A Montpelier family stepped in to save a venerable property
by Will Lindner
Following a flood in 1992, the Day’s Inn in Montpelier closed its doors. Two years later, the hotel reopened as Capitol Plaza Hotel & Conference Center under the ownership of a longtime Montpelier family headed by Frederick Bashara II. Brian Cain (pictured), Bashara’s son-in-law, is the general manager and director of sales.
Montpelier is a little idiosyncratic as a business hub, particularly for a state capital. The city values individuality, commitment, and community. The number of chain anythings in its downtown is very small, and those businesses are successful because they have proved solid — and modest — and stood the test of time.
The city is famous for rejecting a McDonald’s restaurant several years ago that planned to open on State Street, smack in Montpelier’s tiny but bustling commercial district. It was a controversial event in business circles, but it was, indisputably, a statement by Montpelier about its values. And “local” is one of them.
It makes perfect sense, then, that the Capitol Plaza Hotel & Conference Center, Montpelier’s signature downtown hotel, is a family enterprise, owned and operated in a hands-on style by two generations of a family headed by local entrepreneurs Fred and Mary Bashara. But what really makes this a quintessential Montpelier story is that the hotel was, for several years, a Day’s Inn — the franchise with the sunrise logo that, according to its website, operates some 1,800 hotels around the globe.
The trend of our times is for locally owned businesses to fail or be subsumed by well-capitalized national and international corporations, but in this case the pattern went in reverse. Following a damaging flood in 1992, the Day’s Inn closed its doors, and when the hotel reopened two years later, a very familiar local family (the Basharas were long known as the owners of movie theaters in Montpelier and Barre) was in charge. That fit Montpelier to a T.
“It’s a small-town hotel,” says Brian Cain, 49, a Bashara son-in-law who is sales director and general manager of the property. “By that I mean that we’re really not attempting to be a resort with green space and amenities and all that. We try to stay consistent with what we originally thought we could be — a small-town hotel with good conference facilities and an excellent restaurant, J. Morgan’s Steakhouse.
“The important thing is that this is an independent hotel, not associated with any type of franchise. And that’s rare these days.”
Also rare, Cain points out, is the hotel’s 70 percent annual occupancy rate. “The standard in Vermont is about 40 percent,” he says.
There is not a high seasonal fluctuation in occupancy. The best month is October, when foliage tours come through, and second-best is August. The hotel does well in summer, partly because it has the amenities — function rooms, the restaurant, and guest rooms — to host weddings. In winter the Legislature is in session, which provides steady takers for the conference facilities and the hotel rooms.
Vermont’s economy has often been described as a three-legged stool (manufacturing, tourism, and agriculture), and Cain applies a similar description to the brick building at 100 State Street.
“We have the hotel rooms, the restaurant, and the conference center,” he says, “and each of those legs supports the others. If I have hotel guests they are, hopefully, eating in the restaurant. Same with the conference center, that they’re eating in the restaurant and staying in our hotel rooms. We try to keep all three of those things going in support of each other.”
It took the family some time to construct that stool, and they are constantly reinforcing it through renovations.
“The 1992 flood basically closed the hotel as the Day’s Inn,” says Cain. “The ownership group went bankrupt so the place sat here for a year. My father-in-law, Fred, had an opportunity to purchase it.
“At the time, I was director of sales at Sugarbush Resort; he asked me if I’d like to be part of the business, and at first I said no, but I decided it was really a great opportunity if we were able to do it correctly.
“In the four months after the purchase, we renovated the public spaces and opened with 39 hotel rooms on the two-year anniversary of the flood. The restaurant reopened, too.”
After they took ownership, the family discovered that a great deal more than cleaning and repairing flood damage needed to be accomplished. Cain says the building was in disrepair even before the flood and some areas suffered from neglect. Also, rooms in some sections were antiquated — far too small to be acceptable to a modern clientele.
At one point the hotel — four stories for much of the building, but with a six-story wing Cain calls “the tower” that houses a business tenant on the top two floors and the Northfield Savings Bank on the first floor — had upwards of 100 rooms.
