AUBURN UNIVERSITY’S ACADEMIC BUSINESS PLAN:

GULF STATE PARK HOTEL

May 17, 2005

Executive Summary

In 2004, the Alabama Department of Conservation and Natural Resources (DCNR) invited Auburn University (AU) to partner with the state in building and operating a resort hotel on DCNR land in Gulf Shores. The state had tried for several years to replace an aging and unattractive lodge, on a beautiful oceanfront location, with a facility which would better attract business currently defecting to other Gulf-front states.

Because Auburn University, as Alabama’s largest university, already has a successful public/private model for owning and operating an in-town hotel with West Paces Hotel Group (WPHG) in Auburn, and an innovative hotel/restaurant management education program in place with that hotel, AU is a logical education partner for the state. Further, the university already operates two maritime and marine biology programs in the Gulf area, and has an extensive academic and public interest in environmental sustainability. Finally, AU’s land grant mission calls it continually to enhance and expand its efforts to help the state grow economically.

The DCNR has as part of its own mission to educate the state’s citizens regarding its natural resources, including the protection and use of those resources. Combining the educational commitment of both the DCNR and AU creates a synergistic development opportunity. With Florida having experienced uncontrolled growth in its Gulf destinations, and Mississippi relying heavily on gaming as its Gulf tourism attraction, Alabama’s Gulf resort promises guests a serene natural environment surrounded by protected lands and waterways, miles of undeveloped beach, and replete with opportunities for learning. In short, AU adds an academic dimension to a resort location already unique in its ability to enhance and enrich the guest, resident, and visitor experience, while protecting the natural environment and contributing to the health and well-being of all who visit.

To that experience and economic impact – conservatively estimated at more than $65 million annually five years after build-out – Auburn adds the ability to offer students a hands-on, real-world education experience that will also help stabilize the hotel and Gulf area workforce year-round.

I. Scenario

A. The Need and the Response

As one of the country’s preeminent land grant institutions, explicit in Auburn University’s mission is its mandate to serve the citizens of Alabama through instruction, research and outreach, with a goal of preparing Alabamians to respond successfully to the challenges of a global economy. A major component of the state economy is its service and hospitality sector. Thus, the ability to instruct university students through involvement in a major resort that would benefit Alabama’s economy would provide an unsurpassed, real-world “learning laboratory.” The involvement of those students, in turn, would benefit the state.

Currently, the Auburn University Hotel and Dixon Conference Center already represents the region’s most successful educational partnership between a major university and a for-profit hospitality enterprise. The 247 room Auburn hotel is a perfect precursor to the creation and development of a larger resort. The proximity of the AU Hotel to the campus allows for the establishment of academic programs which, after years of fine tuning, are now duplicable and expandable at a larger resort further away from campus.

AU has a proven, historical track record as a catalyst for economic development, promoting and providing training for statewide industries including technology, business, construction, public administration and science. For a century and a half, Auburn extension and outreach has improved the quality of life for citizens in all areas of Alabama. AU’s economic impact on the state, in fact, exceeds $4 billion a year. The development of a hotel in the state’s most popular tourist region would continue this benefit, yielding even stronger vocational, educational and economic benefit.

B. Actions to Date

First and foremost, Auburn has focused on developing the educational aspects and potential of this project, as outlined in this plan. Second, Auburn has worked with the DCNR to design and implement an architectural, organizational, and legal structure for operation of a university-developed resort and conference center on Conservation-owned land. Finally, to attract the best qualified, most appropriate developer to finance and construct the resort and conference center, AU has produced and distributed a “Request for Information,” held a public meeting for interested developers, and reviewed responses to the RFI.

Next, AU will release a “Request for Proposal” (RFP) to attract the ideal development team, continuing its efforts to successfully develop this educational opportunity. The RFP will describe the fundamental details of the project and invite developers to submit final proposals from which AU and the state will select a development partner.

C. Other Participants

In addition to the developer selected to build the resort, other educational institutions in the area, and area hotels and businesses, AU is joined in the Gulf project by multiple parties and constituencies, each with a different focus but similar objectives:

· Department of Conservation and Natural Resources. The DCNR is the entity that owns the land, from whom AU will acquire the leasehold interest for construction of the resort. The DCNR, like AU, also has an educational aspect to its mission of safeguarding the state’s resources: to teach Alabamians about the importance of environmental conservation. DCNR and AU joining together to advance these educational objectives creates greater effectiveness for both entities.

