Thursday, May 15, 2008

The Hotel Utica Is Singin' The Deadbeat Blues

Eight years on, the song remains the same at the Hotel Utica:

Mayor David Roefaro, unhappy that Hotel Utica is once again behind in its tax and loan payments, says it's time a solution be found for the hotel's continued failure to meet its financial obligations.

“We need to find a way out of it and help them,” Roefaro said late last week. He's meeting with hotel co-owners Joseph R. Carucci and Charles N. Gaetano Thursday to discuss options.

Utica's taxpayers have to help more? The multi-million dollar loan guarantee the city is giving the hotel isn't enough?

Hotel Utica is $215,260.77 behind in its taxes, having missed its Utica City School District tax payment in October, its Oneida County tax payment in January and a city tax payment last month.

Penalties are piling up on the missed payments. A review of tax bills indicates Hotel Utica owes about $18,500 in tax penalties - nearly the amount of the federal loan payment the hotel missed last month.

Hotel Utica failed to make its $21,000 federal loan payments on both April 1 and May 1, following 10 straight months of making payments on what initially was a $5 million loan from the U.S. Department of Housing and Urban Development.

Hotel co-owner Carucci said the hotel would catch up on its payments in the next few months.

“If you go back over the last several years, you'll find that we're always late,” Carucci said. “But we always pay them.”

If this were any other entity, either a private business or homeowner, this lackadaisical approach to making mortgage payments would have resulted in foreclosure or bankruptcy long ago. The only thing keeping the Hotel Utica in business is the continued goodwill of Utica's taxpayers, not to mention the continued use of city funds to make the hotel's mortgage payments. Funds that could be better used to fix a multitude of problems in the city, including the gigantic, tire-eating pothole just outside the Hotel's east entrance.

By now you might be questioning just how viable the hotel is as a going concern. Good, because I think the OD's story glosses over the most important fact in the whole article:

Hotel Utica in 2006 became affiliated with the Clarion national chain — a move Carucci said has helped the hotel. The occupancy rate is still at about 70 percent, he said, noting it hasn't increased from last year's figure.

“We're hoping this summer it'll perk up,” Carucci said.

The hotel certainly has its busy nights. Two charter buses were parked outside the hotel Tuesday night, and the lobby was filled with activity. Guests with rolling luggage were headed to the elevator. People were seen along the grand staircase. Patrons were dining in the Lamplighter Lounge and socializing at the bar.

What an interesting contrast. By any objective standard the Hotel Utica is in desperate financial straits, as it's inability to make regular tax and mortgage payments would clearly demonstrate. Business must be terrible, right?

Actually, no. If the given figure of a 70% occupancy rate is true the Hotel Utica is doing some boffo business. In fact, based on numbers from the American Hotel and Lodging Association, it's occupancy rate is well above average. Here are the latest figures for the hotel industry as a whole:

At-a-Glance Statistical Figures

4,389,443 guestrooms
$133.4 billion in sales
$61.93 revenue per available room (RevPAR)
63.3% average occupancy rate

The average room rate was $97.78 in 2006—up from $90.88 in 2005.

A quick check of Travelocity shows that the weekday rate at the Hotel Utica is $99.99 while the weekend rate is $149.99.

That means both the hotel's standard room price and occupancy rate is well above the industry average, which would seem to be exactly what you want for a thriving hotel.

Yet, somehow, the Hotel Utica is far from thriving.

Anyone care to hazard a guess as to what's *really* going on?