Recasting the Roenigk Spirit

When Martin Roenigk purchased the 1886 Crescent Hotel & Spa in 1997, he was more interested in operating as a preservationist than a profit-raking hotelier.

“He was totally opposed to taking a historic shell and putting a new building inside it, OK?” general manager Jack Moyer said. “He wanted to freeze a period in history.”

Roenigk (pronounced like ren-ick) was a businessman, however, and a successful one. That meant by the time he and his wife and co-owner, Elise, celebrated the 10-year anniversary of their relationship with the historic Eureka Springs property, Roenigk recognized the best way to preserve the Crescent was to make it financially self-sustainable.

The odds of the Crescent realizing self-sustaining status seemed in real jeopardy more than 13 months ago, though, when Roenigk was killed in a car crash in Iowa. By the time the staff had plowed through what Moyer called “sort of a three-month state of shock” by focusing on serving its customers, creeping doubt had been replaced by wild speculation.

At a November meeting attended by staffs of the Crescent and 1905 Basin Park Hotel – also owned by the Roenigks – Moyer announced the measures that would be taken in an effort to stabilize the long-term futures for both properties.

“We needed to re-stimulate ourselves, anyway,” Moyer said, “but that kind of gave us a kick in the pants.”

 

Historic History

Both the Crescent, which sits atop a hill above Arkansas’ funkiest tourist trap, and the downtown Basin Park achieved some measure of renown long before the Roenigks took ownership. And while many believe both to be haunted, the Crescent has earned the particular distinction of being one of the most haunted hotels in America.

That’s not what seems to have caught the Roenigks’ eyes, though. Jodie English, director of sales for both hotels, met the Roenigks at a historical hotels conference years ago and was struck immediately by Martin Roenigk’s attention to detail.

“His eye was always to the preservation, as opposed to a hotelier looking at the operations side,” English said. “Marty was looking at the doors and windows.”

Moyer joked that he and Roenigk “online dated over the FAX machine for quite some time,” meeting only after the contract for the purchase of the Basin Park had been completed. Moyer was serving as the general manager of the property then – February 1997 – and said it didn’t take long for Roenigk’s focus to shift toward the Crescent.

The Roenigks bought the Crescent about three months later, at a time when the hotel was in dangerous disrepair. Moyer said it was in such a sad state a bellman named Boyd Pyle developed a routine he followed in hopes of landing guests at a room rate of $29 per night.

“He would walk them room-to-room, literally, until they found one they were willing to stay in,” Moyer said. “That was how this hotel stayed afloat.”

Despite the Crescent’s condition, the Roenigks set up residence on the top floor. Over the next decade, restoration efforts were undertaken and many credit the Roenigks with revitalizing to some extent the city’s tourist and event trade.

“I think the Crescent is a symbol of the resurgence of tourism in Eureka, a sign that people were willing to come in and make an investment – and hang in there – when times were not so great,” said Richard Davies, executive director of the Arkansas Department of Parks and Tourism.

 

A Flawed Formula

But despite its successes and feel-good story arc, the Crescent’s comeback was muted somewhat by the same deep pockets that made it possible in the first place. While Moyer preferred to keep reserves of at least $350,000 to get the Crescent through the offseason – read: winter – Martin Roenigk often used some of those funds to fuel his wide and varied interests.

“Marty loved to spend money,” Moyer said. “That’s one thing he loved to do, and he would take the money from the hotel and sort of special-interest it, knowing that when winter came, he would pull it out of his reserves and put it back in.”

At the time of Roenigk’s death, however, with the tourism sector sagging nationwide, that option was suddenly gone.

“We knew from our results that we were a little bit in trouble without having the Marty cush(ion),” Moyer said. “Not that we weren’t profitable, but we had spent the reserves.”

Thus, the November sit-down was called and the cuts were announced. Not only would numerous positions not be filled come spring, but some managers carried as salaried employees through the lean months weren’t afforded that luxury.

