Shilo Inn expects downturn in revenue
Published 4:00 am Saturday, April 6, 2002
Shilo Inn expects room revenue at the chain’s 27 bankrupt properties to decline an average of 15 percent through late May, as compared with last year.
But that won’t translate into any service changes or layoffs at the company’s Bend hotel, Shilo officials said.
The downward, ”conservative” projections range from 5 percent to 30 percent, Jamie Duckworth, chief financial officer of the Portland-based hotel chain, said during testimony at a hearing in Oregon Bankruptcy Court, according to news reports.
Jim McCulloch, Shilo’s chief operating officer, said those numbers are ”probably the worst case,” though that appears to be how room revenues are trending right now. Whether that will mean more bankruptcies in the future is unclear.
”It really depends on negotiations with the lenders on the other properties,” McCulloch said.
”Most of the bankers are working with us. Hopefully it will not result in anymore (bankruptcies). That possibility exists, though certainly it’s not imminent.”
Perhaps more worrisome to the company than the Chapter 11 bankruptcy is the 21 percent increase in hotel rooms Bend will see by the end of the year.
”All of the new properties that are planning to open that has us very concerned,” McCulloch said.
The Bend Shilo Suites Hotel is located along the Deschutes River at 3105 O.B. Riley Road. Opened in December 1992, it has 151 rooms, banquet facilities and a restaurant. Throughout Oregon, Shilo Inn operates 20 properties.
In the past month, 27 of the 46 Shilo properties, each of which operates as a separate legal entity, have sought bankruptcy protection because of stiff competition and a nine percent dip in revenue following Sept. 11.
The 27 properties, including one in Bend, operate through the same East Coast lender, with which the company has been unable to reach an accord, McCulloch said. He declined to name the lender.
Publicity surrounding the Shilo bankruptcies involving properties from Washington to Wyoming has led to some room cancellations in the past week, Duckworth said.
Shilo intends to sell two to five of the bankrupt properties, including one in Delano, Calif., for which the company has received an offer. The other potential properties for sale have not yet been identified, but McCulloch said with certainty the Bend operation won’t be one of them.
”It is true nothing is going to change (in Bend),” he said. ”We’re in the Bend market for the long run.”