HotelNewsNow.Com Article

Film crews create hotel demand in Cleveland
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27 July 2011
By Carlo Wolff
HotelNewsNow.com contributor
carlo.wolff@gmail.com
Story Highlights

The key movie is The Avengers, a US$40-million Marvel Comics franchise.
One source says the movie business will swell occupancy levels in downtown Cleveland hotels.
In 2006, Spider-Man 3 generated 4,820 room nights in greater Cleveland hotels.

CLEVELAND—Movies under way in Cleveland could mean millions of dollars and thousands of room nights for hotels in the struggling northeast Ohio city. The Ohio Department of Development suggests they could produce close to US$5.3 million in economic activity and more than 41,000 room nights, making movies one of the biggest demand generators in Cleveland, on par with the Cleveland Clinic and Progressive Insurance.

According to Katie Sabatino, public information officer for the state development department, the figures are based on Ohio Motion Picture Tax applications. “There are plenty more film and TV projects that come to Ohio and use hotel nights that do not use the tax credit, and since there is no real film permit in Ohio—it is impossible to know exactly how many room nights are used,” she said by e-mail.

The key movie is The Avengers, a US$40-million Marvel Comics franchise that already has mounted a casting call of 2,000 for crowd scenes. It will be the largest feature film ever made in Ohio, according to the Greater Cleveland Film Commission.

In 2009, then-Governor Ted Strickland signed into law the Ohio Film Tax Credit, including US$30 million over two years, for film, television and other media productions in Ohio. Every dollar spent will generate about US$1.50 in local economic activity, according to the city’s film commission. Strickland’s successor, John Kasich, pushed hard to shift Avengers production from Detroit to Cleveland.

David Sangree, president of Lakewood, Ohio-based Hospitality & Leisure Advisors, said the movie business will swell occupancy levels in downtown Cleveland hotels for the year, and assuming crews “have a good experience, they’ll want to keep coming back,” becoming a new demand generator.

Top executives may stay at the Ritz-Carlton, Cleveland or the Renaissance Cleveland while “the lesser people may stay at the Comfort Inn or the Hampton Inn,” he said. “I’m sure the movie companies will try to negotiate packages that will guarantee a lot of room nights and that would give them a lower rate.”

“In effect, it’s like adding a new company downtown,” said Sangree, noting movies are being shot all over Ohio. “If a movie is really successful, it can generate some long-term benefits as well as short-term benefits.”

The head of the city’s film commission, Ivan Schwarz, said the hotel-spend and roomnight figures are realistic. They speak to at least seven movies in process: The Avengers; Fun Size; I, Alex Cross; Boot Tracks; Old Fashioned; Suicide Kings 2; and Liberal Arts. There is an application for an eighth, Flashback. Avengers is set to spawn 27,000 room nights; Flashback, 44. Respective expenditure figures are US$3.384 million and US$44,000.

“I’ve been talking about building an industry here, and that’s what we’re trying to do,” Schwarz said. “This is all part of it.”

Past performances
Dan Williams, VP of sales at Positively Cleveland, said that in 2006, Spider-Man 3 generated 4,820 room nights in greater Cleveland hotels. He suggested this year’s projections reflect eight movie productions at an average of 5,000 roomnights each. “I’d be a little more conservative than that, but looking at what was requested for Spider-Man,” it makes sense. “That would be phenomenal. But that’s eight movies, too. Movie crews tend to be smaller, but they stay a lot longer. For Spider-Man, there was almost a month in production,” at about 200 rooms per night.

Commission President Schwarz says there’s no formula on how many people are involved in a film production. About 3,300 room nights were generated by film productions in Cleveland last year—by three “small” films. Fun Size sports a 150-person crew, for example. “The wealth is spread,” said Schwarz. “They’re all over.”

Meanwhile, local hoteliers wouldn’t quantify revenue and roomnight projections.

Joseph Mattioli, general manager of the Ritz-Carlton, said these productions would benefit hotels accommodating stars, crews and their relatives. “As far as talking about how much this could bring dollar-wise and how many roomnights (these productions might generate), I cannot really comment. It changes. It’s not happening yet. Nothing has been decided. Those are all last-minute decisions.”

Williams, the sales chief at Positively Cleveland, the city’s convention and visitors bureau, said movie-related groups will bring steady business to the area but will “be smaller than the typical convention.

“Typically, an average convention (attendee) will stay two-and-a-half to three days. Typically, what we get for movie crews is 30 to 45 days. They also rent apartments. One of the good things about the movies when crews come in is they use a lot of food and beverage, so that’s a positive.”

There can be negatives, noted Leonard Clifton, general manager of the DoubleTree Cleveland Downtown Hotel. “Movies are a risk a lot of times unless you’re talking about an A-rated movie. They’re typically operating on funds that are being applied for through grants and funding can fall through … Unless it’s an A-rated, Hollywood, box-office Tom Cruise (-level movie)—I’m being a little old school there—you run a risk of collections. You have to make sure to secure money upfront.” At the same time, he noted Cleveland’s low rates and occupancy levels make it appealing to film crews.

Cleveland market
In Cleveland, developers recently broke ground on medical mart, a four-story showplace of medical equipment, and a connected, underground convention center. The 1-million-square-foot complex, costing taxpayers US$465 million, is scheduled to open in 2013.

“With the lack of a convention center, the market is not bearing premium dollars for rooms at the moment for large group businesses,” Clifton said. “They’re able to come into a city that is running 57% occupancy and you are obviously are going to get a much better rate than a city that is running 65% to 70% and has a full convention center doing 30 to 50 citywides a year.”

There are about 4,200 hotel rooms in downtown Cleveland, according to Positively Cleveland’s Williams.

According to STR, parent company of HotelNewsNow.com, the greater Cleveland market offers 189 hotels with more than 21,600 guestrooms. STR said overall occupancy in 2010 in greater Cleveland was 54.5%, with an ADR of US$81.92. The first three months of 2011 yielded respective figures of 47.1% and US$83.90.
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