HOME COURT ADVANTAGE

BACKGROUND

The Terre Haute Sheraton Hotel was opened by Michael Bonewitz in 1974 at 555 South Third Street (US 41). He knew hotel franchising and the local hospitality market. Bonewitz developed in 1964 and operated the Travelodge that was across the street from the Sheraton. After a feasibility study and with his prior experience in the Terre Haute market, Bonewitz built the 102 room, full service Sheraton facility. This was his first experience with Sheraton but he built and owned several Travelodge properties throughout the Midwest.

The hotel provided many services for guests. Besides the 102 rooms, there was a very nice dining room and an adjacent lounge with a removable wall that enabled expanded seating for live lounge entertainment for after dining enjoyment. A banquet room with a 250 seating capacity was available for meetings, conferences, and conventions. An outdoor swimming pool was another amenity for guests. Bonewitz cross-sold the Sheraton guest services, for example food, beverage, meeting facilities, to his Travelodge guest. The Sheraton investment proved successful for Bonewitz. Bonewitz decided in 1986 to sell the Sheraton to a group lead by local businessman Max Gibson and Larry Bird

Max Gibson has been a confidant, advisor, and close friend of Larry Bird for many years. Gibson is a successful Terre Haute businessman with ownership of a large, diversified company. He has been very active in community projects and knew the market area well. The Bird-Gibson partnership was very logical. With Bird, Gibson could diversify his business interest further and bring a high profile "product" back to Terre Haute. With Gibson, Bird could accomplish what he wanted- to have "someplace for people to see and to enjoy trophies and other items" and to continue his playing career in Boston.

The Terre Haute Sheraton was purchased in 1986 by the Gibson-Bird group. The new owners quickly planned and implemented changes. The theme and motif were associated with Larry Bird and the Boston Celtics. The Sheraton franchise was canceled. The property became independent (not franchised), and named Larry Birdís Boston Connection. Certainly the area market related to the new name since they had a "Boston connection", beginning with the 1979-80 basketball season.

Renovation and other modifications included changes in most areas of the hotel. Pictures, articles, awards (including NBA MVP trophy), and memorabilia appear throughout the public areas of the hotel. Inside the main entrance into the lobby, guests were greeted by a life-size silhouette of Bird in a Celtic uniform (#33) shooting a jump shoot and the lobby area had

parquet flooring (a la the Boston Garden). The Sheraton lounge was changed to the MVP Room that offers gourmet dining at lunch and dinner. This is available to overnight hotel guests without additional charge or to club members for an annual fee ($133).

Just off the lobby area is the restaurant that was named The Boston Garden. This area is more than enjoying a good meal. It is an event! A basketball goal and a small hardwood court were constructed for those who would like to play on Larry Birdís "home court". A net was erected, apparently to protect restaurant guests dining from those who do not shoot with the accuracy of their host. The new owners changed the Sheraton banquet rooms to a sports bar. The Bird Nest Lounge is a popular sports bar with televisions (of course watching Bird play for the Celtics and later coaching the Pacers), drinks, and a limited food menu.

The Sheraton had 102 hotel rooms but with renovation and for a new "product" some rooms were changed to alternate uses. A Gift Shop that was a hotel room opened just off the lobby area. The Boston Connection was an authorized NBA merchandise outlet. These items and Bird-related memorabilia were sold in the Gift Shop. Three hotel rooms were enlarged and became suites. Small meeting rooms and a travel agency (Travel Connection) were added that attributed to an additional loss of available hotel rooms.

With the change of the banquet rooms to The Bird Nest Lounge, the Boston Connection was without such a facility until 1992. Adjacent to the hotel a single-story office building was leased to an insurance agency and owned by the hotel. In 1992 the lease was not renewed. The hotel renovated and expanded the building and opened it as the Boston Connection Conference Center. The Conference Center is used for meetings, conferences, banquets, and conventions. The facility has 3 rooms, varying in size, and can be opened to one large room accommodating 320 people. A full service kitchen was added during the renovation.

