It sure is a tough time for classic hotels. The recession is proving to be a traumatic obstacle—one that some grand dame hotels are finding impossible to overcome.
Escalating costs and fewer travelers are putting independent hotels in a bind. When those hotels are 70, 80 or 90 years old, the problems are exacerbated.
The latest sad chapter comes from Cincinnati, Ohio, where the historic Vernon Manor Hotel closed its doors last week. Citing current market conditions as the reason for closing, owner Belvedere Corporation put to rest an 85-year-old hotel and put 100 people out of work. Belvedere owns more than 1,200 hotel rooms in the Cincinnati area, including the 561 rooms at the Hilton Cincinnati Netherland Plaza (an iconic hotel that was built in 1931).
True, the 177-room Vernon Manor had its ups and downs, and it wasn’t an ultra-luxurious property when it closed it doors. It offered rooms for about US$130 a night.
The company said it’s examining all options for the shuttered property. Cincinnati Mayor Mark Mallory—who reportedly stayed at the hotel for the last two nights it was open—has vowed to fight any effort to dismantle the building.
The hotel was built in 1924 and hosted a bevy of famous guests, including Presidents Lyndon B. Johnson and John F. Kennedy. The Beatles stayed at the hotel in 1966.
But perhaps one of the most endearing moments for the hotel came in 1988 when it was used in the movie “Rainman.” Dustin Hoffman’s character, Raymond Babbitt, repeatedly mentioned 400 Oak Street, the hotel’s address.
And while the news is better for The Greenbrier in White Sulphur Springs, West Virginia, its future is cloudy. After losing the backing of owner CSX Corporation, the resort filed for bankruptcy in March. The owners have a tentative deal in place to sell the 720-room resort to Marriott International for as much as US$130 million.
And while Marriott undoubtedly will take care of the historic property, The Greenbrier will lose a piece of its soul when it retires from the ranks of independent hotels—although Marriott has said the resort will continue to be called The Greenbrier. The resort has been a sought-after destination by the rich and famous since 1778. It houses a Cold War-era bunker that was built for Congress to hide in the event of a nuclear attack.
According to reports, the luxury resort has lost US$90 million during the past five years—and the abrupt decline of business for most luxury hotels beginning in mid-2008 proved to be the final dagger in the old girl’s heart. Reports also indicate the hotel is as much as US$500 million in debt.
The hotel has been on the market for the past 18 months. Depending on which rumor mill was turning, potential suitors included MGM Mirage and Gaylord Hotels & Resorts.
There are grand hotels that will survive this economic crisis: The Broadmoor in Colorado Springs, Colorado; The Grand Hotel on Mackinac Island, Michigan; and The Beverly Hills Hotel in Beverly Hills, California, are a few that come to mind. However, the fallout from the horrible economic conditions we’ve endured for the past six or seven months won’t be completely felt until the rebound comes and we catch our breath. Then, when we look back, we’ll realize how much hotel history was affected by this recession.