· Gulf area citizenry and businesses. The various local mayors and councils, the Gulf Unified Metro Business Organization, the Gulf Coast Convention and Visitors Bureau, and local, state, and national governmental representatives have worked for several years to develop a resort at the Gulf State Park. AU recognizes that the success of the project, educationally and economically, is tied to collaboration with community groups and area residents.

· West Paces Hotel Group. AU’s established and successful partnership with WPHG in the operation of the AU Hotel and Dixon Conference center is based on a commitment to the education of students by the principals and managers of WPHG that is the envy of educational institutions around the country. The academic model between AU and WPHG involves the inclusion of the hotel’s management team as part of the teaching faculty of the AU Hotel and Restaurant Management program, with the hotel as a learning laboratory for students.

D. Benefit to the Surrounding Area / Economic Impact

A 2001 Events Center Feasibility Study completed by the Strategic Advisory Group, LLC for the Alabama Gulf Coast Convention and Visitor’s Bureau identified a significant need for more tourism to the Gulf area. The report conveyed that the lack of tourism caused many in-state tourism and convention dollars to go to facilities outside Alabama.

The study proposed a multi-purpose facility that would accommodate conventions, conferences, entertainment and sporting events, tradeshows, cultural events, and other civic-oriented events, the audience base of which would be identical to that of the Gulf resort project now proposed. The study underscored the need to attract visitors during non-peak seasons to the Gulf area. Interviews for the research were conducted with meeting planners in Mississippi, Alabama, Louisiana, and Tennessee, event promoters, other comparable operators, local hoteliers, area civic and business leaders, entertainment and restaurant association groups, and others.

The study concluded that strong market support exists for a convention facility with hotel rooms located on or near the beach in the Alabama Gulf area. The meeting planners who participated in the study revealed that they brought an average of 726 meeting delegates to their selected destination(s) for an average of 3.5 days each, with more than half of the attendees bringing a spouse and/or family. Among the findings:

· 95% of all groups surveyed reported the AGC area is now, or possibly could be at some future time, a likely destination for their event.

· Only 7% of the target market surveyed responded positively to an inland development; the vast majority identified beachfront or across the street from the beach as “highly likely” or “definitely” considerations, with many user comments specifically identifying Gulf State Park as an ideal site.

· The study projected that between 75,000 and 108,000 new occupied hotel room nights in the Alabama Gulf area would be generated, with a total attendance of 167,000 per year.

· The estimated economic impact of these new visitors would be $65,000,000 annually, with more than 1,600 new jobs generated with average annual earnings of nearly $28,000, and with nearly $3,000,000 in new tax collections.

· In an International Association of Convention & Visitors Bureau Annual Spending Survey for small-sized markets, the total spending identified for a convention destination was slated to be $260 per convention attendee per day in 2001.

II. Academic Programs

A. Hotel and Restaurant Management

As part of the Department of Nutrition and Food Science in the College of Human Sciences at Auburn University, the Hotel and Restaurant Management (HRMT) program prepares students for careers in the premium service segment of the hospitality industry. The program educates students in the art and science of hospitality management in a customer focused, problem-solving environment that balances theory with practical, real world experience.

In 2003, AU partnered with WPHG to develop this innovative curriculum model for hospitality education, setting standards for the HRMT program congruent with top industry standards. The focus on premium quality service has made the program highly successful since its inception in 1987.

A major, recent curriculum revision expands the vision of the program and takes advantage of partnership opportunities for students. Course additions, deletions, and revisions are based upon accreditation guidelines, industry input, current issues/trends, laboratory opportunities, and alignment with the mission.

This one-of-a-kind educational experience provides students with advanced knowledge and skills to truly set them apart from graduates of other hotel programs across the country and abroad.

Following are selected key features of the rigorous curriculum in partnership with WPHG:

§ The hotel provides a state-of-the-art “learning laboratory” for the HRMT instructional program, with members of the hotel executive management team designated as affiliate faculty who team teach courses with HRMT professors. Students receive both classroom theory and laboratory practice based on a model of continuous quality improvement in a science-based premium service environment.

§ The program develops a new educational model for service excellence that sets quality standards for congruent with hospitality industry best practices. The courses in the revised curriculum combine classroom instruction and theory with projects and hands-on experiences. These experiences are available to the students because of the university/industry partnership.

§ All courses include in-depth concept discussion and time for projects and experiential learning /learning laboratories. The laboratory experiences are coordinated by the affiliated faculty from the hotel.

While the HRMT program sets a high standard and leadership role for AU in hospitality management education, the Gulf project would provide a broader scope of leadership and resort-caliber experience for students, modeled after the established WPHG/AU partnership. A key Gulf property education component would be a practicum course which would rotate students through all major operational areas of the resort; the Hospitality Practicum would tie classroom experience with lab rotations. In addition, the resort would become an approved internship site for students in HRMT, involving a 400 work hour experience over the course of an academic term, supervised by an AU faculty member and a West Paces employee onsite in Gulf Shores.

