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Consultation Report Transient Housing Survey
 

      
[Cover] Consultation Report Transient Housing Survey
Special Collections, D.H. Ramsey Library, UNCA

Roy Wenzlick & Co.

This report surveys the state of transient housing – motels, hotels, and boarding rooms – in Asheville in 1960.  It also proposes the construction of a 200 unit motel with restaurant, swimming pool, and gasoline service station.  This motel would be built in the downtown area near the proposed Civic Center cite.  The rationale given for another motel is that the tourism industry in Asheville is growing, and that having adequate guest rooms near the new Civic Center would encourage tourists to come to events. 

Transient Housing Survey
Asheville, North Carolina

by Roy Wenzlick & CO.---------------------------------Participating Staff
James R. Appel M.A.I.
Hiram C. Martin Jr.

Attention: Mr. Charles Dent, Executive Director

Gentlemen:

In accordance with our contract, we are pleased to submit to you, our findings resulting from the study and analysis of Transient Housing in Asheville, North Carolina, contained in the attached report. We are indeed grateful for the splendid cooperation of your project planners, plan commission, and your staff, but most of all for the assistance of your citizens. In particular, the Tourist Association, its president, Mr. Al Diamond, and its members opened their books and offered all cooperation possible, even though the then unknown result of the study might have had an adverse affect on their respective business ventures. Their confidences have been respected, but their figures were used to compute rate of absorption, gross volume, etc.

Principal findings and conclusions are:

1. Tourist business has increased at 2% per year for the last 10 years meaning that, a net of 60 new transient rooms per year can be added to the Asheville supply without affecting the net of existing operators.

2. The Civic Center is designed to bring more people downtown. A motel will help to fill the need thus created and complement the project by helping bring more people downtown.

3. Competitive rooms downtown will be unable to meet existing, or the future demand, and will need to be increased in the next 10 - 20 years if the Civic Center and the Comprehensive Plan are successful.

4. The reuse of land in the Project Area warrants the construction of 200 units in the area.

We hope that this study justifies the inclusion of a motel site in the final redevelopment plan as we believe it will enhance the project and contribute to the overall success. It will be economically feasible and the land should bring a high price in the bidding for the reuse as a motel site. Should there be any way in which we can assist you further, do not hesitate to call upon us.

Respectfully submitted,

HCM:pe

Page Introduction And Purpose Of Report................... 1
Premises Of Report............................. 1
Background Data................................ 3
Existing Transient Facilities....................... 6
Rate Of Absorption.............................. 8
Rate Of Occupancy.............................. 8
Anticipated Market.............................. 11
Suitability Of Area.............................. 12
Conclusions And Recommendations ................... 12

Proposed Redevelopment Plan....................... 2
Location of Major Motels.......................... 9

The Redevelopment Commission of the City of Asheville, North Carolina is proceeding with an Urban Renewal project, N.C. R-13, called the Civic Redevelopment Project. Because it was questionable as to the feasibility of including a site for a motor hotel or motel in the project area, and in conformance to the URA procedure, a separate study of supply and demand of transient housing facilities is being made. The actual purpose of the report is to determine whether or not a market will exist for a motel site, at such time as the cleared land would be offered for sale to a redeveloper. Also, taken into consideration is the economic effect of such a motel, if it were to be constructed, on the other hotel or motel accommodations in and around Asheville.

PREMISES OF REPORT

A second premise of the report is that no new motel will be built in the downtown Asheville area in the intervening period from the present to the time of offering a motel site in the project area for sale.

A third premise is that the final Redevelopment Plan will contain a desirable site for a motel in conjunction with the Civic Center, and that the plan will contain adequate parking, street realignment, and all other features to make an economically feasible project.

