Sure Beats the Dorms : Hotel at Cal State Fullerton Opening New Marketing Possibilities for Chain

Just in time for the fall semester, Marriott is going to school.

On Oct. 15, the hotel chain plans to open the Fullerton Marriott--the West’s only hotel on a state university’s grounds.

With the move, Cal State Fullerton joins a handful of universities across the country that have allowed hotels to open on campus. But Bethesda, Md.-based Marriott Corp. apparently is the first major hotel chain to own an on-campus hotel.

The project, however, was long in the making. In fact, the Fullerton Marriott became a reality only after a bitter decade-long fight involving college sports enthusiasts, university faculty and developers.

The Fullerton area has been growing and “will very nicely sustain” the hotel, said Gordon Lambourne, a Marriott Corp. spokesman. “The university area is dynamic. . . . And there are a lot of visitors to the university.”

High Traffic Area

For Marriott, the location provides the six-story hotel with a steady stream of customers--traveling professors, parents, alumni and athletes--not to mention nearby businesses such as Hughes Aircraft Co., Hunt-Wesson Foods, and Beckman Instruments Inc. For the university, there is more space to host more conferences and seminars.

The $20-million property is on a 3.1-acre plot leased to the city’s Redevelopment Agency, which in turn has leased the land to Marriott. So the city and the university will get revenue from Marriott, while the hotel chain gets a long-term use of a valuable site in North Orange County. Cal State Fullerton will eventually wind up owning the hotel because under the contract the Fullerton Marriott reverts to university ownership in 70 years.

Cal State Fullerton is not the first to enter the hotel business. The basic idea dates back to the 1950s, when Cornell University and Michigan State added on-campus hotels. Today, campuses in Syracuse, N.Y.; Indianapolis; Wellesley, Mass.; and East Lansing, Mich., all boast on-premises hotels.

Time-Share Concept

And other entrepreneurs are looking to get with the school spirit. One joint venture project--Varsity Clubs of America--is planning to build high-priced hotels near major universities and sell interests in them, in arrangements similar to a time-share arrangement.

The concept, largely designed to appeal to college sports fans, would give those who bought interests in the right to stay at a hotel during specified times, with club members paying more for the most in-demand seasons.

Sports is also a drawing card at the Marriott Fullerton, which is near the site of a proposed sports complex, including a new football stadium. Construction of the complex, however, has been delayed to at least next year.

Still, Cal State Fullerton officials said they are convinced that the 10-year battle to build the hotel--overcoming lawsuits, hotel and developer pullouts and disgruntled faculty members--was worth it.

The hotel, on Nutwood Avenue just off the Orange Freeway, is an ideal use for land that was part of a parking lot, officials said. And proceeds from the facility can be used to finance the nearby sports complex.

But there were some anxious moments before the proposed hotel finally was approved three years ago.

Objections Lodged

Hilton Hotels Corp. originally was interested in the project, but dropped out in the early 1980s after an environmental group opposed the hotel and unsuccessfully tried to block it in court. That same opposition also caused a Houston developer to back out. By 1985, economic conditions for new hotels had soured.

Cal State Fullerton went back to the drawing boards in December, 1985, and Marriott Corp. rescued the project by finally agreeing to take it over.

But within a year, the hotel faced its biggest battle when Cal State Fullerton Faculty Senate criticized the development, complaining about the growth of sports on campus. Critics argued that the hotel was being built to spur construction of the sports complex.

Finally, the Faculty Senate endorsed the hotel and the sports complex by a resounding 38-4 vote and Fullerton’s Redevelopment Agency followed, giving its official nod.

The nearly completed hotel has 225 rooms--fewer than the average Marriott, which has about 400 rooms. But general manager Curtis Dean is quick to point out that it is a full-service property with the usual amenities such as a concierge’s lounge, valet parking, and restaurants.

Stiff Competition

Marriott officials declined to reveal expected revenue or the profit split with Cal State Fullerton.

Already, however, the Fullerton Marriott is looking at offering special rates to the university and negotiating with nearby businesses to guarantee overnight accommodations for employees in town for training courses.

Even so, Marriott will face some stiff competition in the North Orange County area.

The occupancy rate in the area has been only 61.5% for the first seven months of 1989, according to the accounting firm of Pannell Kerr Forster, which monitors the hotel industry. That’s far below the overall countywide occupancy rate of 71% for the same period, Pannell Kerr data shows.

The lackluster occupancy figures haven’t been helped any by the fact that new or newly renovated hotels have been opening their doors throughout the North County area.

Within the past few years, at least six hotels have opened in the areas of Fullerton, Brea, Anaheim, Anaheim Hills, Placentia and Yorba Linda, said Sandra Louvier, a hotel consulting specialist with the Costa Mesa office of Laventhol & Horwath, another accounting firm that monitors the hotel industry.

More Competition Ahead

And even more competition is on the way. Five more hotels are under construction or on the drawing boards for the area, Louvier said.

“There were 135 rooms in that market in 1986. By the end of the year, there will be 1,145,” Louvier said. “It’s going to be an extremely competitive area.”

Still, hotel experts predict that Marriott’s reputation--and nationwide reservation system--are strong drawing cards that could prove to be the key difference for the on-campus hotel.

“Put a no-name on the same site and it would be a problem,” said Rick Schwartz, manager of management advisory services with Pannell Kerr in Irvine. “For most people, that wouldn’t be the top site in town. But Marriott seems to create miracles wherever it goes. They just have tremendous drawing power.”

MARRIOTT GOES TO SCHOOL

The newly built Fullerton Marriott, opening Oct. 15 at Cal State Fullerton, will be the only hotel in the West on state university grounds.

LOCATION: 2701 E. Nutwood Ave. in Fullerton on the Cal State University campus.

CONSTRUCTION COST: $20 million.

ROOMS: 225.

RATES: $79 until the end of the year. From Jan. 1, 1990, standard weekday rate, $109; corporate rate, $99; rates for summer season undetermined.

NUMBER OF EMPLOYEES: 130.

GENERAL MANAGER: Curtis Dean.