Ahead of 10th anniversary, I Hotel's owner says facility a success

Ahead of 10th anniversary, I Hotel's owner says facility a success

CHAMPAIGN — Keeping the management of the I Hotel in local hands is so important to Fox/Atkins Development and partner Peter Fox that they turned down a recent offer of $19 million to buy both the hotel and adjacent Houlihan's restaurant spaces.

The prospective buyers wanted to be both owners and managers, "and we were not prepared to let them manage it," Fox said.

The I Hotel and Conference Center at 1900 S. First St., C, will mark its 10th anniversary Saturday, and Fox considers this $30 million joint venture of Fox/Atkins and the University of Illinois to be a success.

"We're really proud of the fact that we're probably on track, I would say, for the best year ever at the hotel," he said.

The five-story, 125-room hotel has had an average occupancy rate of just over 67 percent for the first seven months of this year, he said.

That tops the average occupancy rate of 52 percent for hotels countywide for January through June of this year, according to figures from Visit Champaign County.

Fox looks for the I Hotel's occupancy rate for the year to easily surpass 70 percent by Dec. 31, given a history of strong business months in September and October, he said.

The goal for the I Hotel from the start has been to make it a UI-branded property, rather than bring in a well-known hotel brand, Fox said.

Champaign-Urbana has plentiful hotel rooms on the perimeter of the community serving interstate travelers, and the I Hotel has strived to distinguish itself by serving visitors to the UI, among them alums, parents of students, professors and athletes, he said.

"What we try to do is market everything that happens at the University of Illinois," Fox said. "Intercollegiate athletics is our best customer."

One point of pride for the hotel is zero deferred maintenance, with $200,000 to $300,000 invested per year on upkeep and improvements, Fox said.

Last year, all the hotel room TVs were replaced, he said. On track for later this year is refreshing the hotel rooms with new carpeting and furnishings, "even though we think it's in great condition," Fox said.

Pending approval by the UI, the conference center will also get some new furniture and fixtures, Fox said.

The conference center, which is 100 percent-owned by the UI and managed under a long-term contract by Fox/Atkins, has returned an operating profit to the university of about $3 million over the decade, Fox said.

The center hosts weddings, plus events for the UI, Carle, Busey Bank and a number agricultural companies, Fox said, but "virtually everybody in town has used it in some capacity."

In addition to operating profits, the conference center has allowed the UI to hold events using both the center and hotel that it wouldn't otherwise have been able to hold in the community, according to Michael DeLorenzo, the UI's senior associate chancellor for administration and operations.

"In our opinion, it's been very successful," he said.

Fox/Atkins' proposed addition to the conference center is still under consideration, DeLorenzo said.

"We're working through the financials and scenarios, so we still have some work to do on that," he said.

The Houlihan's restaurant on site does "reasonably well" in a competitive market, doing about $2 million a year in sales, Fox said. Its primary purpose is to serve as an amenity for hotel and conference center guests, and "we're quite pleased with the way it's operated," he said.

Two major reasons for wanting to hang onto local management of the hotel and restaurant were making sure the jobs of employees are protected and that the experience for guests isn't diminished, Fox said.

"But if we sell it and don't manage it, they could hire or fire whoever they want and build a product that is, perhaps, substandard to the university," he said.

Fox credits employees, many of whom are long-term, with the hotel's favorable guest reviews. About one-third of the hotel's 100 staff members have been on board five years or longer, with 10 employed since year one. That includes general manager Sam Santhanam, who started off a decade ago as a conference center attendant, Fox said.

"Our goal is to never have a room out of service," Fox said. "And the corollary to that is we will not rent a room if it's not perfect."

By the numbers

$136: Average daily room rate at the I Hotel for the first seven months of 2018, with the priciest stay of the year in May, when the average room rate was $155.

80.2 percent: Highest occupancy rate so far this year, also chalked up in May. The low for this year was July at 49.8 percent.

$5 million: How much of the hotel/restaurant's $13 million development loan has been paid off to date with profits.