With Riverhead hotel boom in full swing, what about the little guy?

09/29/2011 4:37 AM |
bed and breakfasts

BARBARAELLEN KOCH PHOTO | Lee Browning, a principal of Browning Hotel Properties, in the lobby of the Hilton Garden Inn on Route 58 in Riverhead promoting the hotel's wine tasting tours and packages.

Weddings and wineries have helped spark a small explosion in the number of hotels on the North Fork over the last decade, especially in Riverhead Town. But what does that mean for local bed & breakfasts?

And when is enough enough?

The market is close to saturation, according to Lee Browning, owner of Route 58’s Hilton Garden Inn. But that isn’t stopping Mr. Browning, of Browning Hotel Enterprises, from building a 140-room Marriott Residence Inn next door to his Hilton.

He’s facing competition from the new Hyatt Place East End and the recently renovated, 1970s-inspired Hotel Indigo East End.

“Once you put in 140 rooms [at the Marriott], I think that’s all the area can handle, unless you have new demand-generators,” Mr. Browning said. “Then, all you do is lower occupancy when you build more hotels.”

A demand-generator — hotel speak for a new source of business — could mean an influx of corporate visitors from local firms staying at the Marriott or Hilton, Mr. Browning said. His Hilton attracts about 80 percent leisure guests, out-of-towners mainly looking to sip reds along the wine trail, and 20 percent corporate visitors, he said.

Mr. Browning does not plan to open the doors to the Marriott until 2013, hoping that by then the economy will be stronger, further increasing demand for hotel rooms in Riverhead.

Hyatt Place East End co-owner Jim Bissett said studies he completed show that the market became saturated once his 100-room hotel opened July 1. Many weekends have been sold out at the Hyatt, he said, adding that the Long Island Aquarium and Exhibition Center next door on East Main Street helps bring in overnight guests from New York City.

“I’m not worried about it,” Mr. Bissett said of Mr. Browning’s Marriott venture. “We’ve got eight million people 60 miles away.”

Mr. Bissett said he already has 150 weddings lined up for next year, plus other events including bar and bat mitzvahs and fundraisers.

A sign of market saturation is midweek and off-season price slashing, said Mr. Browning, who also owns the Marriott Courtyard in Ronkonkoma and another in Albany.
“When they cut rates, it means a hotel can’t reinvest in itself, and then you’ve got a rundown looking hotel,” Mr. Browning said.

For him, rates are not as important as amenities — which explains why he’s investing $100,000 in a new beauty salon and spa at the Hilton, a luxury he thinks customers will pay for. The Marriott will offer similar services, he said.

The Riverhead hotels all posted comparable room prices for a midweek reservation for one person in January, according to an online search conducted last week. Rates at the Hilton ranged from $135 to $163. Indigo East End on West Main Street offered rooms from $129 to $204, while the Hyatt’s rooms were priced at $129 to $159, though that chain also offers more expensive options that include wine and tickets to the aquarium.

Prices are higher at North Fork bed and breakfasts, which are fighting the new neon signs along Route 58 for their piece of the hospitality pie.

“What it’s done is taken away our wedding business,” said Marilyn Marks, owner of Shorecrest Bed and Breakfast in Southold, who is also president of the North Fork Bed and Breakfast Association. Her rooms go for upwards of $225 per night in season, according to her website.

Before the proliferation of Riverhead hotels, wedding guests had Ms. Marks’ five rooms all booked up to six months in advance.

That has changed, but Ms. Marks said she still has a steady flow of business. She’s adapted to the new hotel landscape by stepping up her Internet marketing campaign and using search engine optimization and social media including Trip Advisor.

Two other North Fork bed and breakfasts, the Sannino Bella Vita Vineyard and Bed and Breakfast in Cutchogue and the Bego Ezair Hotel-Gallery in Greenport, welcome competition on the theory that a rising tide lifts all ships.

“If they do well, we all do well,” said Lisa Sannino.

She and her husband plan to expand what is now only a one-bedroom operation to encompass their entire house. Their current room, which goes for between $250 and $350 per night, is booked through December, she said.

The Bego Ezair Hotel-Gallery stands out from establishments offering spas or quaint, traditional architecture and décor by immersing guests in modern artwork, said owner Marijana Bego. Giant canvases hang in each of the nine rooms, while the downstairs of the historic building features a spinning steel sculpture, paintings and a café.

Ms. Bego opened her hotel to private parties this summer and will welcome the general public next summer. Rates will be set at around $180 per night, she said.

The Hotel Indigo East End felt the sting of competition this past summer, their first operating under the InterContintal Hotels Group Chain rather than Best Western. General manager Kevin Zanfardino reported a “good, not great” season.

Mr. Zanfardino attributed that to new competition brought by the Hyatt. The Indigo is trying to compete by featuring Bistro 72, their upscale restaurant, comedy nights and live music.
Despite the crowded hospitality market, Mr. Browning has confidence in his new venture and anticipates laying the Marriott’s foundation later this fall. His business plan underwent rigorous corporate scrutiny before being approved.

“Marriott and Hilton don’t have failures,” Mr. Browning said.

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