“Orlando hotels adding convention space along with guest rooms” plus 1 more |
| Orlando hotels adding convention space along with guest rooms Posted: 21 Sep 2010 06:50 PM PDT When the Peabody Orlando quietly opens its $450 million expansion on Thursday, it will do more than add 750 new hotel rooms to the local market. It will also expand its meeting-and-convention space by nearly a quarter-million square feet. The hotel's new ballroom alone is large enough to hold 32 typical homes. The Peabody addition and the opening of three new hotels in the past year have together added more than a half-million square feet of meeting space to the area's existing supply — almost one-fourth of all the space inside the sprawling Orange County Convention Center, the Peabody's next-door neighbor on International Drive. Orlando may be home to the nation's second-largest convention center, capable of handling some of the biggest trade shows in the country, but an overwhelming majority of the area's meeting space is actually inside its hotels. Their combined meeting, convention and trade-show facilities have ballooned during the past decade to nearly 4.7 million square feet, according to the Orlando/Orange County Convention & Visitors Bureau. That's almost twice the 2.58 million square feet in the county convention center, which is not included in the CVB tally. The meeting space added just in the past 12 months by the 1,641-room Peabody, the 1,400-room Hilton Orlando (another convention-center neighbor), the 1,000-room Hilton Orlando Bonnet Creek, and the 497-room Waldorf Astoria (also at Bonnet Creek) has boosted the local inventory by more than 13 percent at a time when the meetings-and-conventions business, and the hospitality industry generally, are still struggling to get back on their feet following the longest recession since World War II. Yet local tourism promoters say more options simply make an already popular destination even more attractive to meeting planners. And hoteliers are relying more and more on convention space to put heads in their beds. "Coming from the hotel business myself, I always had the philosophy that you can never have too much meeting space," said Gary Sain, president and chief executive officer of the convention-and-visitors bureau. "With only so many prime-time dates available, the more opportunities you have to book will give you more success." During the peak of Orlando's convention season — January, February and March — the new ballrooms and conference centers should help Orlando snag conventions that in past years may have had to go elsewhere. But even Sain admits the difficulty comes during off the "shoulder" seasons on either side, when facilities have to compete for bookings. "It works for you when times are good," he said. "In the off periods of time, you've got to work that much harder to fill that space." Meetings are increasingly important for the hospitality industry, especially in Orlando, which is the nation's second-biggest market for both hotel rooms and meeting-and-convention space. For instance, 80 percent of the Peabody's business comes from groups booking blocks of rooms, mostly for meetings in the hotel or next door at the convention center, said Alan Villaverde, the hotel's managing director and president of Peabody Hotel Group. "For a major hotel to be competitive these days, you have to have a large amount of function space," he said. "That is such a lucrative part of our business." In part that's because meetings generate additional food-and-beverage sales, but the primary purpose of convention space is to sell more hotel rooms, said Scott Smith, a lodging instructor in the University of Central Florida's Rosen College of Hospitality Management. Hotels allocate meeting space based in part on how many guest rooms a group intends to book, because those are the big money makers. "It's the carrot that gets those large groups to book," Smith said. "You use that meeting space to sell sleeping rooms." While there were earlier pioneers in the meeting-space game — the Swan and Dolphin hotels at Walt Disney World, for instance — Villaverde credits the Gaylord Palms Hotel & Convention Center with kick-starting the growth in Orlando. Other hoteliers thought the Gaylord was crazy when it included 400,000 square feet of convention and meeting space in its plans, Villaverde said. But when it debuted in early 2002 on Disney World's doorstep near the Orange-Osceola county line, it had sold a million room nights in advance — just four months into a travel slump triggered by the September 2001 terrorist attacks in New York and Washington. "Space is the commodity that we have," said Monica Schyck, vice president of sales and marketing for the Gaylord Palms. "The ability to do it all under one roof has been our niche." Others followed suit, and since 2001 the amount of meeting space in Orlando-area hotels has nearly doubled, according to the visitors bureau. Significant projects have included an expansion of the already-giant Orlando World Center Marriott and the construction of Rosen Shingle Creek, which has 445,000 square feet of meetings