Founder and CEO of Hospitality Asset Management Company (HAMCO), Mark Morath has managed hotels since the mid 1970s HAMCO, also known as Lion Country Lodging, employs more than 500 people throughout central Pennsylvania, where it has 15 hotels, and operates various restaurants, including Gigi’s Southern Table and Carnegie House in State College.
Originally from Niagara Falls, New York, Morath earned his associate degree in social science from Niagara College, and came to State College in early 1989 to manage the Sheraton Penn State on Pugh Street, converting to a Days Inn franchise in 1990. Morath has won awards, including Choice Hotels Hotelier of the Year and CBICC Business Leader of the Year. His hotels have also been recognized, including the Days Inn Penn State named Wyndham’s Hotel of the Year and the Quality Inn winning Choice Hotels’ Platinum Award as being in the top 5% of the brand’s hotels.
Morath is currently on the board of the Chamber of Business and Industry of Centre County and the Pennsylvania Tourism Signing Trust. He has also held board positions with YMCA, Centre Stage, Downtown Improvement District, and Happy Valley Adventure Bureau.
Morath sat down with Town & Gown founder Mimi Barash Coppersmith via Zoom to discuss the impact of the pandemic on the hospitality industry, the challenges the industry faces to return to normal operations and looking ahead on plans to construct a new boutique hotel on Bellefonte’s Waterfront.
Mimi: I picked you because this is a critical time in local history, for the good health of the hospitality industry overall. And I could think of no one better to join me in cruising around the challenges that we have to get back to where we were before, let alone have the average growth everybody would like to have in a normal business situation. So first, I’d like to ask you to describe the depths of the negative impact of the virus on your industry.
Mark: First of all, January, February, and part of March 2020 were some of the best months relative to the previous years that our properties in State College have had for a long time. We were on an upward trend. And we were very pleased with that. Come mid-March, everything fell out, as we all know. What it truly did to the hotel industry is that it just devastated everything that we live and stand for, from the standpoint of our room occupancy, but also our restaurants and those supplemental bars and those supplemental services that we have.
“We’re not going to catch up this year at all; we’re too far back. But with the advent of a fall season, with the students coming back totally, football season, groups can meet again, and the opportunities of the fall,” Mark Morath tells Mimi Barash Coppersmith.
Where the area would normally have 60 percent-plus overall occupancy for a year, we were down into the teens and 20s of occupancy. Now, with those couple of months that we started out with that were halfway decent, the area ended up at 36 percent for the year. It is not a survivable number.
So, with that, we did have those government programs that came along. And the first one was very important, because we didn’t know how long this was going to last. We all initially thought that it was a matter of weeks versus a year. That Payroll Protection Plan actually did help, because most of us didn’t let any employees go; we didn’t dare because we thought this was all going to end, and all those employees could come right back to work and we would pick up from where we left off. We look back now and realize how devastating it was.
We cut all of our marketing and then reduced all of our expenses everywhere we could. And then, once that funding initially ran out, we started to have our salaried personnel work hourly shifts. Our general managers were taking a shift at the front desk. Most of the hotels in the area – not all of them – stayed open during the crisis. We were always considered an essential business, so we wanted to make sure that we were there for the traveler. The government shutdowns shut all of the other local businesses down, and the travelers were basically told not to travel. SoSo, it was a very sorry period that we went through.
Mimi: Have you recovered?
Mark: No, no.
Mimi: What kind of time do you need to catch up?
Mark: We’re not going to catch up this year at all; we’re too far back. But with the advent of a fall season, with the students coming back totally, football season, groups can meet again, and the opportunities of the fall … the fall is just such a pleasant time to travel anyway. So we will be much better because of the fall.
People have a pent-up desire to travel. International travel isn’t as easy as it once was and probably will remain difficult. So, people will travel domestically. … We’re not a defined site yet to get a lot of travel, but we’re better. We have groups coming in, especially youth sports – baseball, soccer, and the like.
Mimi: Who is precipitating that activity? Is that the (Happy Valley) Adventure Bureau? How does that population get here?
Mark: Yes, they are doing a tremendous job at keeping their contacts. We’re a good tournament town. People like us. For all the reasons we all know and love about State College, our guests who come to State College enjoy those same things.
Mimi: And they’re going to be enjoying more, with all that’s happening in the county. Who would have ever believed we could have a really growing, interesting museum in Bellefonte? That’s an example. And it’s my thinking that the creation of that museum was the stimulus to wake Bellefonte up to its potential. More and more things are happening, and you and your partner have a vision of that. Tell me a little bit about your plans.
