Ashland, VA is app 15 miles north of Richmond, VA. Ashland exit off I-95 is very well developed and has all the amenities at the exit. It is only a few miles away from famous amusement park, commonly known as Kings Dominion. The I-95 transient traffic thru out the year and Kings Dominion Theme Park traffic creates significant demand from April till October. During winter months, the “Snow Birds” traffic also creates a reasonable demand for budget oriented transient guests.
Randolph Macon College is another demand generator in Ashland. It creates additional room demand during orientation, graduation and home coming events.
In addition to room revenues, a pad site in front of the property is leased, for a long term, to Yum Brands Long John Silver and Kentucky Fried Chicken (KFC) restaurants. The Lease brings in app $65,000 per year in revenues.
Currently the property is run absentee owner and managed by an on-site manager. The properties were doing very well a few years back with revenues of app $ 1.7 MM but lack of owner’s attention/interest and GM lack of interest, the revenues have been stabilized at app $ 1 MM. Between the two assets, the Days Inn is doing OK while the Super 8 is lagging behind. It is our opinion that two assets may be combined under one Days Inn franchise. The advantages of our suggested approach are:
• Reduce payroll by app $80,000 per year by eliminating one front desk.
• Just like any other interstate markets, the heavy demand months are from April thru October. If one has reasonably high room inventory, one can capitalize on revenues during high demand “Summer” months.
• Having app 200 rooms inventory, one can be a significant factor in the market amongst the economy tier properties and may even control the market and its rates. By offering rooms at a highly competitive rates, the Occupancies can be increased significantly during high demands months.
• During slower times, it may be possible to shut down one building to reduce operating expenses.
• Dealing with only one franchise and its brand standards.
