West Virginia’s Loss is Virginia’s Gain in Greenbrier Resort Dispute

May 27, 2008

A Washington-based insurance trade organization has shifted two May conferences to The Homestead, a Hot Springs, Virginia, mountain resort.

A nearby tavern is hosting sold-out dinner parties, and alcohol sales are soaring in the resort in Virginia’s Alleghany Highlands.

A West Virginia company that rents furnishings and equipment and arranges flowers for special events did the majority of its work at The Homestead resort this month.

Signs are everywhere that The Homestead is unintentionally benefiting from a messy dispute over labor conditions at The Greenbrier, a West Virginia resort about 40 miles away. At the same time, some businesses that rely on The Greenbrier’s visitors to drive sales are turning to The Homestead’s clientele until the dispute is resolved.

The Greenbrier’s problems began in late January, when nine labor contracts and one master agreement among the resort’s union employees expired. They’re still working out a contract.

Also in January, union employees, who make up two-thirds of The Greenbrier’s work force, passed an authorization to strike. That means they could walk out anytime.

That threat has been enough to force many companies that have booked two- to five-day stays at The Greenbrier to cut and run. They’re seeking alternative venues for their large-scale meetings, causing The Greenbrier to lose more than $12 million in revenue so far, Greenbrier County Commissioner Lowell Rose said.

In the past several months, some companies have turned to The Homestead, which is about 70 miles north of the Roanoke Valley, because its proximity to The Greenbrier does not significantly disrupt travel arrangements.

Homestead officials would not comment on an apparent surge in business, but it’s evident that The Greenbrier’s fall has been The Homestead’s gain.

Sales for Bath County’s accommodation category, which includes The Homestead, rose more than 35 percent during the first quarter of this year, compared with 2007, based on data from the Virginia Department of Taxation. Sales were $10.8 million, compared with $7.9 million in 2007.

Though it’s unclear whether this increase is a result of more visitors switching from The Greenbrier, The Homestead’s sales generally make up more than half of the county’s total, said Melinda Nichols, director of the Bath County Chamber of Commerce. The Homestead would not comment on the reason for the sales uptick.

Shifting a total of 800 people to The Homestead twice this month wasn’t an easy task for the Council of Insurance Agents and Brokers. But it was necessary, the council said.

One of The Greenbrier’s longtime corporate customers, the Washington, D.C.-based group booked two May meetings at The Greenbrier, where room rates start at $379. After the council’s president, Ken Crerar, learned of the resort’s labor dispute, he moved the meetings.

“No professional person in their right mind would take a large group of people to a hotel and chance having a labor walkout,” Crerar said. “We’re sort of caught in the middle.”

For members of the council, coming to The Greenbrier at least twice a year is a tradition. They have traveled there since the early 1900s, choosing the 721-room resort for its service, isolation and few distractions, Crerar said. The Greenbrier, which has a spa, three golf courses and tennis courts, was founded in 1778 in White Sulphur Springs, W.Va.

The resort is also a primary economic engine for Greenbrier County, providing 1,600 jobs during the peak season. Each year, the resort generates an average of $600,000 to $700,000 in tax revenue for the Greenbrier County Convention and Visitors Bureau. The bureau expects April revenue to be down as a result of the labor unrest, Executive Director Kara Dense said.

By June 2, Crerar has another big decision to make. He may have to move an October meeting of least 1,400 people from The Greenbrier. The 483-room Homestead cannot accommodate the large group, so Crerar said he’s already considering other options.

He’s so angry about the situation that he published a letter in several West Virginia newspapers, demanding that the union and the resort resolve their differences and move on.

But there’s not only demand for lodging at The Homestead, where room rates begin at $225. Dinner and alcohol sales have shot up for at least one nearby Hot Springs restaurant.

In the past several months, requests for banquets and related dining events at Sam Snead’s Tavern have climbed. During one April occasion, the entire tavern shut down to host a dinner for a group that originally had booked rooms at The Greenbrier, said Brandon Entsminger, a manager at the tavern. The upscale eatery is on Main Street, across from The Homestead.

“We have seen a significant increase during our slow business times because of The Greenbrier’s issues,” Entsminger said.

Entsminger attributed a 28 percent jump in alcohol sales from January through March, compared with last year, to corporate groups that have moved their business from The Greenbrier.

For other businesses, The Homestead has been providing temporary relief until The Greenbrier dispute is solved.

Duane Zobrist owns several businesses in White Sulphur Springs, including an outfitter and a limousine service. His livelihood depends on guests from The Greenbrier. During what normally is a booming time for the travel business, his sales are down 70 percent because of the resort’s labor dispute.

“This loss of business has been more impactful on us than 9/11,” said Zobrist, who has had to cut back hours or deny seasonal work to 40 to 50 of his employees. Sept. 11 “hammered us for three or four weeks while people couldn’t travel. This is long-term stuff.”

Through corporate groups staying at The Homestead, Zobrist has lately been able to pick up sales for one of his businesses, Destination Solutions. It coordinates transportation and recreation for resort visitors. Recently, he scheduled a tour of Lexington for a group visiting The Homestead.

“At this point, every little bit helps,” he said, though he still expects Destination Solutions to lose about 80 percent in revenue this year if the dispute continues.

John Gillespie, president of a flower and event company based in White Sulphur Springs, also has been following groups from The Greenbrier to The Homestead. Gillespie said his business, Gillespie’s Flowers & Productions, did the majority of its work at The Homestead this month. It sets up spaces for events from weddings to corporate functions with rental equipment and floral displays.

Gillespie would not disclose how many groups he has served at The Homestead that previously booked stays at The Greenbrier.

Yarid’s, an upscale shoe store with several West Virginia locations, including one at The Greenbrier, opened a shop at The Forum in Southwest Roanoke County in April. Katherine Yarid-Juker, co-owner, said she plans to keep her Greenbrier store, but she’s testing the Roanoke Valley market. Her trial store at The Forum is temporary, she said. She declined to comment about the situation at The Greenbrier.

For now, these businesses are riding on a hope that The Greenbrier dispute eventually will be resolved. During this otherwise peak season for tourism and business travel, they want to return to taking groups on mountain hikes and kayak trips, scheduling festivities and selling apparel and other services.

When and if that will happen is as unclear as a murky mountain stream.

“I don’t think a lot of vendors were prepared for the impact this would have,” Zobrist said.

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