 and 2010 fiscal years which would be approved in
your 09/10 budget. This amount represents about 29% of the total transportation cost the
hotel incurs per year. The Town of Westlake support has been an integral part in
alleviating the transportation cost to the hotel and is relied upon to continue our vigorous
efforts in an extremely competitive marketplace.
• Recessionary Impact:
As we are all aware, the economy started to change in early 2008 and took a drastic
downfall in the 4th quarter of 2008. 2009 is an extremely dismal year in the hospitality
industry and consensus of analysts, including PKF and Smith Travel, project that 2010
RevPar will decline below the already dismal 09 levels.
Throughout this year we are experiencing many companies cutting back in travel for
recessionary reasons. Our tenants of The Solana Complex are no exception. In past
years, they have provided thousands of room nights and revenues to the hotel and city
through occupancy tax dollars. In 2009 we are projecting a decline of over 26% from
their 2008 production. This decline is matching the dismal trend that the hospitality
industry is witnessing within the business transient segment. The rates have also been
adversely impacted due to overall demand decrease.
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Drastic slips have also taken place within Leisure and Group segments. Group Business
Demand has seen a decrease of potential opportunities by 35% year over year. With this
decreased demand, the hotel has strategically secured airline crew and training business
to supplement the loss of occupancy from these other areas. As mentioned earlier,
transportation was the only way we were able to secure this business. In addition, to stay
competitive in this aggressive industry, the hotel must continuously go outside of
Westlake and the complex area to bring in new business; from other Texas cities to other
states, and even a few international programs. This is not an easily affordable task which
is why we are requesting an incentive plan with funds provided by the Town of Westlake
to help give us the competitive edge when we are neck to neck with our competition in
securing a piece of business. Our wins will always translate to new and additional income
to the Town of Westlake in the form of occupancy tax.
® Recommendations:
As you are aware, a portion of the collected 7% occupancy tax is required by law to be
spent on promoting travel and tourism to Westlake,TX. It is generally acknowledged that
use of hotel tax dollars to promote tourism provide a large return. Some estimates have
for every dollar spent on tourism promotion- a return of nine dollars comes back to the
city in the form of occupancy tax, retail, restaurants, etc therefore we propose a few
considerations:
I Marketing efforts. This can include creating a short city promotional video
including the hotels and major attractions. It can also include purchasing
cd's, thumb drives, e-blast, etc. It can also include the purchase of air time
with radio and television stations.These efforts need to be ongoing and their
results are hard to quantify.
2. Hiring of a dedicated tourism and convention sales person or teams.These
persons would travel to events where group meeting planners, sports event
planners, corporate meeting planners, etc. convene. They network, give out
marketing materials, as well as showcase the city and their hotels, meeting
space, cultural venues, art and other attractions.
3. Group Incentive Funds. These are dollars that can be used as a rebate to
groups that bring their convention or meetings to the local hotel. Rebate
would be off the total amount of the bill and thus can be used by the group
to cover transportation, food and beverage, hotel rooms, entertainment,
event tickets, etc. or simply reduce the overall cost of the program.
We do feel the best option would be #3 the Business Group Incentive in having the
highest ROL Year to Date we have lost a potential of 13,033 room nights to other
locations within the Dallas/Fort Worth metroplex at competing hotels. This would equate
to $1,828,224 room revenue and estimating $127,975 (7% occupancy tax) the Town of
Westlake could have received. The incentive would have been a competitive
advantage to aid in bringing the business to Westlake.
Being the only hotel in the township we understand that we do not have the luxury of a
Convention and Visitor's Bureau (CVB) to assist in finding new business and shoulder the
cost of uncovering new leads. Our aggressive sales team plays the role of being the
Welcoming CVB of Westlake, TX to potential customers. This year alone we have traveled
to Trade shows from Toronto, Canada to Washington, DC, New York, NY, Orlando, FL,
Phoenix, AZ, and Austin, TX. Each time one of my sales managers returns we continually
hear "What CVB do you belong to?" Many of these trade shows are well represented by
other hotels' Convention and Visitors Bureau who not only burden a good portion of the
costs, but also assist in finding business to bring to their cities. in essence, a CVB has
additional sales professionals who solely sell the city as a premier destination and
represents the hotels as a perfect location to have meetings and conventions. It is
unreasonable for us to ask for the creation of a Westlake CVB, but it is reasonable to ask
for a reinvestment of a portion of the occupancy tax as the hotel finds it increasingly
difficult to solely continue shouldering 100%of the associated cost.
We are under no illusion in these trying economic times that tax dollars are Suffering
unprecedented declines. However, we strongly believe that returns on these investments
(transportation and group rebates) are tangible and immediate.
It is with the spirit and the conviction that the hotel and the town's success are
intertwined that we request you honor our recommendations. Our objective is to insure
we are continually representing the Town of Westlake and uncovering all opportunities
benefiting the hotel and the Town of Westlake.
Respectfully,
Nour Laasd
General Manager
Marriott Solana Hotel