Closing the Gap

As a visitor destination, Durham has been exceeding the benchmarks for its peer group but for one area. Until now, having 1/4th to 1/3rd the number of guest rooms Downtown has been a drawback.

Now that issue has reached the proverbial “Tipping Point” to use a Malcolm Gladwell term. The Durham Marriott has stood adjacent to the Durham Civic Center for 18 years. Being next to the Durham Civic Center, Carolina Theater, and Brightleaf District would seem enough to guarantee success, but it hasn’t. Now all that begins to change with the announcement by Greenfire Development and Lifestyle Hospitality for a 110-room boutique hotel in the historic Hill Building, formerly CCB, then SunTrust, just across the CCB Square from the Durham Marriott and the Durham Civic Center.

Hotels are like fast-food joints and convenience stores (almost wrote “service stations,” a blast from the past). They work best in clusters. That creates synergy. Even if the current wave of redevelopment Downtown had never blossomed, more guest rooms in that area would have generated success. It’s just that much better now.

I remember learning this principle of supply and demand many years ago. Airlines were regulated. CVBs and their cities had to bid to the Federal Government to get additional carriers or routes for carriers. An executive with the “first” Frontier Airlines told me that, when a second carrier is added to a route between two cities, the number of travelers will increase, even though the existing carrier had a lot of empty seats.

I predict several more hotels will develop Downtown in the next few years, and this is both a blessing and a challenge for DCVB. It’s a blessing because it adds a dimension to our ability to draw interest from both leisure travelers and conventions. It’s a challenge because every one of these new hotels will come out of the “box” empty. Not only that but, different than even spec official building, which can rely on long-term leases, at the beginning of every year, Durham starts at “0” for visitors and has to not only exceed the prior year but make up the entire gap.

That’s what so much fun about destination marketing.