Students at the Gulf property would also have educational exposure to spa operations, convention/exposition operations, and event management and resort management, which are major career growth areas in the industry not available at the AU Hotel.

In addition, offering distance education courses would be a possible opportunity. The HRMT program currently has a distance education graduate degree program in place which would be enhanced by offering courses at the Gulf site delivered to distance education students as well as campus based students. Furthermore, using various distance education delivery technology resources, courses would be developed at the Gulf property and delivered to students based in Auburn, and vice versa.

There are many reasons for excitement about the potential educational partnership with the Gulf resort. Education, outreach programs, training, economic development, and workforce development are powerful advantages to the state; and, at the very heart of the project would be a pool of highly motivated, hospitality-oriented, part- and full-time employees and future managers who are educated in Alabama.

B. Field Courses, Internships, Practicums, and Research

Because every resort is a model of many businesses, with its own marketing, engineering, landscaping, accounting, planning, and other operations, the Gulf resort would present opportunities for students engaged in many different types of academic disciplines to take advantage of outstanding learning opportunities.

To develop a true hotel professional prepared to assume a leadership role upon graduation, “real world” experience is critical. In far too many cases, interns are seen as merely seasonal labor for resorts needing to staff up for summer months, instead of as future industry leaders or managers. As a result, little real learning takes place. Students at the Gulf resort, however, would be immersed in all aspects of resort management.

The Gulf resort and surrounding state park land would provide additional student academic program opportunities, from research and internships to practicums and field experiences. These could be structured as courses in Independent Study, Special Problems in the industry, or other for-credit options. With sustainability as a unifying theme, the following additional areas of study could be actively engaged in such initiatives: business systems; fisheries; marine biology; ecotourism; forestry and wildlife sciences; horticulture and landscape architecture/planning; nutrition and exercise science; recreation, leisure, and wellness; retailing and merchandising; and child/youth/family education.

Practicums could take the form of two to three hour sessions in the hotel with an instructor several times a week. Each session would be dedicated to one specific area of the hotel, with students rotating through the major areas of the hotel. Due to the potential disruption to the operation, this type of intense learning should only take place at a property and managed by a company dedicated to the educational process.

Through onsite classrooms and dedicated hotel professionals assigned to work closely with students, the professionals-in-training at the Gulf would obtain an unmatched and highly valuable hands-on education. Further, the DCNR has indicated it would like AU to assist with state park programs that could further enhance and enrich the guest experience of all visitors, not just hotel guests, creating exceptional guest offerings.

C. Outreach/Extension Programs

University Outreach:

Through its Outreach arm, AU would potentially provide a number of continuing education and service programs at the Gulf resort. Such programs would benefit guests, visitors, students of all ages, faculty and area residents, address critical needs within the state – particularly in the Gulf region – and contribute to Alabama’s overall economic vitality.

Anticipated projects and programs would include distance learning, academic enrichment, environmental camps, academic conferences and workshops, and community and economic development initiatives.

Camps:

Camps could include cheerleader camps, architectural camps, creative

writing/art camps and marine ecology camps. Hosting AU Cheerleader

Camps at this site would be a top priority, given the location and the

national demand for such resort-type camps.

Programs/workshops:

Programs/workshops that could be offered by the Outreach Program Office (OPO) include, for example, Continuing Legal Education (CLE) classes and the Tax Program. CLE classes would provide continuing education courses for attorneys. The Tax Program, which has been offered by OPO for over 30 years, would provide continuing education for tax practitioners, enrolled agents, certified public accountants, public accountants, attorneys, and others in the area.

Conferences:

Business and Engineering Outreach, the Center for Governmental Services, and the Economic Development Institute at AU could host numerous conferences at the Gulf resort, including, for example, the annual Governmental Excellence and Best Practices Conference. This conference brings together mayors; state, municipal, and county officials; fiscal and economic officers; academicians; administrators; managers; the private sector; and other experts to discuss and collaborate on best practices in government.

Alabama Cooperative Extension System (ACES)

The Alabama Cooperative Extension System (ACES), in cooperation with area public and private entities, could establish a Gulf Coast Education Institute to develop, market and conduct natural resource based educational and entertainment programs/services for area residents and those who visit the Alabama Gulf Coast for tourism, recreation, or business purposes, or to participate in programs conducted specifically by the Institute.

