Arkansas State University’s new hospitality management program has plenty of vacancies, partly because few students know about it: Officials are waiting for a $50 million billboard to point to.
A-State announced its academic emphasis on hospitality studies at the same time plans were revealed for a 203-room hotel, convention center and Houlihan’s restaurant on the Jonesboro campus. Beyond being a commercial enterprise, the complex is envisioned as a kind of hands-on laboratory for the growing field of hospitality management, and an advertisement for the A-State program.
For now, though, the 11-acre site for the Embassy Suites by Hilton and Red Wolf Convention Center near the university’s football stadium remains an empty field, except for a few rolls of chain-link fencing, even though preliminary plans were announced as early as 2013.
“We haven’t promoted the program a whole lot in advance of the convention center being built,” said Professor Melodie Philhours, chair of A-State’s department of management and marketing. “That will be a key for us, and as the convention center moves forward we will start to promote the program more and get the students into the pipeline with training and internships.” For now, the program has fewer than a dozen students.
Construction has been snagged by design details, according to project developer Tim O’Reilly of O’Reilly Hospitality Management of Springfield, Missouri. “The design of these big projects just sometimes takes longer than we would hope,” O’Reilly said in an email to Arkansas Business.
Site work was expected to start in the third quarter of last year, and O’Reilly said in February the start would come in mid-April. As that deadline passed, O’Reilly said he was waiting for the city of Jonesboro’s final approval of architectural plans, which call for 40,000 SF of convention and meeting space. Killian Construction Co. of Springfield is lining up subcontractors with a groundbreaking expected soon, O’Reilly said.
Construction could take up to 18 months, but A-State officials say the delays have caused no real problems. “We’ve been gearing up well ahead of this, and the fact that it has taken a little longer really hasn’t changed anything from our standpoint,” Philhours said.
A competing convention center near Interstate 555 in Jonesboro appears to be in deep trouble just eight months after breaking ground. The Hyatt Place Hotel & Convention Center, unaffiliated with A-State, faces nearly $900,000 in liens from unpaid contractors.
A-State sees the Embassy Suites project as a place where students can serve as interns, absorbing hotel and restaurant operations and working closely with hotel, restaurant and convention marketing executives.
Philhours said that the hospitality management emphasis was designed to be ramped up slowly. “Now we’re offering a management degree with an emphasis on hospitality management,” rather than a specific major in hospitality. “That is a typical way we start our programs,” Philhours said, citing a degree program in global supply chain management that began, like hospitality, as an area of emphasis for a more general management diploma.
No specific construction start or completion date was ever set for the hotel and convention center at Red Wolf Boulevard and Alumni Drive, said Jeff Hankins, A-State’s vice president for strategic communications and economic development. “I wouldn’t characterize it as delays,” he wrote in an email. “O’Reilly Hospitality is awaiting approval from the city to begin construction, and then a completion timetable will be established. With these new facilities, the quality Embassy Suites brand and the O’Reilly Hospitality Partnership, we believe the hospitality management program will help us to recruit and educate students interested in this growing professional field.”
$6 Billion Industry
Hospitality is a $6 billion industry in Arkansas, second only to agriculture, and it employs more than 100,000 Arkansans. That’s about 9 percent of the workforce, according to Rolf Wilkin, founder of northwest Arkansas’ Eureka Pizza chain and the new chairman of the Arkansas Hospitality Association board.
Nationwide, nearly 13 million people work in the industry, according to figures from the Bureau of Labor Statistics, and hundreds of thousands of those jobs are in management.
Hospitality education programs, particularly focusing on the culinary arts, have also surged in Arkansas and nationwide. Pulaski Technical College, Northwest Arkansas Community College and Ozarka College in Melbourne were among the early leaders in the state.
A-State hopes to offer the added dimensions of hotel management and convention marketing, following the lead of top hospitality programs like those at Michigan State, which founded its School of Hospitality Business in 1927; Cornell University; the University of Nevada at Las Vegas; and Virginia Tech.
Graduates compete for management jobs at not just hotels and restaurants, but also at event-planning firms, theme parks, resorts, tourism agencies, cruise lines and casinos.
“It’s a growing and particularly relevant field in Arkansas and around the world,” Philhours said. “We’ve looked at what other universities have done and talked to many professionals. A lot of our alumni in the business world have expressed interest in helping. We anticipate that when the convention center opens, our students will get to know every operation, from housekeeping and maintenance to accounting, customer service, sales and marketing.”
Many of the academic details of the hospitality program are already in place at A-State, and Philhours, who has taught at the university for 32 years, said the course of study will include a heavier load of internships.
“When conversation first began about a convention center on campus, we realized it would be an opportunity for the university and an opportunity for our students,” she said. “We can offer students another avenue of specialization, with a management degree and additional training and internships focused on hospitality. We’ll be offering courses in hospitality law and hospitality accounting, courses specializing in advertising for hotels and conventions. This all fits in perfectly with the College of Business.”
O’Reilly’s Jonesboro Hotel Partners LLC will operate the convention center, leasing space from Arkansas State, which will not charge rent for the first three years. Afterward, the lease calls for the university to collect $250,000 a year through the ninth year of operation, plus 10 percent of revenue. For the 10th year and thereafter, rent increases will be based on the Consumer Price Index.
The campus complex, which will include 40,000 SF of meeting space, will go up whether or not a crosstown rival rises, O’Reilly said. Feasibility studies have suggested that one convention center could contribute as much as $50 million a year to the local economy, but that figure doesn’t factor in the effects of a convention competitor.
The other planned complex, the $30 million Hyatt Place Hotel & Convention Center on Browns Lane Access Road, has raised “some serious red flags” by failing to pay contractors. The Hyatt project is backed by the Jonesboro Advertising & Promotion Commission, which appears ready to rescind a funding agreement if developer Chris Keller doesn’t answer questions soon about his financing.
“Our project is of a different size, and a different scope,” O’Reilly said. While the campus project is likely to focus on attracting academic conferences and athletic events, O’Reilly said officials are eager to accommodate all customers. “Our target is everything,” he told Arkansas Business. “Every piece of business we can book.”
Questions about the competing center are beside the point for Arkansas State officials, even though the loss of one convention project might be seen as the other’s gain. Concerns have been raised on whether a city of 75,000 can support two convention centers, even in an outsize regional commercial hub like Jonesboro. “We remain confident that the convention center and hotel site on the A-State campus is ideal for the region, city and university,” Hankins said, noting that it is adjacent to the university’s Convocation Center, Fowler Center for performing arts and Centennial Bank Stadium. “The campus site is also the most suitable one for our students and faculty who will be involved with the hospitality management program.”