BACKGROUND DATA

North Carolina stretches from the Atlantic Sea Coast on the east to the Great Smoky Mountains on the west. In between the two lies the Piedmont Plateau and the Blue Ridge Mountains. The state, therefore, has all types of scenic wonders from the beach to the most rugged areas, including the highest peak in the east, Mount Mitchell, over 6,000 feet high and only 30 miles from Asheville. Partly as a result of this natural beauty, North Carolina has become quite a tourist attraction. So much so that for the state, the Travel Industry ranked third last year, doing a $360,000,000 volume. This followed textiles and tobacco, and preceeded furniture in the list of income in the state. Asheville, in Western North Carolina is at a cross road for tourists driving either east-west or north-south, plus the Blue Ridge Parkway. It is on the Southern Railroad and has a new all-weather airport that allows night landings and take offs of commercial aircraft for the first time. The new inter-regional highway system eliminates many previous dangers of mountain driving. In short, Asheville from now on will be more accessible to more people than ever before. This would indicate that an increase could be expected in tourism business in the Asheville area.

In addition to tourists, and the normal visiting of a city the size of Asheville (over 100,000 in the metropolitan area), there is an average amount of business travel required to sustain the economy. On the next page, a chart is reproduced showing employment in Buncombe County. This county had a population of 129,879 in the 1960 census and constitutes the primary trade area for Asheville. The figures indicate that 39.2% of the population is employed, with the majority in non-manufacturing jobs. This justifies to a degree the Chamber of Commerce claim that 34% of the economy of Asheville is dependent on the tourist trade. Unfortunately there is no exact way to break down the travel business to show what percentage is normal for a city of this size. Certain studies have been made that enable us to estimate with a fair degree of accuracy, however. The analysis which follows is a combination of facts insofar as is possible, and conservative estimates beyond that point.

2/ Includes leather, machinery other than electrical; stone, clay and glass products, fabricated metals, transportation equipment, silverware, and all other.

Source: Employment Security Commission at North Carolina

1. Motels - Included in this category are all roadside accommodations commonly known as a motel or tourist court plus some units with kitchen facilities for more extended vacations, and some of the larger and better guest homes that have converted and have private baths, etc.

3. Guest Homes - These are usually larger old homes that have rooms for rent by night or week. Usually sanitary facilities are shared. These guest houses are naturally the cheapest, and they actually represent a shortage of more desirable rooms. They also take care of those that cannot afford better accommodations. We have estimated that there are 1000 additional rooms that are included in this category excluding normal rooming houses.

The operators of these guest houses are either seeking extra money, are retired, or in some cases are actually making a living from the operation.

The second fact immediately apparent in the transient room field, is the difference in rates due to the, "season." Following are the rates of a good motel for single occupancy of a twin or double room for a typical year for tourist occupancy.

The same room will rent to a commercial man who is a steady customer for $5.50 to $7.00 winter and $6.50 to $8.00 in the summer. All good motels do this to insure winter business. The percentage of occupancy by commercial people is 80% in the winter and 10% in the summer.

The third fact of existing business is that by far the largest share of convention business goes to hotels rather than motels. The city auditorium is next door to the Vanderbilt and a short block from the Battery Park Hotel. Both are excellent with good facilities and are able to care of almost all of the convention business. Only the largest of the conventions spill over to the other hotels and motels. However, these hotels are old, and it must be considered that in the next 20 years, that they will need complete renovation if they are to compete.

A fourth fact concerning existing tourist business, but only mildly affecting transient rooms, is that Asheville is a center for religious summer camps. Literally thousands come to the various assemblies, camps and retreats in the mountains. These are operated by Baptists, Methodists, Independents, and many other groups, some on a national basis. These people are classed as tourists, but only the over-flow finds its way into transient rooms. The Asheville economy, though, profits from food, gasoline, and other sales.

The major hotels are downtown while the motels mainly are on the highways entering the city. The newest group of motels centers around the Howard Johnson Motel and Restaurant. Four years ago, it was thought by motel owners that with the new construction in this area, other motels would be forced out of business. Instead of this happening, business either held steady or increased and other motels modernized, added rooms and swimming pools. Only very marginal motels and guest houses were affected adversly by the construction of new units.

