|By Jim DuPlessis, The State, Columbia, S.C.|
Knight Ridder/Tribune Business News
Oct. 15, 2003 - South Carolina hotels usually conjures images of sand, surf and highly seasonal business.
But Samuel and Randy Fowler of Camden learned early that the best base for their business was business. The two have spent more than $50 million since 1997 to build hotels that cater to the business traveler.
Today, Fowler Hospitality is a Columbia-based chain of nine hotels generating $18 million in yearly sales from Charleston to Charlotte.
By early next year, the Fowlers plan to begin building their 10th hotel.
They will spend $9.5 million to build a Marriott Residence Inn off I-77 on Farrow Road, near Providence Northeast hospital and their headquarters.
When the 113-suite Residence Inn opens in early 2005, Fowler Hospitality will have more than 1,000 rooms in the Carolinas.
The latest hotel was delayed by the steep drop in business travel in after the Sept. 11 terrorist attacks, said Sam Fowler, the company's 50-year-old chief executive. An improving economy led the company to revive the project last summer, but he said the economy isn't healthy enough for him to plan any further expansions.
"We're not in a rush to develop more hotels," Fowler said. "It really depends on what the economy does," Fowler said.
So far, the economy has not done much for Marriott hotels or its competitors:
-- Nationwide, Residence Inn occupancy rates were 78 percent in the first half of the year, unchanged from a year earlier. Room revenues were down 3 percent in the first half, but that was an improvement from drops of more than 7 percent in 2002 and 2001, according to reports from Marriott International Inc., the Washington, D.C., franchiser.
-- Extended Stay America Inc., the Spartanburg-based economy chain, had a 5 percent room revenue drop in the first half, and a 17 percent dive last year that caused it to slam the brakes on its rapid U.S. expansion plans.
-- Statewide, occupancy rates, prices and room revenues have been steady for January through August, despite revenue drops along the coast, according to Smith Travel Reports.
-- Local conditions were better. Demand was strong enough to allow Columbia hotels to raise prices about 1 percent for January through August, causing a slight drop in occupancy rates but having little effect on revenue, according to Smith Travel.
Fowler said the Columbia area's economy is more stable than other areas of the state because it has a diverse base of businesses buttressed by the University of South Carolina and state government.
Their father, the late Samuel Fowler Sr., was one of the commercial pioneers in Lugoff, opening a Holiday Inn on U.S. 1 in 1966 that became the nucleus of Fowler Hospitality, a partnership owned by the Fowlers and investor Skip Peter of Columbia.
The Fowlers' first expansion was in 1985 when they built their second motel, a 124-room Holiday Inn in Sumter.
But the company's building boom really began when they became a Marriott franchisee in the mid-1990s. The Courtyard Marriott and Fairfield Inn brands were popular with business travelers --Fowler's core clientele.
The Fowlers spread to the coast to build hotels near Charleston and Hilton Head. They ventured across the border to build a hotel near Charlotte. And they expanded their base in the Midlands.
Altogether, they added 675 rooms from 1997 to 2001, a four-fold increase.
They built their most recent hotel in Camden, a Fairfield Inn & Suites by Marriott.
For years, they coveted the interchange at I-20 and U.S. 521. At the close of the 1990s, the closest interstate gateway into Camden was still largely undeveloped, home to just a couple of convenience stores.
When the city and county extended water and sewer lines down to the interstate about three years ago, the Fowlers began planning to build there.
"Without that, you couldn't have done anything," he said. "We expected there would be a considerable amount of development once all the infrastructure was put in there." Although I-20 is a major corridor to Myrtle Beach, Camden is too close to the beach to generate many stays from tourists. Horse shows at the nearby Westfall Arena and other local events bolster the weekend business, but the base of Fowler's business remains the business traveler.
The county's commitment to developing industrial parks and its success in attracting companies "seemed to bode well for future growth and jobs," Fowler said.
But the company needs more than a crystal ball to win capital. The company has hired an independent firm to assess the feasibility of each Marriott hotel it has built. The studies estimate guests, and chart the competition's movements.
"We don't make a final decision to move ahead unless we get a very positive report," he said.
The study for Camden was promising. Fowler decided in 2000 to make the $4 million gamble, and construction was under way by the summer of 2001.
In Columbia, the company had opened a Courtyard Marriott at the I-77 and Farrow Road interchange in 1998. It also bought an adjacent 3-acre plot where it planned to build a Residence Inn.
Then came the recession and the Sept. 11 terrorist attacks that grounded business travel. The Columbia hotel was iced, but work proceeded in Camden.
Business was slow when Camden's Fairfield Inn opened in late 2001, but it has since picked up, Fowler said. Now he hopes the interchange will attract a family-style restaurant like, say, a Cracker Barrel.
Charleston has been another strong market for the company, Fowler said.
The area has benefited by its strong overall population growth, a growing manufacturing base and tourism.
Fowlers' hotels in Charleston aren't designed primarily for tourists.
They're in the West Ashley area by the California Dreaming restaurant.
Much of its business comes from visitors to the Medical University of South Carolina.
But Charleston's tourists help fill the gaps left by weekday business travelers, said Fowler, who moved there after the hotels were built.
"It doesn't matter if it's downtown Charleston, or North Charleston: Everyone gets a piece of the tourism business on Thursdays, Fridays and Saturdays," Fowler said.
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(c) 2003, The State, Columbia, S.C. Distributed by Knight Ridder/Tribune Business News. MAR,