March 31, 2009

Statler Hotel Sees Fewer Guests in Recession

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Few may have noticed, but in one of the many attempts to trim budgets, specially arranged flowers no longer grace the entrance of the Statler Hotel, the School of Hotel Administration’s teaching hotel.
Hotel occupancy in the United States in Feb. 2009 has fallen by 10.1 percent when compared to the same month a year ago, according to the latest data released by Smith Travel Research, a leading lodging industry research company that also has a partnership with Cornell’s Center or Hospitality Research.
Despite its relatively remote location in Ithaca, Statler Hotel has felt the ripples from the global financial storm. The hotel, which employs approximately 200 Hotel School students and 120 staff, has seen a general decline in its room occupancy from over 75 percent to about 70 percent, according to General Manager Richard Adie ’75.
“It’s concerning, but not devastating,” Adie said.
Companies that visit Cornell to recruit on campus, for example, usually provide at least 15 percent of Statler’s business. In recent months, however, the number of such companies utilizing Statler’s services has declined by 50 to 60 percent.

[img_assist|nid=36410|title=Looking emptier|desc=A hotel guest relaxes in the lobby of the Statler Hotel yesterday. Recent budget cuts have reduced decorations in the hotel lobby.|link=node|align=left|width=|height=0]

Apart from a fall in room occupancy, Statler’s other main revenue sources — restaurants and catering services — have also seen fewer customers.
“We are reacting to the changes in business in the hotel industry. Our revenue is impacted because of the global economic downturn,” Adie said.
While the Hotel School is obliged to comply with University-wide cuts and trim its budget by 4.8 percent, Adie is confident that the Statler Hotel will be able to “meet that goal, if not exceed it.”
Although Statler runs as an enterprise and manages its own revenue and expense budgets, it does not operate independently from the Hotel School, according to Adie. Apart from Adie, the Hotel School’s Dean Michael Johnson and Associate Dean for Business Affairs David Strong are also involved in making Statler’s budget decisions.
Statler’s revenue and cost amount to approximately a quarter of the Hotel School’s revenue and expenses respectively. It is also subsidized by the Hotel School, according to Johnson.
“It’s expensive to run a hotel in the middle of a university campus, and as a result, even though it is very well-run it has to be subsidized,” Johnson said.
He added that Statler “has already undergone significant staff cuts as a business enterprise.”
Adie admitted that the hotel saw three permanent layoffs at the beginning of 2009, including one director-level staff member. Although the hotel is not planning any further layoff at the moment, Adie has reservations about future staff adjustments based on the hotel’s aim to achieve maximum efficiency.
“Our goal is to give some employees as much work as possible … we understand that this is their livelihood,” Adie said. For example, a couple of hotel staff helped to perform administrative tasks in the University’s Admissions Office when it needed more manpower in the previous months.
Despite the gloomy financial conditions, Adie said that Statler’s occupancy rate is about 20 percent higher than the general rate in Ithaca. The hotel’s location on campus continues to attract group bookings and those visiting Cornell students. Its facilities, such as a ballroom and an amphitheater, also provide it with an edge over its competitors in the area.
Adie also stressed that seasonal fluctuations are common in the hotel industry. Although Statler has seen a few quiet months since December, the occupancy rate at the hotel has risen to about 75 percent recently as more prospective students visit the campus.
Apart from its 120 staff, Statler also employs approximately 200 part time students, who are responsible for about 90 percent of the Hotel’s jobs. Although some students are working fewer hours now, the hotel is currently hiring more students to work during the busy summer season, when graduation and reunions are held.
Apart from serving as a laboratory for all Hotel students to practice hospitality skills, the hotel also trains 40 to 50 students every year for management positions.