According to an investigation of building permits, the last six years has seen the construction of almost 600 new motel units in the Asheville area. At the present time, the Orton Hotel on Patton Avenue is being demolished. It is the announced intention of the owners to erect a 100 unit motel on this site. We do not believe that this site is either large enough, or in the right place to assure success on todays' market, but if it goes ahead, it will have some effect on existing units.

Because construction of new units was in clusters rather than spread out evenly, both from geographical and time elements, we have been able, by checking operating statements, to conclude that the increase of tourist business over the last six years has been sufficient to absorb at least 60 new units each year. Beyond this point the marginal operator suffers. Actually, it is difficult to compute how many marginal rooms have been removed from the market, but by checking demolitions and owners, we have been able to determine that approximately 200 rooms have been removed from the market in the last six years. This leaves a net gain of 400 rooms or 66 per year. It was from this that we determined the rate of absorption to be 60 units per year.

RATE OF OCCUPANCY

The total number of rooms used earlier is in reality, as far as motels and guest houses are concerned, a seasonal figure. Naturally, hotels, large motels and chain connected motels stay open all year. However, with the fall of occupancy

Location of Major Motels
Asheville, North Carolina Area

TOTAL - 70 MOTELS CONTAINING 1900 ROOMS
                 8 HOTELS CONTAINING 1200 ROOMS

This income totals $49,300 for the entire year, but more interesting than the total, is the occupancy rate which was practically 100% in the season and fell to 22% in January. The chain motels reported 80% average occupancy for winter months which produced only 20% as much income per month as 98% occupancy did for the season months. One of the motels in the illistration [sic] is for sale at 3.5 times the income or approximately $175,000 (approximately $7,000 per unit). Both figures produce a profit over and above depreciation at both the existing occupancy and rental rates. It is quite obvious that additional rooms for rent during winter months could be harmful to existing units if they caused vacancy rates to fall much lower. Again referring to the absorption rate, however, with 66 new year around units per year opened in the last six years, the gross incomes of the other existing units has changed very little. There is absolutely no reason to believe that tourism will fall off in years to come, unless the whole economy suffers from a collapse. Some people argue that with better highways, more people will drive further per day and pass through Asheville without stopping, but that argument does not hold up when it is also considered that people from further away will get to Asheville. We can con-

servatively assume the rate of absorption to continue, allowing for 60 new units per year to enter the market. If these new units are not built, winter occupancy rates should increase, and marginal operations become more frequent. Perhaps some units now closing in winter would remain open.

Another factor of motel operation is economic obsolescence. Changing roads, materials and designs cause rapid loss of business, and consequently value. Accelerated depreciation to allow for this must be included. Motels must be remodeled and refurnished to continue to obtain top rates. This obsolescence is an additional factor in determining the rate of absorption and the constant increase of marginal units, as new units are built.

ANTICIPATED MARKET

The entire Civic Center Project is designed with one thought in mind, namely to bring more people to Asheville, and still more particularly to bring them downtown. If the project is successful, downtown hotels, motels and business would profit. If it helps bring more conventions to town everyone profits, particularly if it is in winter. The simplest way to increase occupancy or create a need for more transient rooms, however, would be to increase the length of stay of the visitor. Last year the average length of stay for tourists was 1.3 days. If this figure could be raised to two days by the added attractions of the Civic Center, approximately 500 additional rooms would be needed to accommodate the people. Even if the Civic Center doesn't do these things, the added 60 units per year would show a need for 180 units in three years. This would occur about the time a motel could be built on project land. This project is also only one step in the revival of Asheville. Another improvement, called for in the forthcoming comprehensive plan, is street alignment. Between the initial street alignment necessary and units lost by demolition, we have counted an additional 50 units that will be removed from the market. Therefore, even if the Civic Center were not to be built, three years would show a market for 230 new transient units. Ultimate market will be covered in the conclusion.