LARRY BIRDíS HOME COURT

With Larryís move in May 1997 from Boston Celtics executive to the Indiana Pacers coach, the local interest and association in the Celtcs changed too. This provided the hotel an opportunity to reposition and further differentiate the property in the market. In the summer 1998, the owners of Larry Birdís Boston Connection changed the name of the hotel to Larry Birdís Home Court. The name, Home Court, broadens the appeal and is identified with any team that Larry has played for or coach. The name was not the only change considered. The Gibsons and the Birds considered seeking a franchise. Those that were considered included Marriott, Ramada, Best Western. The final decision was to be an independent hotel and focus on their own distinctive image and capabilities.

Renovation has been completed to reflect the new name. Signage, at the hotel and roadside billboards, has been changed. The lobby parquet flooring and the #33 Boston Celtics silhouette have been removed. A fewer less important pictures have been taken off the walls. The Gift Shop carries only Larryís memorabilia, logo, and novelty items, and have discontinued the affiliation and sales of NBA merchandise. Consideration is being given to a name to the Boston Garden Restaurant to possibly just The Garden or The Legend Restaurant and a name change for the Conference Center. No change is planned to the MVP Room and the Bird Nest Lounge since those names have generic identifications.

The target market for the Home Court is corporate business. This is primarily for hotel rooms, F&B, and meetings. Sports fans are an important segment as well, particularly for rooms and F&B. The product offered is obviously a full service, independently owned and operated hotel that gives the latitude for uniqueness and local decisions. With the name change to Home Court and the return of Bird to Indiana, the hotel is attempting to elevate their status capitalizing on a nationally and internationally known sports celebrity.

The Home Court is located two miles north of the US 41 and I-70 interchange on Third Street (US 41). Wabash Avenue (US 40 and at city center) is five blocks north and Indiana State University six blocks. Being located near the city center and ISU (10,700 students and 1,760 employees) is an advantage. However, two miles from the I-70 interchange and that highly developed area is a major disadvantage. Four franchise hotels are located at the

interchange, one next to each of the four (exit or entrance) ramps. Two blocks south of US 41 and I-70 is a 90 store retail mall. Many other retail shops and business offices are in the area.

The Home Court is competitively priced. Double and king hotel rooms for one person are priced at a rack rate (maximum daily rate) of $65 and $72, respectively. A 10 percent discount for American Automobile Association (AAA) or American Association of Retired Persons (AARP) members are offered. A flat corporate rate for the same rooms is $58. The three suites range in price from $107 to $150. The Conference Center with 320 seating capacity is priced from $75 to $600 per day depending on the room or length of time rented. With food service in the Center, there is not a room rental fee. The food and beverage for the restaurant, lounge, and catering are competitively priced.

THE COMPETITION

With 1,672 rooms at 17 hotels/motels and over 200 restaurants, the hospitality industry is a large factor in the Terre Haute retail economy. While this adds to the economy and to the offerings to the consumer, the hospitality market is highly competitive. The only other full service hotel in Terre Haute and primary competitor of the Home Court is the Holiday Inn. Built in the early 1960s, the Holiday Inn has made several additions (hotel rooms, Holidome). The hotel has 230 rooms, the Sycamore Grove Restaurant, the Apple Club Lounge, indoor swimming pool, and meeting facilities accommodating up to 500 people.

The hotel continues to be owned by the original developer who has 10 other properties (not all Holiday Inns), all in Indiana. The management of the Terre Haute hotel has been with the company for many years. They know the hospitality industry and local market.

The competitive advantages that the Holiday Inn has are their location and a franchise affiliate. The hotel is located at the interchange of US 41 and I-70, which is a high traffic area, and is easily accessible from both highways. Within a two minute drive or a short walk, there is a large retail mall. Other shops, restaurants, and activities are in the immediate area. As a franchise hotel, the facility has an international reservation network for referrals (at a fee) and the benefit of international advertising (at a fee) for the travelers (transient or Terre Haute as a destination). In addition, the Terre Haute hotel uses local print and electronic media for their advertising.

The hotel is not generally as competitive with their pricing as the Home Court. The premium pricing might be attributed to their location and by being a franchise hotel. The daily rack rate for all rooms is $89 with a 10 percent discount for AAA or AARP members and a corporate rate of $69. The daily meeting room rental rate range from $75 to $1,000 and adjusted if functions include a meal. The F&B pricing is competitive in the restaurant and lounge and for catering functions.

 

 

Adapted from the case Larry Birdís Home Court (1998) Bob Green, Assistant Professor of Marketing at Indiana State University