Chief financial officer Douglas A. Neis says in an earnings conference call that the company has approved more than $40 million worth of projects throughout its hotel and movie theater operations. "Included in that is the big Rush Street project in Chicago that will carry over into our next fiscal year," Neis says.
The commitments remains in place while Marcus Corp.'s Baymont Inns & Suites post declines in revenue and operating income, which the company blames on cutbacks in business travel. Meanwhile, the companies full-service hotels and resorts, including the renovated Hotel Phillips in Kansas City, continue to outperform their national peers, says chairman and chief executive officer Stephen H. Marcus, with revenue increasing 6% over the same quarter in 2001.
Another disparity, Marcus notes, is that newer franchises in smaller markets are doing much better than their competitors. For instance, the company's Baymont Inns & Suites in the Milwaukee area have posted double-digit revenue per available room increases, while those in the Chicago area have posted double-digit declines.
"The industry, and Baymont in particular, will continue to face challenges until business travel improves to its prior levels," Marcus says. However, he points to a recent study by consulting firm Accenture that predicts business travel is likely to increase in the next six months.
"Our assets are in great shape," says Marcus, whose firm recently completed a new parking garage for its Milwaukee Hilton property. "These properties are ready to excel when business travel improves."
Marcus Corp.'s theater operations now includes management of three ICE Development LLC locations totaling 34 screens. Formerly managed by General Cinema and Loews Cineplex, the 62nd and Western Theatre at 2258 W. 62nd St., Lawndale Theatre at 3330 W. Roosevelt Rd. and Chatham Theatre at 210 W. 87th St. are now managed by Marcus. The company already operates 83 screens in Addison, Chicago Heights, Elgin, Gurnee and Orland Park.
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