space. Since the opening of two Hiltons and the Waldorf within a month of each other last year, the big bump in meeting space and hotel rooms has become apparent, even as the Peabody prepares for this week's "soft opening" — and, ironically, the Gaylord is one of those feeling the strain. In its second-quarter earnings report, parent company Gaylord Entertainment Co. said the past year's growth in the Orlando market was putting "significant pressure" on guest-room prices, especially given the economy's sputtering recovery. "Over 2,000 rooms have been added into the market since September 2009," the Nashville-based company noted. "Absorption of this new supply has been slow as a result of the challenging economic environment." What about the added space's effect on the county-run convention center? Hoteliers say they generally attract a different type of customer, which minimizes the chances of them cannibalizing the giant facility. Meeting planners choose between a hotel and a convention center based largely on the size of the group as well as the aim of the event, they say. Some groups want or need the large, unobstructed exhibit space offered by a convention center, while others are more interested in keeping everything tied to their event, including overnight accommodations, under one roof. According to Villaverde, the meetings and conventions that choose the Peabody don't necessarily want a convention-center environment. And area hotels are taking in a lot more meeting business than they might be siphoning from the convention center, resulting in "more of a gain than a loss" to the area "by a large margin." The convention center views its relationship with convention hotels as one of "give and take," said Gwen Wilson, a spokeswoman for the county operation. Nearby hotels with added meeting space, such as the Hilton Orlando and Peabody, may land some smaller shows and meetings that previously used the center, Wilson said. But they also have added much-needed guest rooms within walking distance of the convention center, which allows it to attract more of the country's really large trade shows and conventions, she added. According to a recent survey by Meeting Professionals International, only about 8 percent of its members expect to use an actual convention center for their upcoming meeting or trade show, compared with 68 percent who intend to book some sort of hotel facility. "From a planner's perspective, it depends on what you're trying to accomplish and what setting you want to have," said Theresa Davis, a spokeswoman for the planners' group. "Not everyone wants to be in a convention hall, or will have a need for hundreds of thousands of square feet of trade-show space." Sara K. Clarke can be reached at skclarke@orlandosentinel.com or 407-420-5664. 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| Posted: 21 Sep 2010 10:14 PM PDT Bed tax battle joined Residents form groups to oppose, promote ballot measure that could raise $3.5 million annually. By Cara Rank, Jackson Hole, Wyo. September 22, 2010 Bill Phelps was opposed to the lodging tax when it was first approved in 1986. He also campaigned against the tax when it came up for votes in 1994, 1996 and 1998. He watched it get soundly defeated each time. Back then, he believed the tax would over-promote the valley, drive growth and boost the bottom line for one industry: hotels. Today, Phelps is once again heading a committee — People who Believe Jackson Hole is More Than Just a Product — to campaign against the ballot measure, which would levy a 2 percent tax on valley motel rooms. He doesn't think 60 percent of the funds collected should be spent on promotion, as required by law. "Those of use who voted against it in the past, we would all happily vote for the lodging tax if the money goes for impacts and services and not for promotion," Phelps said. On Nov. 2, voters will be asked for the fourth time in 16 years whether they want to tax valley hotel rooms. The Jackson Town Council and Teton County Board of Commissioners decided in August to take the measure to voters. Tax dollars generated could help make up for revenues lost due to the recession. Tax supporters also have begun to organize, forming the Citizens for a Sustainable Community political committee. They say the tax would offset the impacts visitors have on services such as START and pathways while giving the tourism industry more marketing power to draw more people, and more money, to Jackson Hole. Innkeepers support taxing their industry. "If anything, we should be scared of this tax," said Diana Waycott, owner of The Lexington at Jackson Hole. Belief in the tax comes even as "we're raising our hotel room rates in a way that somebody might not come stay with us because of it." But such fears are outweighed by the good they see the measure would bring to them and to Jackson Hole. A tax would generate funds mostly for promotion but also to offset tourist impacts and provide a small amount of funding for general government services. State law requires 60 percent to be spent on promotions, 30 percent on visitor impact services and 10 percent on general government expenses Phelps doesn't see that any of the old problems have been solved since the tax lapsed in 1994. If anything, they're more pressing, he said. "It's a subsidy," he said. "You are basically taking a sales tax resource and handing millions of dollars over to private industry, private business interests, to spend on advertising for themselves. Frankly, I don't think you could pass a law like this today." Cities, towns and counties are allowed by state statute to levy up to 4 percent on most sleeping accommodations for guests staying fewer than 30 days. The tax requires voter approval. Tax in place 8 years
