|By Christopher Boyd, The Orlando
Sentinel, Fla.McClatchy-Tribune Business News
Jul. 31, 2006 - Orange County is home to the nation's second-largest convention center, but the twin caverns of meeting space that face each other on International Drive only snag a portion of the region's corporate-conclave spending.
A new generation of resort hotels is fast eclipsing traditional convention halls as venues for conferences and even trade shows. Not so long ago, many hotels could barely accommodate a Rotary Club luncheon. Today, giant resorts with 1,500 or more guestrooms and hundreds of thousands of square feet of conference space are no longer a rarity.
"When the economy is good and people want to conduct business, they want to do it face to face," said Steve Contos, general manager of the JW Marriott hotel in southwest Orlando. "The dynamics of the market demand more meeting space."
New high-end hotel projects announced this year, and those either recently completed or under construction, are loaded with convention space. As the supply increases, questions linger over how many meeting halls the region can absorb.
"There is always the chance for a problem," said Alan Villaverde, general manager of the Peabody Orlando hotel next to the Orange County Convention Center. "Other markets around the country have overdeveloped. Houston went through it in the 1970s, and Miami Beach went through it in the '60s."
If developers are concerned, you wouldn't know it. The Peabody is planning an expansion that would include 750 rooms and about 450,000 square feet of meeting space -- about half the size of a regional shopping mall. Plans for a half dozen other large hotels have been announced since March, all with copious conference capacity.
Hoteliers today build convention space as a matter of course. Even if the supply of space exceeds demand in the short run, the industry is convinced that conventions and conferences are a growth business. And hotel companies say it is cheaper to build too much space initially than have to retrofit a building if demand increases in the future.
The 1,500-room Rosen Shingle Creek resort, which opens in September, will add another 445,000 square feet of meeting space a short distance from the convention center, becoming one of the largest privately owned meeting venues in the region.
The Gaylord Palms hotel west of Walt Disney World specializes in meetings. Keith Salwoski, the hotel's spokesman, said demand for its 400,000 square feet of convention space is brisk.
"We have a lot of hotels in this market with a lot of meeting space," Salwoski said. "Everybody serves different niches in the market. There is room for more if people are specific about what they are going after."
Salwoski said changes in business organization and communications are driving the meetings trend. As companies merge and their offices are stretched across broad geographic areas, meetings are an opportunity to bring people face to face.
Omni Orlando Resort at ChampionsGate is one of a new generation of resorts designed to accommodate corporate retreats and group gatherings. It is relatively remote -- six miles west of Walt Disney World. General Manager Andrew Papoutsis said that the goal is to offer meeting planners a complete package of rooms, meeting space and recreation.
"We like to keep the whole group here, without having to split it with part of the group staying someplace miles away," Papoutsis said. "That seems to be the preference today."
The Omni, with 730 rooms and 85,000 square feet of meeting space, averages about 500 meetings a year. Papoutsis said this year there should be even more.
But Abe Pizam, dean of the Rosen College of Hospitality Management at the University of Central Florida, said there are limits, even in the ebullient Orlando market.
"The fear is that developers are looking at demand that existed two or three years ago," Pizam said. "We might end up with a large number of convention hotels that will compete against the convention center and each other for business."
Pizam said that if energy costs continue to rise, companies might cut down on meetings -- particularly smaller gatherings that could be handled through teleconferences.
Paul Kiley, sales and marketing director at the Renaissance Orlando Resort at SeaWorld, said the improving telecommunications haven't dampened the impulse of companies and groups to stage group meetings.
"As technology become more sophisticated, there was talk that some meetings would no longer occur, but that hasn't happened," Kiley said. "Our 2007 bookings are ahead of where we were last year."
The Renaissance, with 770 rooms and 185,000 square feet of meeting space, was one of the region's largest convention hotels when it opened in 1985. But new hotels make its once-awesome size seem modest. Wiley said that the ever-expanding meeting business has absorbed the new space, but he said there is some concern that a spate of new hotels that plan to open late in the decade might overshoot the market.
"Markets grow into the supply of space, but it takes time," Kiley said. "There could be a big impact around 2009, when there are a number of projected openings."
The impact of a rapid increase in hotel meeting space on the Orange County Convention Center is unclear. Tom Ackert, the center's executive director, said the new space might take some potential business, but that doesn't trouble him.
"The meetings industry is gigantic, and our sense is that it is healthy," Ackert said. "If the convention center were a business, I probably would grit my teeth every time more hotel meeting space was built. But our role here is to attract business to the area, so we're not concerned."
Christopher Boyd can be reached at firstname.lastname@example.org or 407-420-5723.
Copyright (c) 2006, The Orlando Sentinel, Fla.
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