Despite wide-ranging budget cuts last year, The Statler Hotel, one of the largest enterprise units on campus, retained most of its services and amenities during the recent 18-month recession. 

Enterprise units generally rely on revenues they generate independently, rather than on Cornell’s operating budget, granting the option to tap into reserve funds and fend off major staffing cuts during tough economic times. 

Richard Adie ’75, general manager of The Statler, explained that the hotel’s financial independence gave it the flexibility to retain services and most of its staff. During normal years, extra revenues are put aside for periodic renovations; this past year, the hotel has not been saving as much. 

“The University does not provide any funding ... so [the budget cuts] had no impact on the hotel,” Adie said. “[However,] we had to tailor [what we put in] our reserve accounts for future renovations, so some things we want to do in the next couple of years may have to wait three to four years ... such as the Regent Lounge Bar and the lobby.” 

Since staff wages are determined by University human resource policies, The Statler had to reduce its temporary student hiring this past year — one of the easiest ways to cut its operating budget. The hotel does not gain much from most of the student employees, as students are primarily employed for educational purposes, Adie said. 

“Every student who works at the hotel is paid, so it’s a misconception [that they are cheap labor],” Adie said. “The students are really here for an exposure program, so we save nothing by having the students ... They are paid a normal wage, just like other student employees on campus ... we actually have about 200 part-time students [who work] here.” 

Nonetheless, The Statler was still affected by the slowing economy. According to Adie, The Statler was forced to keep its prices the same over the past year as occupancy declined. 

“During the fiscal year that ended this June, we didn’t raise prices ... Average daily rate is around $210,” Adie said. “We normally adjust two to four percent [as in years past], which is in line with the salary increases that our staff got during that period of time. These are all economic decisions — we price depending on where the market is.” 

According to Adie, although industry-wide occupancy decreased by 12 to 15 percent during the recession, occupancy at The Statler only dropped by eight percent because it caters to a niche market of recruiters, parents, conference attendees, and alumni. 

Fred Bonn, director of the Ithaca/Tompkins County Convention and Visitors Bureau, said he is proud of local hotels’ performance in the past year. 

“The fact is, we are smoking the rest of the state on a [hospitality] performance basis ... [and] the Statler holds a premier location in the marketplace,” Bonn said. “Year-to-date, as of August, the occupancy for Tompkins County was 62.7 percent; the RevPAR [revenue per available room, an important metric for measuring hotel financial stability] is $78.32 ... up 7.8 percent from 2009.” 

Bonn attributed his statistics to Smith Travel Research, an independent company that collects data for the hospitality industry. Bonn cited more data in support of his assessment. 

“The average daily rate [for Tompkins County] is $124.94 through August 2009 and $127.26 [for 2008]... [which] is only a 1.4 percent fall,” Bonn added. “During the same time, some markets in New York State dropped as much as 20 percent.” 

When asked what she thought about The Statler’s revenue decrease, Prof. Sheryl Kimes, operations management, gave a more optimistic assessment  of The Statler’s performance relative to national averages. Through her research, Kimes found that some hotels had revenue decreases of 25 to 30 percent last year.  

“It was not too bad [for The Statler],” Kimes said. “They had higher occupancy in previous years, but given the economy and everything, that’s not bad ... Statler is in a great location because you still have recruiters coming to town and parents visiting their kids, so we have probably more stable demand generators than places like New York City.” 

However, Kimes emphasized that student employment is definitely a huge cost for The Statler, which partially explains why it is so expensive to stay there. 

“A lot of our students work over there, so it’s one of the problems they face,” Kimes said. “They are probably more heavily staffed than a normal hotel would be ... but we want to do that because we want students to gain experience ... so their training costs would probably be higher as well.” 

Nonetheless, Adie said he believes that the economy is turning around and that operations at the Statler Hotel will return to normal. 

“We’ve been seeing that most of the hospitality industry, as with other businesses, is on the uptick again,” Adie said. “Recruiters are returning to campus, so things seem to be positive at this point. It’s not as gloomy as it was two years ago.”