Eureka Springs Hotels Target Business, Boomers as Revenue Tops $20M

Vichy showers and Wal-Mart vendors helped vault revenue at Eureka Springs’ historic Crescent Hotel by about 10 percent so far this year. That compares with an average 4 percent increase for all of the city’s 130 lodging businesses combined.

This tourist town of 2,000 people brought in $20 million in hotel revenue last year. That’s $2 million more than Fayetteville, which has a population of 58,000 — 29 times the size of Eureka Springs.

To keep the flow of tourists coming in, it has become essential for the people of Eureka Springs to reinvent their quirky hamlet as times change. Throughout its history, Eureka Springs has been billed as “The Magic City,” “The Stairstep Town,” “The Gem of the Ozarks,” “America’s Little Switzerland” and “The City That Water Built.”

Jack Moyer, the Crescent’s manager, keeps coming up with new ways to market the 117-year-old, four-story hotel. Things have changed considerably since he became general manager of the Crescent and Basin Park Hotels in 1997.

“We had zero business in corporate meetings,” he said. “This year, we’ll do $750,000.”

Now, Moyer is targeting vendors who sell to Wal-Mart Stores Inc., 35 miles to the east in the boomtown of Bentonville. Tyson Foods Inc. in Springdale is also in his sights. Moyer pitches the Crescent as a logical place to hold company retreats and conferences. The serene mountaintop overlooking this Victorian town is bound to be a good place for brainstorming.

“We’ve seen several Wal-Mart vendors hold retreats here,” he said. “We’ve had Procter & Gamble, Clorox, several different companies come in here.”

Moyer said he markets the business meetings to two areas: Northwest Arkansas and Springfield, Mo.

After a day of meetings, businesspeople can hit the hotel spa for a mud wrap or Vichy shower, a wet room where patrons are massaged by jets of pulsating water.

Revenue for the recently expanded spa alone is up 15-18 percent this year.

Moyer said the Crescent brought in $2.8 million last year, with rooms accounting for $1.2 million of that.

Revvin’ Up Revenue

The Crescent may be doing better than most Eureka Springs hotels, but things weren’t bad last year all the way around. Revenue was up 5.3 percent from 2001 for a total of $20 million from all of the city’s lodging businesses, according to city tax records.

At the seven-story 1905 Basin Park Hotel downtown, 2002 revenue was $1.7 million, with rooms bringing in $804,330 of that total. Room revenue at the Basin Park was up 2.5 percent over 2001, said Greg Hein, the company’s controller. Room revenue at the Crescent was up about 1.5 percent in 2002, but Moyer made up for the meager increase in rooms with a healthy increase in the spa and food service business.

The Basin Park was made famous by Robert Ripley’s “Ripley’s Believe It or Not!” radio show that began in 1930 for having seven ground floors. Each floor has an iron fire escape that leads to a cliff behind the building.

Regular room rates are $109-$149 at the Crescent and $89-$109 at the Basin Park.

The Crescent and Basin Park are owned by Marty and Elise Roenigk, who bought them in 1997. Originally from Connecticut, Marty Roenigk now runs CompuDyne Corp., a homeland security firm, from the penthouse of the Crescent Hotel, although the company’s official address is in Maryland. CompuDyne makes bullet-, blast- and attack-resistant windows and doors that are used in U.S. embassies abroad.

Moyer said the busy season in Eureka is now from Valentine’s Day in February through December.

“For a long period, there was a summer season and shut down,” he said. “I’ve seen that change since I’ve been here.”

But the height of the tourist season is still summer and October, when leaves are changing color in the Ozark Mountains.

A few years ago, Eureka Springs concentrated on motor coaches full of elderly tourists on their way to the country music mecca of Branson. Now, Eureka caters more to baby boomers, Moyer said.

“Where it was core business before,” he said of motor coach riders, “now it is residual business.”

Moyer came to Eureka Springs in 1994 as manager of the Basin Park Hotel. He became general manager of the Crescent and Basin Park hotels when the Roenigks purchased the businesses in 1997. Robert Tollett now serves as hotel manager of the Basin Park, although Moyer is still general manager.

Moyer also markets the Crescent and Basin Park as places for weddings and receptions. He said the two hotels together host about 450 weddings a year.

“I booked our first wedding at the Basin Park,” Moyer said. “I would say they were probably doing less than 20 a year. Now we can do 20 a Saturday [at both hotels combined].”

