Staff Photo by Dan Henry
General Manager Tom Cupo stands in the Chattanoogan hotel and speaks about how they recently received a prestigious four diamond award.
The Chattanoogan hotel has attained four-diamond status, but the recession is taking a little shine off of business.
Tom Cupo, general manager of the city-owned hotel and conference center, said the site is experiencing new challenges because of the economy.
“We are definitely seeing an impact,” he said shortly after discussing the economy on a conference call with resort officials in other cities. “Be glad we are in Chattanooga. The bigger cities are taking a pretty major hit.”
Daisy Madison, the city of Chattanooga’s chief financial officer, said the hotel’s net income before debt service was almost $1.99 million during fiscal year 2008.
Mr. Cupo said the hotel has fared better each of the seven years it has been in business
“Revenues have improved year after year,” he said. “We exceeded the budget for last year. We crushed it at the net income level.”
However, city officials have considered selling the hotel because, although it was showing a profit, it was not making enough money to cover its portion of a $129.2 million bond issue. Records show the cost of the hotel represents about 37 percent or $47.8 million of the bond issue.
Ms. Miller said there was some initial discussion about selling the Chattanoogan, but it hasn’t moved beyond that.
“It’s not off the table, but we haven’t really been focusing on that,” she said.
The Chattanoogan is now one of 15 hotels in Tennessee to receive a AAA Four-Diamond rating for its service and amenities.
“It’s never about bricks and mortar,” Mr. Cupo said. “It’s about how we treat our guests and our clients.”
The hotel, built in 2001 at 1201 S. Broad St., was one of more than 34,000 properties inspected this year. Less than 4 percent received Four Diamond status, Mr. Cupo said.
The hotel will receive annual, surprise inspections to keep its rating.
“Once you have the Four Diamond, you have to work hard to keep it,” he said. “Hopefully we will be able to put plaques on the wall every year.”
With the 199 rooms ranging from about $149 to $199 a night, the downtown hotel has just about any amenity guests could want. There is a spa offering massages, manicures, pedicures and facials, a sauna and steam room, a weight room, lap pool, three restaurants, 17 conference rooms of various sizes, a “U.N.-style” amphitheater and a ball room.
“We’re very proud of the property,” Mr. Cupo said.
But there was controversy surrounding the facility from the beginning.
Initially, the facility lost money and was a drain on city funds. Many said a city-owned facility that did not pay property taxes should not be competing with private businesses that did.
Bob Doak, executive director of the Chattanooga Area Convention and Visitors Bureau, said the controversy has disappeared.
To level the playing field, Mr. Doak said, there were a number of mandates for the city-owned hotel, including one requiring the Chattanoogan to charge rates higher than its competitors’.
“There was some thought at the time that the city didn’t have any business competing with private enterprise, but it is not an issue now,” said Mr. Doak, who was general manager at the Chattanooga Choo-Choo when the Chattanoogan opened.
“It is a quality-run property,” he said. “It’s good for the corporate market, and it is good for the conventions when multiple hotels are needed.”