At the University of Mississippi—Ole Miss to those who know her—the start of football season is the biggest event of the year. With a stadium that can accommodate more than 64,000 revelers and a 115-plus-year history, the Ole Miss Rebels are a major tourism draw for Oxford, Miss., every September, and a major driver for the local hotels.
At the Graduate Oxford, football season also often means full occupancy. Tim Franzen, president of Graduate Hotels, says that this year, guests were booking hotel rooms the night of Feb. 29 to ensure that they would be first in line—physically, in the lobby—when booking for football season became available at midnight March 1. “They’re definitely passionate fans,” Franzen says.
With such a loyal customer base, the university marketplace can be extremely lucrative for hoteliers. Graduate Hotels, a lifestyle brand that concentrates its development efforts in university towns throughout the United States, currently has six properties and an additional four set to open over the next year. Franzen notes that Graduate hopes to have 20 properties open in the next three to four years. The brand celebrates the uniqueness of each town, using the design of the property to reflect the personality and culture of the community. For example, the Graduate Hotel Madison, in Wisconsin, has chandeliers made from canoes and oars, representing the community’s connection to the great outdoors.
Tying a hotel to its community is the most important aspect of developing in a university marketplace. This is because it’s the community that drives business, not necessarily the university itself. In fact, Graduate doesn’t pursue properties in university towns that have nothing but the school to offer. “Even if a school has a beautiful campus and very loyal alumni, that’s not enough,” Franzen says. “We look to develop in areas that have additional drivers, like maybe there’s a large medical institution nearby, or it’s the state capital. There have to be other factors driving people to this town.”
And new brands are taking notice of these diverse drivers. In addition to Graduate Hotels, a new luxury brand, Chancellor’s House, is looking to grow its pipeline in university markets. The first Chancellor’s House, which is also located in Oxford, Miss., offers amenities and services that can only be described as “super high-end,” such as butler service, handmade mahogany dog kennels from Jamaica with custom name plates for guests’ pets, and the ability to book private jets on a moment’s notice. Fred Alias, president and COO of Chancellor’s House Management Group, explains the impetus behind launching its new brand in Oxford. “If you’re in a major college market, you will sell out on a big football weekend. What is more important is finding a location where there’s something of significance happening most of the year. Many of our guests couldn’t care less about going to a football game, but know that they’re going to a destination.”
When it comes to Oxford, this approach paid off. Travelers from all over Mississippi, Alabama, and the Memphis area all head to Oxford for a getaway weekend. The town offers excellent dining, music and food festivals, quail and duck hunting, and other local events that lead to sell outs completely unrelated to the university.
Despite its immense potential, as it stands now, the U.S. university marketplace leans more heavily toward branded properties and is under-tapped when it comes to independent, boutique, and lifestyle properties. “There have always been independent hotels in these markets, but no one was really paying attention to them on an industry level,” Franzen describes. “The hotels we own today, they had small owner/operators, some more sophisticated than others, that were really letting the location of the hotel do all the work for them. There is definitely room to improve and upgrade hotels like those, that have a great location in a solid market, but don’t necessarily offer the experience guests are looking for today.”
Alias agrees with Franzen. “We’ve identified 25 locations in the United States that would be a good fit for what Chancellor’s House is offering. It’s not an oversaturated market at this point, and we look forward to seeing what it becomes,” he adds.
Both Franzen and Alais expect to see more independent and boutique properties enter the university marketplace over the next few years, not just from hoteliers, but other entities like mixed-use and student housing developers looking to capitalize on this strong and steady market.
“This is why we’ve been moving so quickly,” Franzen explains. “We wanted to be among the first movers and get the best sites that we could right away. We know there’s going to be some competition. We just want to be as far ahead of them as we can.”