The Institute, which would be self-sustaining, would highlight the natural environment, ecology and history of the Gulf of Mexico – its waters, shores and beaches, estuaries, bays, and tributaries – through research-based, hands-on, fun-filled programs and field trips. Participants would experience the coastal environment different times of the year, gain knowledge and appreciation of how the oceans and coastal areas contribute to the social and economic development of the United States and the world, learn how they contribute to the world’s food supply, and gain understanding of how they can be sustained and enjoyed.

Many of the Institute’s activities would be focused on the 6,000 acres of the state park. However, education and entertainment programs could also involve significant natural resource sites throughout the northern Gulf coast.

Programs conducted by the Institute could possibly include:

1) sea Camps/Marine Camps/Coastal Camps featuring week-long residential programs for youth and adults to involve them in intensive, mentally and physically challenging activities of marine and coastal research and exploration, study and recreation;

2) interpretative adventure tours of sites and places of ecological, historical, and economic importance within the Gulf Coast, to include Mobile Bay and Delta, Weeks Bay Estuary, marshes, commercial fishing and processing facilities, marine research laboratories, and zoological habitats;

3) weekend or one day workshops, seminars and conferences on coastal and recreational subjects to enhance the participants’ ability to enjoy, protect, or understand the Gulf;

4) live Web-cam views of significant ecological sites and events, such as birding sites, alligator habitats, and sea turtle nesting that could be viewed on the internet for a fee or on the closed circuit television system at the Gulf property; and

5) research trips for non-scientists on an AU marine research vessel, during which the participants could actually assist research investigators in taking samples, tagging fish, working nets, or identifying and/or counting specimens.

III. Needs

A. Faculty and Staff

The strength of a hotel learning program depends upon having instructors who are on the management team of the hotel. As with the WPHG/AU program in Auburn, management team members at the Gulf would also be instructors holding appropriate educational and experiential credentials to qualify as mentors in service excellence. Educational activity would be coordinated and approved by the program director, with individual study coordinated by a faculty advisor based at AU. The learning experience would be strengthened by the coordination and tie-in to the same activity at the AU Hotel, where many students may be employed or completing their practicum.

The Alabama Cooperative Extension System staff would be contracted onsite for program planning and development purposes. Other staff will probably be part-time or seasonal workers, volunteers, or provided by a private partner. All staff would be paid from revenue generated by the respective programs.

B. Class Meeting Space

A dedicated classroom with multimedia capabilities would be included in the program for the hotel. Educational programming could be received from, or broadcast to, classrooms at AU.

C. Information Technology

The hotel should be constructed with the latest available technology for its customers, thus would provide students with access to high speed wireless, audio-visual equipment, and modern hotel systems.

Any specific equipment to tie in to AU systems would be included in construction costs of the hotel.

D. Student Recruitment

Because this project as proposed would be unique in the industry, and the only one of its kind in the multi-state Gulf region, it would attract more students to the primary HRMT program and to other academic programs. Thus, it would be to the advantage of the hotel, WPHG, DCNR, Alabama, and AU to publicize each stage of the development.

Once construction is underway, a comprehensive marketing plan for the hotel should be created, a major component of which will be academic programming. The hotel marketing plan should reinforce student recruitment objectives while simultaneously driving business to the property.

Congruently, a marketing plan for the HRMT and any other academic, outreach, or extension programs should be developed with the goal of increasing enrollment and supporting the marketing objectives of the hotel.

Finally, WPHG, as operator, would support both the hotel and the academic programs through its corporate marketing efforts.

E. Housing and Community

AU faculty and students pursuing educational opportunities at the Gulf could be significant contributors to the local economy. AU will continue to explore ideas and possibilities for developing and constructing necessary housing, including contributions from the developer and any federal or donor/gift opportunities.

Ideally, since AU students would provide additional services to the state park and developer, student housing solutions should come from within the developer-state-university partnership.

IV. Academic Funding

University Outreach and ACES programs would be self-sustaining immediately through fees charged for services and programs. While existing funds would not be diverted to the Gulf property, the ultimate goal would be for program segments offered at the resort to become self sustaining through enrollment and tuition revenues.

Funding solutions could also be explored through the following areas:

· Developer funding: several of the interested developers have alluded to providing a potential income stream for academic programming, due to the increased appeal and the enhanced guest experience such programs would provide.

· Federal funding: grants could be sought that would support housing for the innovative new academic programming

· Gifts: donors could be approached to provide money for academic programs, property or housing as a gift to AU, perhaps named after the benefactor.

Updates and modifications to this plan will be posted to www.auburn.edu/gulfstatepark