Jun. 3--Orange County is spending some $748 million to double the size of its convention center in hopes of drawing many thousands more business travelers to Central Florida every year. 

But there's one snag: there might not be enough places for the visitors to stay. 

Officials had hoped a trio of hotel projects with nearly 4,000 rooms combined would be finished about the time the additional 1 million square feet of exhibition space opens next year. 

But with the slump in travel driving down occupancy rates, banks won't lend money to build hotels, and that's left all three International Drive projects, which together would increase the number of rooms on International Drive by about 12 percent, in limbo. 

Some 700 events are scheduled at the convention center through 2026. But "if there's any concern, it relates to hotel development," director Tom Ackert said. "None of those projects are coming out of the ground, and that's a very strong concern to our clients." 

Organizers of several conventions contacted by the Sentinel said a hotel shortage may force them to make other arrangements. 

"If the rooms aren't available, we'd have to cancel and go someplace else," said Nicole McBride, a spokeswoman for Coverings, a flooring- and tile-industry trade show scheduled to convene in Orlando each spring through 2020. 

Relocating an event that draws some 30,000 people wouldn't be easy, but it could be done, she said. When Orange County was unable to give the group the dates it wanted in 2001, it switched to New Orleans on nine months' notice. 

Indeed, Orange County's convention center is facing a potential housing shortage even as some of its largest competitors are adding convention space to attract new business. 

Las Vegas, the only market in the nation with more hotel rooms than Orlando, recently added nearly 1 million square feet of exhibition space to its convention center, bringing the total to about 2 million. 

And Atlanta's Omni Hotel has broken ground on a 600-room tower near the expanding Georgia World Congress Center. Convention bureau officials in those cities say hotel capacity isn't an issue. 

It's no surprise that the Orlando projects -- a new Hyatt, a new Hilton and an additional 1,000 rooms at the Peabody Orlando -- are on hold, said David Borge, vice president in the Orlando office of L.J. Melody & Co., the mortgage-banking arm of real estate services company CB Richard Ellis. 

With fewer people taking vacations and business trips, "there's not much of a need for a new hotel," he said. "Until the market improves, it's going to be hard to sell that to a lender." 

Peabody Orlando hotel general manager Alan Villaverde agrees. 

Villaverde said the 891-room hotel has planned for years to build a 1,000-room addition to accommodate the expected increase in business travelers after the convention center expansion opens. 

"Our intention was to open within six months of the convention center opening," he said. But "with the recession last year and the Sept. 11 catastrophe, most of the lending institutions dried up." 

Belz Enterprises, the hotel's Memphis-based owner, is again talking with lenders, but there's no telling when it will secure financing or start construction, Villaverde said. 

Once the hotel gets the money, construction could take two years or more, he said. Peabody Orlando's Web site says the hotel's expansion won't be finished until 2006 -- three years after the convention center expansion opens. 

Hyatt Hotels won't speculate about when construction may begin on a planned 1,500-room property near the convention center. 

"I think we'll definitely go ahead with it . . . but money has dried up for new hotel development," Vice President John Lyons said. Hyatt originally was looking at a 2005 opening, he said. "What happens beyond that is anybody's guess." 

Hilton Hotels' plans are less certain than either the Peabody's or the Hyatt's. 

Hilton paid $26.4 million two years ago for a plot of land south of the convention center and said it was ready to move forward with plans to build a 1,400-room hotel. 

But last month, spokeswoman Kathy Shepard said of the site, "We're still evaluating what we're going to do with it. There are no definite plans." 

Orlando hotelier Harris Rosen, who owns business hotels on International Drive near the existing convention center, also has purchased land near the expansion site for a possible hotel. Rosen, who usually pays cash for his hotels, didn't return calls. 

Having projects such as the Hilton, the Hyatt and the Peabody expansion on hold isn't unique to Orlando. Hotel development nationwide has come to a virtual standstill, industry experts say. 

"If a client came to me today to talk about a hotel, the first thing I'd ask is, `How are you going to pay for it?' " Orlando hotel consultant David Theophilus said. 

Projects that already have financing are going forward, he said. 

Locally, work is continuing on about a dozen hotels, from a 108-room Hampton Inn on International Drive to the 584-room Ritz Carlton and 1,000-room J.W. Marriott hotels on John Young Parkway near the Central Florida Parkway in south Orange County. Each of those projects is expected to open by summer. 

And Walt Disney Co. is continuing work on its Pop Century resort. Originally scheduled to open in March, a Disney spokesman said the first of its 5,760 rooms probably won't open until sometime in 2003. 

But hotels that are just in the planning stage are anything but certain, Theophilus said. 

"When you start announcing things for 2005, chances are that stuff isn't financed, and it may or may not happen," he said. 

Ironically, the opening of the convention center expansion and uncertainty about new nearby hotels could help solve another problem -- the widening gap between Orlando-area hotel capacity and consumer demand. 

Since 1992, the number of rooms has increased 34.8 percent, from 78,929 to 106,370 at the end of 2001, and tourism officials say another 4,561 may open by year's end. 

But demand, measured by the number of available rooms actually sold, increased only 14.5 percent over the same period, according to Orlando/Orange County Convention & Visitors Bureau figures. 

Because of the widening gap, occupancy at area hotels has fallen sharply in recent years, from 80.1 percent in 1996 to a projected 63 percent this year -- a figure close to the break-even point for some new hotels. 

Bureau officials say that gap between supply and demand should start to narrow in 2003, meaning that occupancy rates will begin to improve as travel increases. 

The convention center will become the country's second-largest once its expansion is completed, with 2.05 million square feet of exhibition space, edging past Las Vegas. Chicago's McCormick Place is No. 1, with 2.2 million square feet. 

When the convention center expands, I-Drive's hotel capacity will be strained. 

Villaverde said he has no doubts that the Peabody's average occupancy will increase once the expansion opens. And projects such as the Ritz Carlton and J.W. Marriott, about five miles southeast of the convention center, should relieve some of the pressure. 

But groups planning to hold large events in Orlando say they are looking for more rooms within walking distance of the convention center. 

Spokesman Joel Cliff said the International Association of Amusement Parks and Attractions already has reserved rooms at nearby hotels during its 2003 and 2004 fall shows at the convention center. Its trade show will be in Atlanta the following two years. 

Where it goes after that may depend on when construction starts on new hotels near the Orange County Convention Center, Cliff said. 

"We have to make some decisions about where our shows are going to be located several years in advance," he said. "We would certainly like to see this situation [with the hotels] resolved soon." 

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