Mood Remains Positive Inside the Radisson Hotel
Despite making headlines for the wrong reasons, executives at the Menomonee Falls Radisson are confident about the hotel's future.
For many businesses, the first year of operation is difficult enough.
However, for executives at the Radisson, which opened in May, it has been fighting an uphill battle on two fronts as they work to stabilize a new business, and weather a litigation storm involving four investment partners.
Despite a difficult start for the hotel, remaining investor Jim Hayden and hotel General Manager Dan Gaab remain confident about the future of the hotel despite the cloud of controversy hovering above the business. They said, with certainty, that the lights will remain on and the hotel will stay open for years to come.
A Rough Start
In November, the Radisson made headlines for reasons no business in its infancy would want. While Gaab and Hayden have been silent throughout most of the news reports, they had a positive story to tell from a insider's perspective.
“In the next few months, you’ll see that we aren’t ignoring the problems we are having with our partners, and we are addressing that,” Hayden said. “I can firmly say we have a good working relationship with the village, and they are happy with our operations.”
The hotel’s ownership group Lodging Investors of Menomonee Falls, operated by Dean Grosskopf, is facing a civil fraud suit from investors who claim the management company diverted $1.2 million from bank accounts for two Fairfield Inn hotels in Green Bay and Beloit. Warning signs piled up as bankruptcy, foreclosures and evictions began appearing in the courts with other owners.
There are also several construction liens totaling $2.8 million in unpaid bills by the group stemming from the Radisson’s development in Menomonee Falls. In addition, the hotel was reportedly behind on its first loan payment. As a result, the village appointed a receiver to oversee the revenue stream at the hotel
Hayden said the money for the $2.8 million in construction liens was always there, but was held in escrow until work in the hotel was properly completed.
Lately, some residents have questioned the merits of using mixing the public and private sectors to fund the hotel project. The Village Board approved a $17.65 million loan in 2010 to build the hotel, and a Patch survey shows that public confidence may be wavering about the board’s decision.
However, Village Manager Mark Fitzgerald has said the appointment of a receiver was a preemptive move to protect the village’s interests in the hotel from the results of pending litigation.
“I don’t believe there is anything but an extremely remote possibility that it would be a burden on taxpayers,” said Fitzgerald in December.
It Isn't All Bad News
Gaab has had the difficult task of continuing to motivate his workers in the face of this adversity. So far, he’s been delivering.
Every guest who stays at a Radisson-Carlson owned hotel has the option to fill out a voluntary customer satisfaction survey. Since May, the hotel has received 582 survey responses, and ranks tops among 28 other Radisson hotels in the Midwest with an overall satisfaction score of 8.95 out of 10.
The score also puts the Menomonee Falls Radisson in fourth place across the United States out of more than 100 hotels, and eighth among more than 400 in the northern hemisphere.
“We’ve all been focused on providing a good product and these rankings come right from the people who stay here,” Gaab said. “Our best chance for success is to do the best job we can and keep our employees motivated.”
The high ratings are notable since the Radisson has been under the eye of a scrutinizing public, and Gaab mistakes or mixups are amplified a bit more in situations like that.
Gaab, who has opened three other hotels in his career, said the Radisson got off to a slower start because it opened in the middle of the year in 2011. Most corporate accounts book their stays at the beginning of the year, and must adhere to contractual agreements with the lodging group they plan to stay with.
Gaab said momentum would build in 2012.
“Opening when we did made it a little bit harder to get that corporate business early. But we’ve signed a lot more corporate accounts for 2012, as well as weddings,” Gaab said.
Gaab said he regularly sits down with Radisson employees to answer any questions they may have about the litigation facing the ownership group, and reassures them that things are moving forward as normal. That’s also the message for customers with doubts about the future of the hotel.
“Those are things that are outside of our control. Our responsibility is to provide the village with a well-run operation here. That was our goal when I spoke before the board in summer, and that still is,” Gaab said.
Neither Gaab nor Hayden gave specifics on the financial progress of the hotel, but they said the hotel is meeting internal expectations given the late opening date and economy. Gaab said a regular 60 percent occupancy rate is still the end goal for the staff.
The village receives regular reports on the financials from the hotel, and Menomonee Falls Patch will attempt to obtain those documents.
They didn't dodge the truth about their concern with the litigation surrounding the ownership group, but both have an optimistic outlook for the long-term. However, Gaab has realistic expectations for the first few years the hotel.
“We hope it doesn’t take long, but it’s a fact that it takes two to four years to establish your business,” Gaab said. “We hope it doesn’t take long, but it’s a fact that it takes a while to establish your business.”
Both Gaab and Heyden are optimistic that the proposed Walmart development on Main Street will also provide a nice boost for traffic and exposure of the hotel. Gaab added that the developments on Main Street appear to be headed in the right direction.