Mark: Our plan is still intact, but we’re delaying until the industry catches up, because the financial institutions aren’t totally comfortable with the hotel industry yet. They’re not quite ready to lend a lot of dollars into what it will take to build a hotel and a parking garage and then that third building, which would be residential. But we’re still attempting to do it. The plan is still there.
What I am so enthused about is, I don’t think there is a week that goes by that Bellefonte isn’t celebrating something, or a new business is opening, or [there is] an activity up there. That’s the place to be.
Mimi: It seems to have a patriotic spirit, a sense of family in the community. When do you think you’ll get digging in the ground?
Mark: Probably this next spring will be the real date.
Mimi: Can you give our readers an idea of the scope of the project? How big is it? What does it cost and what are the unique things?
Mark: That hotel is pushing $20 million; it is an 80-room facility. It will have a national franchise, which we’re not announcing yet. It will have a meeting space on the second floor overlooking Talleyrand Park on in one direction and overlooking Spring Creek on in the other. That ballroom will seat about 250. The first floor, facing the creek, would be a restaurant with outside dining. The unique thing about the outside dining is that it will be covered with a balcony, and that balcony will accommodate the ballroom that is on the second floor.
People knew and loved that creek for so many reasons, back to the days of Schnitzel’s. And having outside seating and dining, we’re trying to recreate some of that history. We want to try to build in some of that history into the different spaces, whether it’s through the names of the facilities or different areas.
The guest rooms will be oversized. They’re not all going to feature those views, but there will be the views of the creek. And then [there will be] rooms toward Talleyrand Park, which is a very attractive point of view when you’re looking at ground level. Imagine you’re up five stories, which will be our total height.
The parking garage, we think, is going to not only facilitate the hotel and its guests, and the banquet guests, but with all the different activities that Bellefonte is creating, they are often in need of parking. The courthouse is a very busy place as well.
Mimi: So, you’re going to make the parking garage larger than it would have to be just for the hotel?
Mark: That’s correct. On the first floor of the parking garage, there will be commercial space available. We believe we already have a couple of tenants very interested, because they’ll be right on that promenade that you see already. But we’ll have a secondary promenade on the deck level of the first floor. So therefore, outside they’ll have Dunlap Street on one side, and they’ll have a walkway on the other. It’s kind of like having an extra sidewalk in Bellefonte.
Mimi: Realistically, in light of all the strange things that have occurred in the last year-and-ahalf, when do you think it’ll be up and running?
Mark: Let’s assume it will take a year to build and it starts in the spring of 2022. It’ll be up and really running by the spring of 2023. It seems like a long way off, but as much as we’ve suffered over a full year, it seems like just yesterday that we started this pandemic. So, it goes quickly.
Mimi: You’re part of the proof of the American dream. Both of us are. We should be very grateful. You’ve had the benefit of a wonderful company, and country, in which you could do it. And today, I don’t know how many people have that same opportunity. Perhaps the best thing that could evolve from this pandemic is that a reasonable number of people will begin their new paths to the great American dream, instead of feeling like every single thing is broken.
Mark: Well, we need those people to start becoming very active again and starting to work. One of the biggest problems that we face is getting workers at all levels. We don’t know that it’s desperate yet, but it is close. As you go around the area, just notice the number of signs that are up.
Mimi: Of all the great organizations we have, which organization has the greatest potential to stimulate exciting new activity every day of the week in Centre County?
Mark: Being in the hotel and restaurant business, we have always thought that our business was exciting. We face new people every single day. We don’t know who those personalities necessarily are, or who are going to come and visit with us. Think of the food and beverage services; that is even a closer contact where you’re waiting on someone. And so, we’ve often said, we’ve got to be ready to dance as soon as the music starts playing, but we don’t know what tune those guests are going to play for us until they get there. We enjoy the unique activity level that is changing all the time.
But from a career path, I think all of our general managers started as either desk clerks or service people in the food and beverage side. And they’ve worked their way along and up. People that work our front desk that have that sales potential – people that can relate to others so easily – you take that person and move them into our sales offices. Oh, my, it’s marvelous to watch them perform and grow.
Mimi: What’s your outlook on downtown going forward?
Mark: Downtown is going to go through a unique change. We are bringing more and more students into our downtown community. We’re placing them in some new, beautiful buildings and facilities. I think we’re going to see more and more of that. And we’ve all worried that it is so student oriented. I’m afraid that that trend is going to continue. And maybe we’re going to have to move back a block or something and have some different types of activities and businesses.
But I think the downtown as a core will always be special to a lot of people and a lot of generations. I think those students that are enjoying it now and will enjoy it in the next few years are going to be another breed of students who are going to come back and support that downtown and other areas for years to come.
Mimi: I thank you so much for taking the time.
Mark: My pleasure.
