Disney, Universal Go Head To Head In Orlando
<B> Disney, Universal Go Head To Head In Orlando</B>
By Chris Davis
Despite generally high hotel occupancy rates, the eternally growing Orlando area in Florida may well offer meeting planners some additional leverage in the coming months, as two of the world's largest entertainment companies focus even more attention on the potential for corporate group business.
Even as it further develops its corporate meetings capabilities with its new meetings-centric Coronado Springs Resort and the New England town meeting environment at the Disney Institute, Disney is about to get some serious competition from Universal Studios, which will open the Portofino Bay Hotel and Universal Studios Escape theme park this year, and two more hotels in the next two years.
For corporate meetings buyers, the heightened competition should lead to increasingly attractive prices.
"The hotels outside of Disney and Universal are watching those hotels go up, and they know how efficient those corporate machines are," said William Peeper, president of the Orlando/Orange County Convention and Visitors Bureau. "You can't get cocky in this market, because this place is so competitive that somebody's going to eat your lunch."
Disney has struck the most recent blow in the meetings imbroglio with last year's opening of the Coronado Springs, designed specifically to cater to groups. "From the ground up, we wanted to create the ideally designed and developed convention hotel," said George Aguel, vice president and general manger of Disney resort and park sales and services. "We wanted to make a major statement with the property, so we gave it the largest ballroom in the Southeast. It is a Disney owned and operated resort, and offers all that goes along with that, but at a more moderate price than a corporation would expect to pay at a destination as in demand and as popular as ours."
The property's selling points include direct load-in to ballroom floors and an extensive fiber-optic network for Internet connections and videoconferencing. "Our property, large as it may be, is nevertheless principally focused on medium- to smaller-size groups," Aguel said.
Other Disney World properties like the upscale Grand Floridian Resort and Spa, the Yacht Club Resort and the Boardwalk Inn have "dramatically grown corporate group business over the past few years. We could easily be the largest generator of group business in Florida in a short amount of time," he said.
Disney has positioned the Disney Institute as a corporate venue, where groups can take a few days of classes to glean a sense of how it runs its operations and to pick up management skills. "It's become a great way for companies to embellish their agendas from a content perspective, not just a social or entertainment perspective," Aguel said. "These companies are focused on management training and professional development."
Andrea Spinelli took a group of managers from Wakefern Foods of Elizabeth, N.J., parent company of Shop-Rite Supermarkets, to a successful meeting at the Institute. She and the staff "discussed the meeting objectives and how we could tailor the program to the specifics of the food industry and consumer market. They were great in customizing the program."
Universal, meanwhile, expects the upcoming opening of the Portofino, managed by Loews Hotels, and its new theme park to be major draws for future group business. "We offer Loews Hotel service, and Orlando doesn't have a hotel of that quality," said Universal vice president of resorts Bryan Guillot. "It's geared toward the 50- to 250-room range. We're targeting small, upscale corporate meetings." The 750-room Portofino also will have videoconferencing capability.
Universal plans more onsite Loews properties, with the Hard Rock Hotel set to open in 2000 and a third, unnamed hotel on the books for 2001. "Clearly the entertainment giant has been Disney," Guillot said, "but we are stepping up to the plate with our product offerings. Now there's an option."
Corporate buyers, meanwhile, eagerly await the leverage increased competition will afford them. "They both will succeed, though it will be a lot more challenging and require some creativity and rate sensitivity, which will certainly help buyers," said Fred McManus, general director of travel and conferences at John Hancock Mutual Life of Boston, who brings at least one meeting, usually a combined incentive and business group, to Disney World annually. "I equate it to what goes on in Las Vegas, where they're master marketers too. Every 10 years or so, that market overbuilds, resulting in a buyer's market and some very interesting price wars. Right now, competition is quite heated and there's a good buyer's market. That's what's going to happen in Orlando with Disney and Universal."
Lisa Lopes, an incentive and meeting planner at Ft. Lauderdale-based Carico International, agreed the Portofino opening should result in better rates. "We do an annual convention in the state of Florida, and we've done it in Orlando often. I'm already booked in January 2000 in the Portofino. It has more flexibility than Disney, and I absolutely expect to have more leverage."
Off-peak meetings will see the most opportunity for leverage, Peeper predicted, particularly in the summertime. "Really, the potential for leverage will be there any time except the first quarter, and in September and October," he said.
About half of all groups in Orlando are corporate, and while 22,000 new hotel rooms will be introduced by 2002, he doesn't expect the market to be oversaturated. "We finished 1998 at more than 76 percent occupancy, and the industry rule of thumb is that you can still make money at 62 or 63 percent," he said. "There's a long way to go before anybody feels they'll lose money in this market, and the properties we know about are still moving forward very aggressively.