Experts Forecast Bright Future For Washington Hotels - 2001-02-26

<B>Experts Forecast Bright Future For Washington Hotels</B>

By Barbara Cook

Fueled by the Presidential inauguration, Washington hotels enjoyed a strong start to the year and, despite mixed predictions for the nation's economy, should continue to post healthy occupancy rates in 2001, experts said.

The recently issued 2001 National Lodging Forecast by Ernst & Young points to the wide range of new properties coming on the market in Washington and the expected opening of the new convention center in 2003 as factors that will increase lodging demand.

The city experienced 15 hotel openings in 1998, 25 in 1999 and the trend appears to be continuing, the report stated. Occupancy and average daily rate levels increased two percentage points in 1999 and 3 percent in 2000. Ernst & Young cautioned that occupancy levels could decrease minimally this year, however, due to the significant increases in supply.

Yet, Randy Smith of Smith Travel Research told BTN that Washington hotels will continue to do well. "There is some new supply coming in the market but they have strong demand and you'll see that continue throughout 2001." Smith noted that the occupancy rate for the metropolitan area for 2000 was 73.3 percent, compared with 71.0 percent in 1999. Average room rates for the market in 2000 totaled $116.24, compared with $109.83 in 1999.

The opening of the new convention center will position Washington to attract more meetings business and boost lodging demand. The center will rank among the 10 largest in the United States. Further, a request for proposals for the redevelopment of the old convention center site is in progress. Numerous ideas have been proposed, including residential, retail, sports-related and office uses. The final disposition could be another factor in attracting more business to Washington's hotels.

Washington Convention and Visitors Association spokesman Brian Ullmann said 22 citywide conventions are booked at the old convention center this year, down from 33 last year. However, he said, 2000 ranked as a record year. "There's no single answer to why business was so good last year, but sales efforts for the new center have raised the overall interest level in the city," he said.

Ullmann said the CVA hadn't predicted increases in convention bookings for 2001 and 2002. "Many clients are waiting for the new center," he said. "Yet, 2001 and 2002 are in line with the 10-year average."

The CVA anticipates 30 citywides will be booked for the center for most of the years 2003-2008 and early reservations have been encouraging. The plan is to average 450,000 room nights per year from convention center business.

To capture that demand, many of the city's hotels have upgraded:

<li> All 260 guest rooms at the Four Seasons now are completely renovated, including being wired and equipped with Wayport high-speed Internet access and Web-TV. A project to open a guest business center is underway and should be completed by late summer.

<li> A 300-room Ritz-Carlton opened in October, featuring 20,000 square feet of meeting and ballroom space, and a fitness center and spa that occupies two floors. Guest rooms offer high-speed Internet access and modem facilities with dual phone lines, plus outlets to charge laptops.

<li> The Willard Inter-Continental in late 2000 completed a multimillion-dollar renovation of its 308 guest rooms, 33 suites and restaurants.

<li> The Crystal Gateway Marriott, just across the Potomac River in suburban Virginia, is in the midst of a $1.4 million renovation of the grand ballroom, which will add technological upgrades, including motorized air walls to allow for quick room transitions. To be completed by March 1, the ballroom renovation includes the addition of high-speed Internet access. The hotel just finished a $2 million upgrade of 245 guest rooms in the tower and the remaining rooms in the 700-room hotel will undergo a complete renovation in 2002.

<li>The Marriott Wardman Park Hotel is adding breakout meeting space to its Exhibition Hall B in response to a steady increase in corporate meeting and conventions booked at the hotel this year. According to Dan McKeon, director of marketing at the hotel, "We have more than doubled our corporate bookings this year with more than 100,000 rooms, as opposed to 40,000 in 2000. We expect this trend to continue in 2002." The hotel also completed an $800,000 renovation of its Cotillion Ballroom.

<li> The J.W. Marriott just completed a $2 million renovation of its 34 suites.

<li> Swiss&ocirc;tel Washington, the Watergate, has completed a $13 million renovation of its 250 guest rooms and suites. Included in new guest room amenities for the business traveler are fax machines, two-line telephones with dataports, voicemail and oversize desks.