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May the Fores Be With You

New venture locating extended-stay lodging next
to golf courses hits the sweet spot with everyone.

A few years ago, Joe Ross—an award-winning hotel entrepreneur with more than 50 years in the business—went looking for his next big adventure. And he’s found it in Fairway Suites.

The Kansas-based company puts together deals to build extended-stay hotels next to golf courses and similar attractions. And that unlocks a wave of positive benefits for everybody involved.

The hotels bring extra visitors to the courses during slower days of the week. The extended-stay facilities, which often don’t have full restaurants or other extras, make themselves more attractive because their guests can play a round of golf or eat a nice dinner in the clubhouse. Together, the two entities can attract conferences, weddings and other events.

A typical extended-stay property can draw 40,000 guests in a year. About 8 to 10 percent will use the golf course and, between facility fees and concessions, spend about $100, Ross said. And that can add hundreds of thousands of dollars to the golf course’s bottom line.

“I love selling the idea to the golf course owner and to the developer,” Ross said. “You get to give them something that’s good for everybody.”

Early on, Ross wanted to pitch the concept to a major hotel chain and was able to secure a 15-minute meeting. Those 15 minutes turned into 90, and at the end, the hotel executive called a limo for Ross and his associate. By that point, he said, “we knew it had legs.”

A Win-Win Opportunity

Ross and his team look for courses with excess land where a 100-room extended-stay hotel could be built. In most cases, not much land is required—maybe a half-acre, or about two or three times the size of a putting green.

A typical golf course comprises 150 to 200 acres, and most usually have some undeveloped land that is part of their property. In some cases, the golf course’s parking lot needs to be expanded, but not by much. The course’s clientele and the hotel guests are usually around at different times.

“I don’t think there’s a course in America where you couldn’t figure out where to put a hotel if you had to,” Ross said.

Most of the time, the developer won’t have to pay retail prices for the land. Plus, these properties usually already have the pre-existing infrastructure and utilities needed for new construction. “You can put in that hotel for seven figures less than if you built it across the street,” Ross said.

In addition to site selection, Fairway Suites handles feasibility, zoning and any other preliminary work necessary for a development to go forward. Then it hands the project over to an investor, who works with a national brand like Marriott, Intercontinental or Hilton to operate the property.

(And that’s another selling point for the golf course. The extended-stay hotel’s name usually incorporates the course’s, like the “Deer Creek Marriott.”)

Fairway Suites started up about eight years ago. It’s had early success, including a thriving extended-stay facility in Overland Park, Kansas. The company also has encountered some setbacks, too. The Great Recession halted practically all hotel development nationally for a few years. Ross also cut back so he could care for his wife, Bonnie Joe, who recently passed away.

“I decided it was more important to be with her than build a new hotel development,” he said.

But Ross and his team are back at full gear, prospecting for potential development sites across the country. It helps that their first project has helped generate huge income for the neighboring golf course while maintaining a higher-than-average occupancy rate, even during the worst economic downturn.

So far, Fairway Suites has deals in the works in South Dakota, Illinois and Colorado.

“We are presently in the process of locating golf courses that are in good markets that have good occupancies,” Ross said.

‘I Love Hotels’

How big is Fairway Suites’ opportunity? The United States has about 15,000 golf courses. A consultant who looked into the market said that almost 70 percent of the country’s courses had the potential for a Fairway Suites-type development, Ross said.

Not all of them are a good fit, of course. Some higher-end country clubs aren’t interested. But many courses are owned by city and county agencies that are eager for new sources of revenue.

Ross first went to work in the hotel industry in the 1960s, when he joined a hotel in the Kansas City suburbs. Twelve years later, he was in a position to buy it. That was the start of a career that would encompass 54 properties that Ross owned or operated.

“I love hotels in general, period,” Ross said. “You’re in the people business. You’re dealing with a lot of customers and employees, and I always enjoyed my relationship with both. It was kind of a dream job for me.”

He’s excited to pursue a new concept in the industry that he loves so much.

“Fairway Suites is an absolute dream come true,” said Ross.