Inn Of The Ozarks

Terry Cook, sales director at the Best Western Inn of the Ozarks, can’t help laughing when he talks about the Eureka Springs Rotary Club meetings. He has a running gag going with a friend who is sales manager at the 1886 Crescent Hotel.

When his friend introduces Cook at the meetings, he says, “I’d like to introduce Terry Cook from the historic 1972 Best Western Inn of the Ozarks.”

Cook comes up with a quip of his own, usually about cobwebs at the Crescent or something else referring to its age, but it all boils down to history vs. modern conveniences.

“You can come to a historic town and have modern facilities to meet in,” Cook said of the Inn of the Ozarks.

And many people apparently do opt for modern conveniences. The Best Western Inn of the Ozarks is Eureka Springs’ No. 1 hotel as far as revenue is concerned. The 122-room hotel and adjacent 20,000-SF convention center brought in $3.4 million last year, including food sales.

Cook said that number will be hard to beat this year. The hotel’s convention center was destroyed by fire in 2001 and rebuilt. So people were curious to see the new facility. Sales were up 18 percent in 2002, but that’s largely because events were canceled in 2001 because of the fire.

“When the fire happened, we lost 70 percent of our business because it was tied to conventions,” Cook said.

“We’re having an OK year,” he said. “It hasn’t been great, but we’re doing better than most people. We won’t do better than 2002, but we’re having a good year. We’re not starving. In this economy, people just aren’t traveling. But it looks like it’s going to be good for the rest of the year.”

The Best Western Inn of the Ozarks is owned by Ozark Lodging Ltd. Partners, with Randy Wolfinbarger serving as general manager and principal owner.

Rates at the Best Western Inn of the Ozarks are $89 to $159 for suites in season and $39 to $109 during the off season.

“We run high occupancy on Thursdays, Fridays and Saturdays,” Cook said.

Cook said he has 105 wedding receptions scheduled for the Best Western Inn of the Ozarks so far this year.

New Orleans Hotel

Arnold Lehman decided to get into the hotel business last year. He’s the Rogers developer who is responsible for the Village on the Creeks mixed-use complex along Interstate 540.

Lehman bought the historic New Orleans Hotel in downtown Eureka Springs from Don and Shirley Newberry of Oklahoma. The Newberrys also own the Ozark Mountain Hoe-down, an entertainment venue in Eureka Springs.

Since then, Lehman has spent most of his Friday afternoons in Eureka helping clean out the basement and renovate the space to make it rentable as shops.

Lehman said the hotel has four floors facing Spring Street and six facing Center Street (the back of the hotel).

“We have also renovated three ghost rooms, and he’s renovating the [5,200-SF] restaurant, which is for lease,” said Kara White, manager of the New Orleans Hotel.

“We’re just waiting for a sucker to come along,” Lehman joked.

The restaurant has been closed for renovation since Lehman purchased the hotel in April 2002.

White said she and Lehman are working to “overcome a bad reputation” because of neglect at the hotel in previous years.

“When we came here, the circulating pump was out,” Lehman said. “The hot water tanks were all leaking.”

Lehman said he had to replace four hot water heaters and two holding tanks. He’s spending about $200,000 to renovate the hotel.

Regular room rates at the hotel are $89 to $125 on weekdays and $125 to $175 on weekends.

White said the New Orleans Hotel brought in about $240,000 in revenue last year, but that number should improve this year.

Lehman said revenue was up in July, with city tax records showing the New Orleans Hotel ranking No. 3 in Eureka Springs.

“We were up last month, but it’s not as good as we hoped,” he said.

Eureka Springs’ Top 10 hotels

Rank — Hotel — 2002 Revenue*

1 — Best Western Inn of the Ozarks — $3,427,850
2 — Crescent Hotel* — $1,260,600
3 — Holiday Inn Express — $1,151,950
4 — Best Western Eureka Inn — $858,750
5 — Basin Park Hotel* — $829,450
6 — Comfort Inn — $806,850
7 — Bavarian Inn — $552,700
8 — Swiss Holiday Resort — $385,300
9 — Victoria Inn — $299,600
10 — Land O’ Nod Victorian Inn — $272,400

* Figures are for room, food and retail revenue earned from December 2001 through November 2002, except in the case of the Crescent Hotel and Basin Park Hotel. For those two hotels, the figures exclude food revenue because the restaurants file that separately.

Source: Eureka Springs Advertising & Promotion Commission (for corporation names and sales-tax figures).