Independent Streak

Independent Streak

HOSPITALITY by Jean Gruss | Editor/Lee-Collier

The Watkins family has steered the Naples Beach Hotel & Golf Club for 60 years by continually renovating and upgrading.

When potential buyers visit Michael Watkins to talk about aquiring his family's Naples Beach Hotel & Golf Club, he doesn't even let them make an offer.

"I like my job," he tells them.

By most measures, the Watkins family has successfully steered the independent hotel through the recent upheavals that have buffeted the hospitality industry. Watkins and his brother, Henry Watkins III, have overcome hurricanes, the terror attacks of 9/11 and competition from the Ritz-Carlton and other chains.

In the last five years, the Watkins family has spent $40 million renovating and upgrading the 319-room resort. It was the first hotel in the Naples area to build a spa in 2000 and spent $6 million to renovate its lobby that now features sweeping views of the Gulf of Mexico.

The hotel has aggressively targeted the corporate business world by adding 22,000 square feet of meeting space in the new clubhouse at the golf course. It now has 34,000 square feet of meeting space. The hotel has won numerous corporate-meeting awards, including a coveted Pinnacle Award in August from Successful Meetings magazine's survey of its 72,000 readers.

With these and other measures, the Watkins family has fended off vigorous competition. It is the third generation to run the company, and Michael Watkins is confident the fourth generation will continue the tradition. The Watkins brothers have five children, who are still in high school and college.

Successful hiring is key

Ask Michael Watkins the key to his hotel's success, and he'll point to Jim Gunderson, the hotel's general manager. Like many others in the hotel's senior management, Gunderson is a refugee from the corporate world, having managed Marriott hotels all over the country before landing in Naples.

Hotel chains like Marriott move managers from one hotel to the next to let them gain experience. But Gunderson says he wanted to stop moving around. Watkins hired him in 1990. He has been general manager for the past seven years.

"Most of our senior management all have corporate-chain backgrounds," Gunderson says. "Most are here because they like the resort."

The Naples Beach Hotel offers managers a chance to become more entrepreneurial and to avoid moving around to climb the corporate ladder.

"A huge difference with the corporate chains is there isn't the support," Gunderson says. For example, when a Marriott needs a computer upgrade, Gunderson says a team of techies descends on the hotel to make it happen. Not so at independently owned hotels. "You're not going to get bailed out," he says. "We provide [managers] an environment where they are given a great amount of trust and responsibility to do their jobs without feeling threatened."

The hotel has unique advantages. Above all, it's the only one that has both beachfront and an 18-hole PGA championship golf course on site. "We have much more flexibility to add the personal touch," Gunderson says. That includes photography by Everglades photographer Clyde Butcher in every room, 5,000 orchids on display throughout the hotel and locally made ceramic-fish door numbers. In addition, the hotel has four restaurants, a beachfront swimming pool, a tennis center and a complimentary children's club.

"In the meetings market, we're good for corporations who like independent hotels," Gunderson says.

Gunderson acknowledges that the hotel can't compete with a chain that offers frequent-stay points to its members, but it holds its own in other ways. These include tailoring special room rates for groups and offering perks such as welcoming cocktail parties.

The hotel has done particularly well since it built and opened the clubhouse and spa in 2000. That's because the clubhouse added another 22,000 square feet of meeting space. What's more, the spa appealed to corporate-meeting planners, 75% of whom are women.

Still, it wasn't easy getting into the spa business. At first, the hotel put spa experts in charge of the new facility. Although they were good at creating top-notch spa treatments, the business side suffered. After a year, Gunderson put a manager with retail experience in charge and the spa became more profitable. "Making good hiring decisions is huge," Gunderson says.

The hiring challenges aren't limited to the managers. Facing an extreme labor shortage in Collier County, Gunderson has had to recruit employees from overseas to staff the front desk, clean the rooms and maintain the facilities during the height of the tourist season. "We now recruit people from Jamaica, Argentina and Brazil," Gunderson says.

Working through an employment agency, the hotel's human resource staff travels overseas with a list of positions to fill. Recently, 1,700 people attended a job fair in Jamaica for 60 positions at the hotel. They'll come on 10-month work visas.

Gunderson and Watkins say they're especially pleased with employees from Argentina. They hire English-speaking students during the peak season, and they come for four months on student visas. Many of them work at the front desk. "They present themselves well," Gunderson says.

With housing costs soaring in Collier, the hotel picks up the housing tab in apartments around Naples. "We will house close to 100 hourly workers," Gunderson says.

Hurricanes cloud outlook

The Watkins family already is looking several years ahead to plan for future renovations. Watkins estimates that the hotel spent $45 million to $50 million in the last nine years, including $20 million for the clubhouse and spa. So far, the hotel has been able to fund all its improvements without using debt.

Although Watkins is mum about what projects are on the drawing boards, he says the hotel is looking at the area near the beach and pool for improvements.

But one thing Watkins and Gunderson can't do is reverse the impact hurricanes have had on the business in the last few years. No amount of new construction or discounting can lure back corporate customers during August through October, the heart of the hurricane season.

"Wilma did more to us than anything," Watkins says. He hopes the passage of time without hurricanes will alter the pattern.

Gunderson says the hotel typically is 70% full during October. This year, he says, it looks like the hotel won't break the 50% mark. That's because meeting planners are reluctant to book hotels in Florida and instead are choosing locations such as Arizona, where weather isn't a factor. "Reducing room rates is not the deciding factor," Gunderson says.

What's more, schools are starting sooner, cutting into the leisure-travel business. Although the Watkins family declines to reveal financial data, about 40% of revenues come from corporate travelers and 60% from leisure travelers.

But the hotel has figured out ways to lure people to stay during the slow months. For example, it has started a series of live evening concerts that draw visitors from towns within driving distance, such as Fort Myers.

Fact is, the Naples Beach Hotel is located in the strongest hotel market along the Gulf Coast. The average daily room rate in Naples was $162 in 2005, way ahead of its nearest competitor, Fort Myers, where the average daily rate was $104.53, according to Smith Travel Research.

That's in large part because there are few parcels available for new hotels. What land there is has been gobbled up for condominium development. In season, the Naples Beach Hotel charges $300 to $400 per night, with the best room going for $775.

"In the Naples market, we would be perceived as a very good value," Gunderson says.

The Great Leveler

When Jim Gunderson arrived at the Naples Beach Hotel & Golf Club in 1990, 70% of the hotel's winter-season rooms had been booked by Thanksgiving. That's changed completely today, as most people book reservations much closer to the time they plan to travel.

Blame the Internet and 9/11.

After the terror attacks, last-minute travel became the preferred way to go and the Internet helped make it happen. These two factors changed Americans' travel patterns dramatically.

But despite more last-minute bookings, the Internet has been a blessing to independent hotels such as the Naples Beach Hotel, because it lets it reach millions of people. "The Internet is a great leveler of the playing field," says Gunderson, the hotel's general manager.

"Before, getting [information] out to agents was brutal, inefficient and costly." He says 85% of travelers already have a destination in mind when they search online for a hotel, so the Naples Beach Hotel is always a contender when someone searches for a deal in Naples.

Besides its own Web site (www.naplesbeachhotel.com), the hotel gets even more exposure by working with well-known travel sites such as Orbitz, Expedia and Travelocity. Gunderson estimates 30% of online reservations come through those online agencies. What's more, Gunderson can log online and see what the competition is charging and adjusts his hotel's rates accordingly.

- Jean Gruss