Developer meets success with Westport Inn project

Real Estate Weekly, Oct 3, 2001 by Sam Klein

Every business undertaking involves challenges that are unique to it -- whether it's launching a new product or breathing new life into a dated one. Over the years, we've found that there is no on key to overcoming these challenges: It takes hard work, exhaustive research, key people and timing. Our suburban hotel projects have borne fruit to a large degree because we are willing to invest capital, take risks and seize the moment hen we find a promising opportunity.

Suburban hotels provide an excellent litmus test for the state of the economy. Our weeknight occupancy rates reflect the level of business travel throughout New York's suburbs, and our weekend rates show that people are still willing to spend their hard-earned money on a pampering visit to the country.

As our firm has grown in recent years, we've had the luxury of building hotels from the ground up -- but it wasn't always that way. Two of Fairchild Properties' most noted hotel successes have involved older properties whose time ha seemingly passed. Both hotels had all the ingredients for success save for an innovative management strategy and ownership that was prepared to invest in their fixtures.

In 1998, we bought a controlling interest in the Westport Inn, a 116-room hotel in a dynamic location that wasn't reaching its potential. Westport, in eastern Fairfield County, is today what Cape Cod was to our parents' generation -- the quiet New England town that beckons to both tourists and social register types. Westport offers close proximity to everything a weekend traveler would want: New York City, the Long Island Sound, celebrities and great shopping.

As terrific as the location is, other factors reinforced our decision to purchase the Westport Inn. For starters, Westport doesn't offer many developable, parcels, so we knew the odds of a competing hotel popping up somewhere down the road were nominal. Second, the hotel as past due for a facelift, both physically and in its overall management strategy. Even the restaurant was losing $400,000 per year. We saw that the Westport Inn ad nowhere to go but up.

We knew the key to success was going to be turning it around as quickly and as quietly as possible. If we were going to continue to attract tourists, we ha to give our customers a colonial New England experience while exercising some Yankee restraint in our spending. By sharing services with our other regional hot I properties, we could give our customers the amenities they were looking for while maximizing the return on our investment.

When we took over, the inn's two buildings -- a 76-room main hotel, and a 40-room deluxe atrium hotel -- hadn't seen any physical improvements in several years. The rooms had old carpeting, no wallpaper, closets without doors... It was a textbook case of a diamond in need of polishing. So we gutted the rooms, literally. We installed new bathrooms, tore out the closets and went "first cabin" on new carpeting, bed spreads and curtains, which were all custom made. We upgraded the heating and cooling systems throughout -- which in the long has saved us a fortune. When this was done, we had a product we felt good about charging $130 and up per night.

Then we hired a sales staff to go out and bring us the weddings, bar mitzvahs and family receptions that the inn had never really attracted because it had never really pursued. We sent our sales staff and materials out to churches, photographers, gown people and wedding trade shows, etc. and followed it up with targeted advertising. The restaurant that was hemorrhaging cash was replaced by one owned by a local restaurateur whose establishment in Norwalk is rated among the best in the state.

The Westport Inn has one advantage over most other hotels: No two rooms are exactly alike, be it in size or shape or design. We've taken advantage of that by furnishing the rooms individually. We are deeply gratified when a repeat customer 'calls and says, "... And we'd like room 114 again..."

For the Westport Inn, the payoff has been immediate. In the three years since we acquired the hotel, we've seen positive returns on the investment and are bullish on the future.

In Southbury, a small town nearby, the challenges were different. We bought a 198-room hotel in 1996 that was barely staying afloat. Southbury offered no shortage of opportunities for a business hotel, but this one hadn't taken

advantage of them. Southbury, besides being a home to such corporations as IBM and 'Uniroyal, is very close to Waterbury, a small city with several regional corporations. The demand was there for a good hotel, and we set out to provide it.

We believed the market would be best served by something upscale, so we signed on with Hilton - both to lend the property some needed cache and to take advantage of that chain's superior reservations system. Of course, Hilton is a brand name that people associate with both efficiency and comfort, and we welcomed the challenge to produce.

The hotel had a great location, so we were convinced the hotel would succeed if we could provide it with focused leadership. Since we were going to proudly Wave the Hilton flag, we decided the best course would be to operate it the Hilton way.