THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Wednesday, March 22, 1995 TAG: 9503210267
SECTION: MILITARY NEWS PAGE: A12 EDITION: FINAL
SOURCE: TOM PHILPOTT
LENGTH: Medium: 72 lines
Sgt. Ryan Schwankhart smiled when he saw his room Feb. 24 at the Army's new Shades of Green resort in Orlando, Fla. Four years of soldiering, he said, ``finally paid off.''
Only a week earlier, Schwankhart, 25, had been on night exercise at Fort Lewis, Wash., ``eating MREs (Meals Ready-to-Eat) by chem-light in the snow.'' Now, his family had first-class accommodations inside Disney World, in peak season, at the rock-bottom rate of $49 a night.
``It's a very big morale booster,'' he said by phone before a round of golf. ``I'll be away from my family 40 days, starting next month. This is something I'll take with me when I'm gone.''
Schwankhart wants to return in three years. Trouble is, the military hotel might not be there. Shades of Green has a river of red ink. It lost roughly $1 million through its first year, which ended Jan. 31. The Army had projected first-year profits of $1.1 million.
The Defense Department's inspector general, in a new report, says the resort is insolvent, with liabilities exceeding assets by $2.6 million. The inspector general also warns of risk to the Army Morale, Welfare and Recreation Fund from the 100-year lease signed in September 1993.
The Army will decide within a few months whether to terminate the lease and close the hotel, said Peter F. Isaacs, hospitality director for the Army Community Family Support Center in Alexandria, Va.
The other option, one Isaacs favors, is to buy the hotel and prepay all land rent.
Isaacs could not disclose the negotiated purchase price but described it as ``very favorable.'' One source said it's below $45 million, the appraised value of hotel and property.
Shades of Green, formerly the Disney Inn, has 288 rooms, each with two queen-size beds and a pullout sofa, along with two swimming pools, two restaurants and a ticket office for local attractions. Any service member, dependent, retiree or Department of Defense civilian can make reservations.
One E-5 interviewed had arrived with a party of 10, including his wife's sister and husband, their children and two mothers-in-law.
The hotel takes reservations on a first-come, first-serve basis. Rates are set by rank, into four categories, from $49 for junior enlisted up to $92 for senior officers.
Isaacs blames himself for the faulty profit projections. The big error, he said, was underestimating demand among junior and midgrade enlisted members and junior officers. He expected 30 percent of guests to come from the two lower-rate categories. The actual figure is over 60 percent.
``Obviously, that significantly reduces revenue.''
The hotel last year turned away 50,000 room nights of business. ``Sixty-five percent of our next full year's room availability is already booked,'' Isaacs said. ``That's double the industry average, so clearly there's a demand.''
The problem is the rent, Isaacs said, and the best way to avoid it is to buy the hotel. But the inspector general advises against it. The tone of the report is that Army officials were overmatched in negotiating with the hotel's owner, Palm Hospitality Company, an affiliate of the Walt Disney Company.
The Army rejects the report's recommendations to raise room rates and screen reservations by rank, he said, ``just to reduce our negative cash flow. The Army is willing to accept a minor cash loss for a short period to advantage those junior soldiers and their families.''
The losses will be covered by profits from the Army's four other hotels, one each in Hawaii and South Korea, and two in Germany, Isaacs said.
Optimists still can make reservations at Shades of Green by calling: (407) 824-3600. MEMO: Military Update by Tom Philpott appears monthly in The Virginian-Pilot.
To comment, write P.O. Box 1230, Centreville, Va. 22020. by CNB