At that time, state law mandated 90 percent of the money pay for tourism promotion with the balance for local government to spend on visitor impacts. Even after the way the funds were allocated was changed to limit promotion to 60 percent, the tax failed another vote in 1998. Before it was overturned, revenues from the lodging tax paid for promotional items such as brochures and advertising. The remaining money was used for administration costs, phone services, trade shows, research and the airport greeters program. Supporters said the emphasis was on shoulder seasons. The first year the tax was in place in 1986, it raised $661,368, according to a Jackson Hole News article. In today's economy, revenues are estimated to be a whopping five times what they were in 1986. At the proposed 2 percent, the lodging tax would generate $3.5 million annually, of which about $2.1 million would have to be spent on promotions, $1.05 million would have to be used for visitor services, and the remaining $350,000 could be used for town and county general funds. Town and county leaders have been eyeing the tax as a way to make up for lost revenues due to declining sales tax, property tax and funding from the state. Though they considered a general sales tax hike, leaders abandoned that idea, saying that levy would affect residents, too. A joint powers board, comprised of members from the lodging and tourism community, and people appointed by the council and commission, would oversee how the 60 percent dedicated to promotion would be spent. The makeup of the board and an operating agreement for it would be drafted after the lodging tax is approved. County attorney Keith Gingery said in a memo that the 30 percent for visitor services would be split between the county and town based on how much was collected in each jurisdiction. The 10 percent for the general fund would also get divided based on collections. Officials have not said how the money would be spent, but many have pointed to START and pathways as recipients. If enacted, voters could reconsider the measure in four years. One main concern of critics is they see the tax as a handout to the lodging industry. "I see no reason to take the sales tax and just hand it over to private interests for development," Phelps said. "This whole idea of public sponsorship of private business has not fared well nationally in the current economic crisis." Moreover, Phelps said, he doesn't understand the need to promote the valley, which experienced record growth in the years that the lodging tax was not in place. "If we had growth without it, then why do we need it?" Phelps said. "Maybe people think we need more growth than we're having. Is it possible that people overdeveloped, and they're hoping this will save them? Now they need to fill [the rooms] up, so they want a subsidy to do it." Phelps wonders why more than 3 million annual tourists are not enough. "What do we need? Four million or 5 million?" he said. Increasing the number of tourists who visit the valley could mean hotels would be encouraged to expand, and the cycle of needing more money to offset visitor impacts would continue, Phelps said. What's more important is ongoing, sustainable tourism, he said. "That means you don't expand it beyond what it can support," Phelps said. Otherwise, the lodging tax could lead to damaging the qualities that draw people to the valley and diminish their experience here, Phelps said. Proponents don't see it that way. "We can only sleep so many visitors," Waycott said. More than anything, the tax would allow the tourism industry to consolidate marketing efforts, getting more bang for its buck, she said. Resort impact fee
Others use a fee to promote their own properties individually. For example, Terra Resort Group reported in February that it spends about $1.3 million annually to promote its three properties. Those promotions are funded with a resort impact fee of 6 percent. Those fees are subject to the county's sales tax. Some properties likely will stop charging a resort impact fee if the lodging tax is implemented. "As a business owner, I just can't keep adding things on to this daily rate and expect someone to pay it," Waycott said. "At some point, someone will say, 'This price is out of control. I'm looking elsewhere.' " They are already doing that. While Yellowstone National Park may have seen record visitation this year, those visitors have not meant more money for area hotels. "It is not record here," Waycott said. "People are camping." The effort is more about capturing revenues from the people who already are coming here and booking hotel rooms. 'Not a handout'
