Published 8:08 am Wednesday, January 6, 2010

FRANKLIN—Local motel owners and managers say business is down and not expected to rebound anytime soon due to a sluggish economy and the impending closure of the International Paper Co. mill.

Despite this, all plan to keep their doors open and some are adding more amenities.

“The motel industry is really going to be affected in this area,” Mike Desai — who owns the Comfort Inn in Franklin and the Courtland Inn in Courtland with his wife, Harsha — said Monday. “All of the motels, the major franchises and the independents, they were all really dependent upon IP.”

Desai estimates that business is down 50 percent since November 2007.

“There’s nothing really going on right now,” Desai said. “There’s no construction. Leisure travel is also down.”

It’s the same story down U.S. Route 58 at the Palm Tree Inn near Courtland. Owner Charlie Edge said Tuesday that his motel, which he opened in early 2008, hasn’t made any money for the past two months and isn’t expecting to make any for the next two to three months either.

“Business is not too good,” Edge said. “We did pretty good back in the summer, (but now) we’re just hanging on. I think everybody has just got to do the best they can. It’s going to be rough.”

According to Days Inn owner Niketan Mehta, business from the Franklin mill has accounted for 70 to 80 percent of the hotel’s occupancy and revenues for the last decade.

In an Oct. 29 letter, Mehta urged the Franklin City Council to consider temporarily suspending lodging and property taxes. Suspending the taxes, he wrote, “(would) allow me to realign my business and figure out a way to survive in the upcoming difficult times ahead.”

“I need to re-assess my 2010 budget and figure out how to become competitive again in a crowded market, taking into account that our primary source of revenue will no longer exist, and we will have no other source of sustainable business once the doors of the mill close,” Mehta said.

Franklin Mayor Jim Councill said Monday that he and the rest of the City Council were very concerned about the local hospitality industry, including motels and restaurants.

“Absolutely we’re concerned, especially if they have any of (their business) financed,” Councill said. “Occupancy is falling off and we’re very sensitive to that.”

The mayor said the city would be discussing budget issues through March. He said that up to now there hasn’t been any discussion about Mehta’s suggestions.

“We’re going to have a real challenge this spring,” Councill said. “It’s going to take our best thinking to be as fair as possible to everyone. We’re concerned about our own revenues and our ability to maintain services.”

He added, “We haven’t had a conversation about what would be an option (for the motels). We can’t arbitrarily just reduce real estate taxes, because who would we include in that? I don’t know of any benefit to eliminating the lodging tax because the motels don’t pay that anyway, that’s paid for by the patron. (But) we will entertain any ideas that anybody might have.”

But some motels did have good news to report.

“Right now, I’m good,” Minal Patel, the manager of the America’s Best Value Inn, said Monday. “We have good business right now.”

Patel said the motel, located on Carrsville Highway near the John Beverly Rose Airport in Isle of Wight County, was currently 60 percent occupied. He said that every four months or so the motel’s 80-to-90 rooms are full because cleaning crews working at IP during departmental shutdowns stay there, typically for a full month or two.

“Of course it will have some effect,” Patel said of the nearby mill’s closure. But he said the motel was making improvements to its amenities, including a pool and pool tables. He said guest rooms will have their own coffee machines and the motel will provide Wi-Fi Internet access.

Meanwhile, Edge said he has purchased a swimming pool for the Palm Tree Inn and plans to install it in the spring. He bought it because “in the summertime a few people called and asked if I had one.”

And Desai said in October that his plans to build a 70-room Holiday Inn Express on Armory Drive are on hold until the economy improves. The project, which would be 18,760 square feet in size and include a 1,276-square-foot conference room, was approved by the city in late 2007 and early 2008.

Both Edge and Desai predict business won’t pick up until 2011 at the earliest.

“It won’t rebound until 2011, and it won’t be that much,” Desai said. “We don’t know what the future will be, (but) we’re planning on staying.”

Edge concurred, saying, “It will be over another year (before business rebounds). This time of year, people are not traveling as much. I have to have the same number of employees up there working. The light bill is going to be the same. The rent is going to be the same. It’s just tight right now; it really is.”

“If you aren’t pretty strong, you aren’t going to be here.”