Orlando Remains Strong Meetings, Transient Destination

Marriott International in July will debut its ambitious Grand Lakes project, which includes two interrelated hotel components—a 584-room Ritz-Carlton and a 1,000-room J.W. Marriott. Next year, Omni Hotels will open its 730-room property in Orlando, which will include 70,000 square feet of meeting space, as well as two championship golf courses. Both the Omni and two-pronged Marriott project demonstrate the faith these hotel companies have in the long-term strength of the Orlando market for both group and transient business travel, not to mention its prominence as a leisure destination.

While Orlando suffered from declining occupancy rates and room revenues in 2001 and 2002, most other U.S. destinations experienced similar, if not greater, declines.

A key to Orlando's continued viability in the group business will be the 1 million-sq.-ft. expansion of the Orange County Convention Center, scheduled for completion in September. The expanded facility will allow Orlando to go after larger citywide conventions than it has been able to accommodate comfortably in the past.

Given the continuing pace of new upper upscale and deluxe hotel development in the market, such well-established Orlando properties as the 2,267-room Walt Disney World Swan and Dolphin, now managed as one entity, have responded by undertaking extensive renovations in an effort to remain competitive.

For buyers, the steady stream of new arrivals in the Orlando market translates into a positive negotiating opportunity since new hotels are most likely to offer attractive rates as a way of building trial usage. Considering that Orlando is such a strong meetings destination, buyers are in a particularly favorable position if they can negotiate on behalf of both their group and transient room night needs: The more consolidated their travel spend, the greater their leverage at the bargaining table will be.

For Omni, the decision to build in Orlando was part of a larger national growth strategy. "Our intention is to be a national brand, which means having a presence in the key business gateway cities," said Tom Chevins, senior vice president of sales. "Orlando remains one of the top destinations in the country. In fact, we had a presence in the market next to the convention center up to three years ago, so Orlando's a market we know and one we've wanted to be in. Reentering the market with a brand new product this way, we'll have the latest technology built-in to the meeting space, which is a form of competitive advantage in itself." The current project, which is part of a planned community known as ChampionsGate, is 25 minutes from downtown. The 70,000 square feet of meeting space includes two ballrooms of 20,000 square feet and 25,000 square feet, as well as pre-function space and 12 breakout and board rooms.

Considering the number of very large convention-size hotels in the market, Chevins said the Omni's more modest 730 rooms is another advantage. "You'll see good size meetings there, but not massive ones," he noted. "Consequently, we can provide a relatively intimate experience, which happens to be Omni's strength in the meetings market."

As part of its marketing strategy for the Grand Lakes project, Marriott specifically has targeted the transient business traveler, as well as group and meeting attendees. "We've been accepted in numerous negotiated rate programs for both the Ritz-Carlton and J.W. Marriott," said Bruce Seigel, director of marketing, noting the project's ease of access. "We're only eight miles from the airport and are the first development of this scale you come to. In other words, you don't have to get into the quote-unquote tourist section of Orlando to reach Grand Lakes. Business travelers might be coming for appointments at one of downtown Orlando's six major banks or sales calls at a local corporation."

Seigel also noted Orlando's central location in the state. "As a result, it's a hub for business travelers with business elsewhere in the state. Within a few days, you can hub-and-spoke us to go to Tampa, St. Petersburg and other surrounding communities," he said. "It's quite easy to get around."

Seigel acknowledged that some travel buyers were hesitant to include a property in their 2003 hotel program that had not yet opened. "This is especially true when the opening isn't until midyear because they couldn't see the property in operation when they were finalizing their preferred providers. Many other buyers, however, know the value of the Ritz and J.W. brands and were willing to include us," he said.

Like Omni's Chevins, Seigel said he is aware of how crowded the Orlando hotel market is and that, in order to succeed, new developments have to find ways to distinguish themselves from the competition. "At the end of the day, we're trying to create a new Orlando experience by focusing on the high-level traveler," Seigel said. "These travelers may think they know Orlando, but the combination of Ritz-Carlton and the J.W., which includes the highest-quality amenities the core Marriott brand offers, should bring a new level of service to the market."

With three months until opening, one of the challenges confronting Seigel and the rest of his team effectively is to distinguish in the travel buyer's mind the J.W. Marriott and Ritz-Carlton service standards. They're both at the high end of the spectrum, although the Ritz is at a higher price point. At the Ritz, 40 percent of business is expected to be group, while Seigel projected that this number will jump to 80 percent at the J.W. Consequently, the J.W. will have dedicated offices for meeting planners, while the Ritz will not. The Ritz, however, will have a guest services department.

"From a shared perspective, guests at either hotel will have equal access to Grand Lakes' golf and spa facilities, though both will be managed by Ritz-Carlton," he said. "Similarly, guests at either hotel can sign for meals at any of the complex's restaurants."

In terms of the guest room inventory, the Ritz will be much more suites-oriented. "For starters, there are 92-club level rooms at the Ritz. If you take the club and suite inventory combined, 25 percent of the rooms are specialty accommodations, which is a high percentage," Seigel said. By contrast, only 64 to 66 of the J.W.'s 1,000 rooms are suites.

According to William Peeper, president of the Orlando/Orange County Convention & Visitors Bureau, the addition of the 1 million-sq.-ft. complex to the convention center practically will double the facility's exhibition space when it opens in the fall. Factoring in exhibition, meeting and public space, the center will total 3 million square feet. Meeting space will include 25 large meeting rooms and 94 breakout rooms for a total of 166,000 square feet. The development of the complex actually began five years ago when the local board of county commissioners authorized the acquisition of 230 acres, which had been owned by Universal Studios.

The latest phase of the $75 million renovation of the Walt Disney World Swan and Dolphin, completed this month, entailed replacing the beds in all 2,267 rooms. The newly installed Heavenly Bed has become the amenity most associated with Starwood Hotels & Resorts Worldwide's upper upscale Westin brand that manages the property. "The beds, which feature a custom-designed pillow-top mattress, have become known among business travelers in particular because of the good night's sleep they promise," said general manager Bill McCreary.

The bed is the centerpiece of a redesigned room that has been overseen by the hotel's original architect, Michael Graves. Among other upgrades, guest room armoires have been replaced by work areas that include large desks.

Earlier phases of the Swan-Dolphin renovation included the addition of a flexible 50,000-sq.-ft. meeting space called the Pacific Hall that is divisible into three smaller spaces. Elaborate pre-function and outdoor deck space was added as well. In addition, 10,000 square feet of space was built onto the existing Atlantic Hall.

The objective underlying these changes was to create a range of options for corporate customers. "We now have an even larger variety of spaces," McCreary said, "which should allow us to meet many more of a group's needs."