Richard Bashara manages the family-owned car washes, Laundromats, and movie theaters; Cyndy Golonka is in accounting and finance; and Freddy Bashara is executive chef for J. Morgans and banquets. All are owners of Capitol Plaza.
Furthermore, basic premises of profitably running a hotel in the capital needed to be reconsidered. Situated half a block from the Statehouse, the hotel is and always was destined to become home-away-from-home for at least some of the legislators who spend January through April or mid-May in Montpelier. Cain says that under former ownership, the hotel charged legislators $600 a month and considered them permanent guests whether they were there or not, their rooms unavailable even if they were absent.
“That’s $20 a night,” says Cain. “Nobody can run a hotel on 20 bucks a night.”
Today, the hotel provides legislators rooms consistent with the state’s per diem, which is still a lower rate than most guests pay, but the legislators typically arrive on Tuesday and depart on Friday during the session, and when they’re not there the hotel rents to other customers.
“We can store their bags for them, and return them to the same hotel room most of the time,” says Cain. “We love our legislators; they become regulars who know the staff, and we have birthday cards and Christmas cards going back and forth between the legislators and staff all the time.”
Actually, legislators account for a surprisingly small 8 percent of the rooms let over the winter. “But if you have a five-month period where one organization is making up eight percent of your business, that’s a good thing,” Cain says.
The family has sought to learn other lessons from the hotel’s sometimes difficult business history, as well. Given its location, it was bound to attract businesses, organizations, and state agencies seeking office space.
“A hotel room is worth $25,000 to $30,000 a year in revenue,” says Cain. “Comparable office space is worth about $5,000. When we have had the opportunity, we have usually tried to return office space to hotel space, and we’re now up to 62 rooms. The math of a single room’s worth isn’t hard to do. For us, it’s about the rate and that 70 percent occupancy.”
Cain cites the family structure as an important element, professionally and personally, for its members. Working together helps to unify them — to the point where they often take vacations together — and within the business, each has acknowledged roles and areas of expertise.
“Fred and Mary, at the top, are involved in capital improvements,” says Cain, referring to his in-laws. While he jokes that the “children” — who are all in their 40s — have to try to keep Fred from spending money, he credits Bashara with a keen sense of knowing when to invest strategically.
Case in point: He undertook wholesale renovations of the hotel rooms in the early days of the economic downturn, when other business owners were panicking and cutting back and contractors were more affordable. Cain says those improvements have increased the Capitol’s market share.
Working together helps to unify the family members. Bashara daughter-in-law Laura Bashara, human resources, and daughter Lilli Cain, accounting and finance, are owners.
For her part, Mary Bashara is the matriarch of interior design — and the property is known for an elegant style that befits a capital city (but at 8,000 population, an unpretentious one). It is said within the family that Mary seeks their input, then ignores them, and is always right to do so.
Elder son Richard Bashara has an ownership stake in the hotel, but primarily runs the other businesses (theaters, Laundromats, car washes). Daughters Lilli Cain (Brian’s wife) and Cyndy Golonka, and daughter-in-law Laura Bashara are the financial managers for the operation. The younger son, Fred Bashara III, has taken the reins as executive chef of J. Morgan’s Steakhouse.
The latter is a critical job, Cain says. “Freddy is the key to the entire food operation here, which is two-thirds of our revenue. He has a business degree from UVM, but he always had a love for food and he just learned the business internally and runs a very tight and efficient kitchen. He is probably most like his father. Those guys, I think, work 24-7.”
There’s a third generation coming along — the 12 grandchildren of Fred and Mary Bashara. Cain says the older ones are starting to show up in the kitchen, or hosting in the restaurant. They’re the future, he says, because the family has no interest in selling out to a chain.
“When we purchased this hotel, it was never a modern type of plan of running things for 10 years and then selling for a profit. It’s our livelihood, and the livelihood of our 65 employees. That’s a lot of responsibility.” •