Puerto Rico's New Hotels Pursue Mtgs.

<H1> Puerto Rico's New Hotels Pursue Mtgs.</H1>By Cheryl Rosen

<B>P</B>lanners in search of a little more negotiating advantage than they can currently find in major U.S. cities might want to take a fresh look at the refurbished island of Puerto Rico, where a hotel building boom holds out the promise of a venue that is anxious for corporate meetings business.

Five major hotel projects are currently under way: a Ritz-Carlton, a Wyndham, an Embassy Suites, the Colony San Juan Beach Hotel and the Westin Rio Mar Beach Resort & Country Club-home to the largest ballroom in the Caribbean and two championship golf courses, including the new River Course designed by Greg Norman. Scheduled for completion this spring is a total renovation of the El Convento Hotel, a 55-room boutique property on a 500-year-old historic site in Old San Juan-complete with electric cars that will transport guests around the property.

To keep up with the new young faces on the block, existing hotels in this American corner of the Caribbean are investing in face-lifts of their own. The El San Juan has put $30 million into refurbishing every guest room and a magnificent lobby, reminiscent of Havana in its hotel heyday, and is adding an outdoor rooftop bar and 52 oceanfront suites. The Condado Plaza has a new $5 million pool complex and will undergo a lobby renovation in June; the Sands Hotel & Casino Beach Resort is spending $2 million on renovations; and the El Conquistador is adding a second golf course and revamping its spa services. Even American Airlines has spruced up its San Juan hub to the tune of $180 million.

Also in the works, although still four or five years from completion, is a $1.2 billion waterfront project scheduled to include a convention center with an attached anchor hotel.

To handle larger meetings than was previously possible, the Westin, with 600 rooms, has teamed up with the 900-room El Conquistador to offer a one-stop meeting program. The American Academy of Cosmetic Dentistry, which will need 1,000 rooms, and the International Federation of Cardiologists, with 1,300, already have signed contracts for 1997.

The hotel industry in Puerto Rico was built in the '60s, when Castro closed Cuba and jet planes meant that Puerto Rico was only 3 1/2 hours from New York. But that industry "self-destructed in the 1970s and then stabilized in the '80s," said Hugh Andrews, former president of Williams Hospitality (parent of the El Conquistador, the El San Juan and the Condado Plaza) and now president of his own company, International Hospitality Enterprise in San Juan. "Today, almost as many hotels are under construction as there were in the 1960s."

Spurred by concerns about losing the tax status that has made the island home to scores of U.S. companies' manufacturing plants, and encouraged by a pro-tourism governor, Puerto Ricans "see hospitality as our opportunity for growth," Andrews said.

San Juan Convention Bureau executive director Jorge Pesquera said the government "feels that the hospitality industry is a sleeping giant. It now contributes 6.5 percent of our GNP, and our goal is to double that number through legislation and tax incentives that make developers want to do deals here." The plan is obviously paying off: Room inventory has jumped by 50 percent since 1993, from 8,500 to 12,500.

That figure includes the 600 rooms that the Westin will open on Aug. 5-60 percent of which it hopes to fill with meeting attendees. With 48,000 square feet of meeting facilities and 24 breakout rooms, "we definitely see meetings as a very important part of our marketing plan," said sales and marketing director Ramon Sanchez. The commissionable group rate is $145 for August and September.

At the El Conquistador, the island's largest hotel, associate group services director Christie Caraway said she expects the big new names in the neighborhood to "help the exposure of all of us" in the long run, but agreed that the competition "has made negotiations stronger than in the past."

Other hoteliers maintained a steadier stance. At the El San Juan, sales director Ed Carey said his property is having its "best season ever," with 95 percent occupancy and an average room rate of $247 in February. While he acknowledged that the Condado "took a hit" when the Marriott moved in, he added that the fall in rates was short-lived. Rather than focusing on lower rates, he plans to fight back by offering more services, including a cooperative program that will offer guests at any Williams property access to facilities at all three hotels.

But Wyndham Hotels & Resorts vice president Michael Fegley thinks there will be "some adjustment in pricing in Puerto Rico, at least in the short term. New properties will have introductory rates, and that will force the older properties to compete on price as well." Wyndham's rates in 1998 and '99 will probably be 15 to 20 percent higher than in 1997, Fegley said.

When the property opens in September, it will be the only major hotel in Old San Juan, Fegley noted. "And there are some other Caribbean hotels-including our own Wyndham Sugar Bay in St. Thomas-that were hit by hurricanes and are not fully back yet, so there is still some shortage of meeting space in the Caribbean," he said.

Ritz-Carlton's Latin America marketing director, Manny Corral, is equally bullish on the destination. He envisions the Puerto Rico property following the pattern set by the company's first Mexican resort in Cancun, which in 1995 ranked among the top three producers in the chain in both occupancies and room rates. "We don't like to use price discounting as a strategy, though we do expect to have a very visible image in the marketplace as we near our opening date in November 1997," he said.

The CVB's Pesquera said the island is an especially good venue for meetings that bring together participants from North and South America. "Latin Americans feel confortable here because of our culture and language," he said.

Planners familiar with Puerto Rico cheer the new inventory. "I'm pleased to see the new construction going on in Puerto Rico," said Chris Pentz, a pharmaceutical-meeting planner in Philadelphia. "The language and currency are great advantages, as is the tropical environment and the feeling of being far away."

But a note of caution: At $2.50 a bottle in hotel minibars, drinking water can be an expensive commodity on an island. Negotiations for water might well be in order, although hoteliers seemed surprised at the suggestion. "No one has ever asked us to negotiate water," said Fegley. "It's actually more expensive for us to provide water than alcoholic drinks in the Caribbean, but anything is negotiable.