Innkeeping

Ellsworth Milton Statler went to Port Huron, Mich., where Michigan Hotel Association members were in convention last week and explained the chief reason why innkeeping is not prospering. There are too many hotels. Hotels are built without adequate forethought or fore-consideration of a community's needs.

"No one, least of all myself would discourage the erection of a hotel when there is a need in the community for the additional rooms it will bring. But over and beyond such legitimate projects, the country is witnessing the building of scores of hotels in cities where no actual proof can be offered that the need for new hotels exists. These haphazard, over optimistic projects are the froth on the top of our present wave of prosperity. They are a menace."

Hotelmen know Mr. Statler, greyling, sexagenarian, for the most human of competitors. They know that they may come to him for advice on operating their inns. They send their sons to train in his hotels--the Hotels Statler of Buffalo, Cleveland, Detroit, and St. Louis, the Hotel Pennsylvania in Manhattan. They count on easy entree to the Hotel Statler now abuilding on Park Square, Boston. He conceals his affairs so little, that he often, without forethought has exposed to strangers confidential reports on which his associates have spent hours of labor. Yet he does not thereby endanger the success of his hotel business, for he has worked out a formula for building and operating hotels which no rival, no matter how well instructed, has been able to duplicate.

His basic business principle is: "The most service for a definite cost." The hotels he builds (it is impossible for him to operate old, unspecialized structures) are for guests expecting to pay from $3 to $5 for a room (few rooms are more expensive). For this fee he gives certain quarters (always with bath) and services. He knows that his rooms will always be 80% to 85% occupied, 60% being the average for most other hotels. (He insists on keeping some free for renovating.) The number of rooms must be large. Finally the land on which his hotels stand must not be too expensive.

It is in buying or leasing land that he finds his greatest difficulty. Realtors and mortgage underwriters dash at his office in Manhattan with flashing descriptions of their land values. Let Mr. Statler promise to build a hotel anywhere from Trenton to Tacoma. they will see that it is financed. They do not realize that he finances his new hotels from the operating profits of his old, and that, if he were to go to public financing, humanitarian that he is, he would want to be certain that not only were promoters prosperous and bondholders satisfied, but also that preferred shareholders received their dividends.

Few U. S. hotels pay dividends to their shareholders, a fact that was in Mr. Statler's mind when he ended his Port Huron talk by saying, "It is time cut-throat hotel building was stopped. New projects should be based on facts--not hopeful fancies."