An energy committee was formed to uncover ways of saving money. A decision was made to cut about $50,000 from the advertising budget. Even members of the executive staff took a 7 percent pay cut.

“There wasn’t one person that wasn’t impacted,” Moyer said.

The honest approach seemed to register with the employees, many of whom consider each other family. Part of that is because, of the hotels’ 157 combined workers, 64 have been employed at least a year, and another 34 more than five years.

Perhaps more critical to the all-for-one reaction, director of marketing and communications Bill Ott said, is the atmosphere fostered by the Roenigks.

“The first thing that struck me when I came here, having worked in the tourism industry for several decades in Hot Springs, was that the general manager always wore $1,000 suits and the owner always wore $2,000 suits,” Ott said. “Well, Jack was dressed nicely, but he wasn’t wearing a suit. Then I meet the owners and they’re wearing jeans and T-shirts.

“It was that laid-back style that impressed me. … They were a perfect fit for Eureka Springs.”

 

Bouncing Back

The relationships the Roenigks built with their employees might best be exemplified by Moyer’s decision to lay bare payroll figures, profits, and everything in between during that November meeting.

“We talked about evolving over a three-year course to be able to get to the point where going in at the end of October we have $550K in the bank,” Moyer said in reference to building larger reserve funds.

“Ultimately it just came down to the fact that we’re mature enough as an organization that we can be sustainable, and we have to do it. We just hadn’t had to do it.”

So far, the results are encouraging. After totaling about $2.7 million in 2009 revenue, the two hotels brought in about $840,000 through the first five months of 2010. Both estimates are based on taxes collected by the city.

It should be noted the 2010 totals reflect January and February, traditionally the two slowest months of the year for practically all of Eureka Springs. More to the point, the two hotels have accounted for about 18 percent of all hotel revenue in Eureka Springs this year, compared to about 14 percent for all of 2009.

Along with the stricter budgeting, Moyer credited Ott’s “exploravaction” concept aimed at attracting kids. Savvy advertising also has helped during a time when many families have foregone beach vacations in favor of closer-to-home, impromptu trips.

“For a regional destination like this, people are buying weeks out and not months out,” Moyer said. “Sometimes it’s three days out, and if you’re not on the radio three days out – and that’s who’s buying – you ain’t getting bought.”

The hotels’ recovery has been one welcomed by more than just those associated with the properties.

“I think the community really rallied in support of Elise and hopes and prays that she continues to go forward with the properties,” said Jim Williams, executive director of Eureka Springs’ advertising and promotion commission.

Whatever the reasons, Moyer said he’s simply trying to preserve the spirit of the ultimate preservationist while also bolstering profits.

“Marty really loved the human element, and that’s why he loved Eureka so much,” Moyer said. “You’ve got human element to the max here.” 

 

 

Eureka Springs Hotels Enjoy Higher Revenues

 

Hotels in Eureka Springs enjoyed a slight rise – about 1.3 percent – in year-over-year revenues in 2009.

That’s according to tax figures collected by the City Advertising and Promotion Commission. Estimated revenues based on those collections in 2009 totaled about $18.95 million, up from about $18.7 million in 2008.

The city’s tax on lodging increased from 2 percent to 3 percent on Aug. 1, 2007, so 2008 was the first full

year to fall under the current guidelines.

Through the first five months of 2010, collected taxes reflected estimated revenues of about $4.82 million.

January and February, however, traditionally are the slowest months for the tourism industry in Eureka Springs.

 

 

year-over-year revenues in 2009.

That’s according to tax figures collected by the City Advertising and Promotion Commission. Estimated revenues based on those collections in 2009 totaled about $18.95 million, up from about $18.7 million in 2008.

The city’s tax on lodging increased from 2 percent to 3 percent on Aug. 1, 2007, so 2008 was the first full

year to fall under the current guidelines.

Through the first five months of 2010, collected taxes reflected estimated revenues of about $4.82 million.

January and February, however, traditionally are the slowest months for the tourism industry in Eureka Springs.