SUITABILITY OF AREA

While the final Redevelopment Plan has yet to be prepared, our suggested plan shows a motel site of approximately three acres. We have included a restaurant, swimming pool and gasoline service station in the motel operation. We have proposed that the motel have 200 units. Even if the site finally selected is not as prominent as our suggestion, we believe that a minimum of a three acre site will be adequate, and that a motel or motor hotel would fit into the redevelopment pattern, and harmonize with existing uses to remain. Certainly if conventions increase, more downtown rooms can be used. The project would be helping its fundamental purpose by having an additional transient occupancy downtown. Everyone staying there would be part of an answer to the problem of bringing people downtown. For these reasons, plus the physical features of the entire project, we believe that the area is entirely suitable for a motor hotel.

CONCLUSIONS AND RECOMMENDATIONS

From the standpoint of marketability and suitability, we believe the Urban Renewal Project NC-R-13, should include a minimum of a three acre site for a downtown motor hotel. We wish to augment the anticipated market section of this report, however, with another opinion of what we will call the ultimate market. This involves a dependency on scheduling, and meeting the community's needs with this project. Asheville is presently completing a new comprehensive plan for the city. It naturally involves all aspects of economics, sociology, governmental, organizational problems, and their end result, physical plans. These physical plans will be set in a priority order and the means of implementing them will be proposed. Among them are Central Business District Plans, Traffic & Transportation Plans, Community Facilities Plans, Urban Renewal Plans, and many more. The east-west expressway is the first step of the Comprehensive Plan to be implemented. The second step is this first Urban Renewal Project. Both of these fit into an orderly pattern of the anticipated and planned growth and progress of Asheville. The ultimate market which we describe, therefore, is the market, or demand, which will be created by following

this new and bold comprehensive plan. Bearing in mind the fact that plans must be flexible to meet changing needs, we believe that implementation of these plans will create a new market for renovation and construction of additional hotel rooms and motel rooms in future areas to be changed by clearance, street realignment, or other public improvements.

Certainly, if the Civic Center is under development prior to the time the motel site is offered for sale, the site will be more desirable and will bring a higher price than if it were to be offered prior to certain knowledge of the construction of a Civic Center. This reasoning applies equally to all sites. Therefore, we recommend the following schedule, or procedure:

1. Immediately incorporate or choose the group to develop the Civic Center.

2. Raise all of the equity money necessary to assure development.

3. Sell Civic Center site.

4. Offer other sites to redevelopers.

If something approximating this schedule is followed, the ultimate market is such that the 200 units herein recommended would have little effect on the anticipated market previously discussed. These 200 units might be meeting an entirely new market created by the Civic Center which would be in excess of the present rate of absorption. Indeed the Civic Center could, by increasing interest in Asheville, cause the length of stay to increase, attract more people and cause a still greater market for transient units to develop in Asheville.

If a motel were not to be completed for the project, the Civic Center might have to be primarily for, "home town consumption, " as it is quite conceivable that the distance from the center to adequate rooms would be discouraging to tourists.

Looking 10 and 20 years into the future, we can predict that the transient room capacity of Asheville may have to be increased by 25% by 1970 and 100% by 1980 if the comprehensive plan is completely adopted and properly implemented. By 1980, Asheville and Buncombe County could have a population approaching 250,000 and the tourist business could be twice what it is at present. While these predictions may seem overly optimistic, they are actually based on rather conservative estimates. For instance, if we base the economic life of a motel at 25 years, almost every unit in Asheville would need replacing by 1980. If the present rate of absorption continues, 20 years x 60 units is an additional 1200 units. This would only replace the present supply. The State of North Carolina has estimated that tourist business will double by 1980. Therefore, it is within the realm of feasibility for us to state that the rate of new transient facilities should grow to produce twice the present supply by 1980. Therefore, in this analysis it can be seen that we have used a most conservative approach in establishing the feasibility of a new 200 unit motel in the urban renewal area. Present growth of transient facilities is 2% a year. This should gradually increase as urban renewal and other plans are implemented to account for the above projections. All elements for this transformation are present. If faith in the soundness of planning justifies the capital expenditures necessary, Asheville can grow and prosper.