The valley has lost about 2,000 jobs since the end of 2007, he said. The tax is not a handout to hotel owners but, rather, a way to strengthen the economy as a whole, he said. "We're the only town and county, combined, that does not have a lodging tax in Wyoming," he said. "Around the state that's a very, very important tool for helping [other communities'] economies. We're in a recession right now. Should we be ruling out a tool that can help stabilize the economy?" The National Bureau of Economic Research said Monday the recession ended in June 2009. O'Donoghue said the lodging tax is one residents won't have to pay unless they stay in a hotel room here. It would be assessed only on visitors who stay in short-term rentals. Monies could be spent promoting all months but mostly those in the shoulder and winter seasons, he said. Even summer needs promoting. "There's only two or three weekends a summer when rooms are full," O'Donoghue said. But who wants to visit in April, when the snow is melting and most restaurants and shops close? "Here's the thing," O'Donoghue said. "If you're looking for wildlife, which is the No. 1 reason people come to Wyoming and Jackson Hole, what are the best months for seeing and viewing wildlife? It's the months where the seasons are in transition and wildlife is on the move." In late March, April and May, hawks return to the valley, elk start to migrate back to Yellowstone and bears wake up for the winter, he said. In the fall, elk begin returning to the National Elk Refuge. Though just how the money would be spent would not be determined until after a joint powers board is assembled. Sales tax money also could be used to replace money given by the town and county to support the Chamber of Commerce, which will receive $350,000 from government coffers this year. That would leave more in the town and county budget to pay for essential services, O'Donoghue said. Attorney Len Carlman, who's running for House District 16 as a Democrat, said he'd rather see no money spent on promotion, 90 percent of the funds spent on visitor impact services with 10 percent going toward general government. Such a split is not allowed in statutes today, but Carlman said if elected he'd introduce legislation to allow communities to change that formula. "Growth is not the issue," he said. "The issue is long-term, economic sustainability for all of us in Jackson Hole that we need to protect." Spending the majority of those funds on visitor services would distinguish the valley from its regional competitors, Carlman said. Those funds could be used for pathways, START and public restrooms — visitor amenities that would make the valley a top-notch destination, he said. "Every visitor service will have some labor component," Carlman said. "We can hire locally to do that." By spending 90 percent of lodging tax revenues on visitor services, the community would show its guests hospitality, he said. "We can beat our regional competitors, the ones who are taxing you and me at their hotels with nothing in it for us," he wrote in an ad Sept. 15 in the News&Guide. "We can be exceptionally hospitable, with hard dollar investments in really taking care of our guests. They'll notice that. And appreciate it. We all come out ahead." Lost revenue
Back then, people involved in the lodging tax issue knew lawmakers would not consider a different split, mainly because they didn't — and still don't — want to tax one industry more than another without giving the industry something in return, she said. Today's 60 percent requirement would give back to the industry being taxed. Under Carlman's proposal, the tax would remain the same, but the lodging industry would see none of those funds used directly for its promotion. Petroff estimates letting that tax lapse for 16 years has resulted in lost revenue anywhere from $12 to $20 million. That money could have been used to help the local economy during the recent recession, she said. "What happens in a bad economy is that our vulnerabilities show up even more," she said. "Summers stay strong, but the winters and off-seasons taper off even more." The more seasonal the economy is, the more difficult living here and running a business becomes, she said. "For the last 12 years, if we had been able to promote the winter and shoulder season, we'd be in a much better position to handle the economic twists that have happened to us." Paying for promotions isn't the only reason to levy the tax, she said. The town and county spends a lot of money on support services that are used by both tourists and community members, she said. "I don't think it's unrealistic to expect tourists to pay a higher portion," Petroff said. "Certainly we're taxed almost everywhere we go." This entry passed through the Full-Text RSS service — if this is your content and you're reading it on someone else's site, please read our FAQ page at fivefilters.org/content-only/faq.php |
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