While the Baltimore lodging industry is anticipated to recover rapidly from the effects of the September 11 terrorist attacks, it will face new challenges due to the ailing economy and dwindling consumer confidence in traveling.  As the city continues to position itself as the epicenter of the �Digital Harbor,� it will become a crucial factor affecting the extent to which Baltimore can attract technology-based companies in an economically slowing environment. As a fly-to market, Baltimore has been fortunate to see air travel resume faster than most of its northeastern neighbors.

Major Demand Changes

Despite a weak economy, the recently expanded convention center fared well during the 2001 fiscal year, which ended on June 30, 2001. While the number of events decreased by 14.4 percent, overall attendance increased by 6.4 percent to 575,374, compared to the previous year. In light of recent events, the Baltimore Convention and Visitors Association (BACVA) is targeting conventions that have expressed concern about traveling to New York City and Washington D.C. Baltimore�s safety is the BACVA�s primary selling tool to attract new business in an effort to make up for cancellations following September 11. The convention center is also focusing on a more regional clientele, specifically those within driving distance to the city. In a similar attempt, Baltimore is redirecting its leisure segment marketing efforts on core markets located within a five to six-hour drive, including Philadelphia and Washington, to lessen its reliance on visitors arriving by air.

To become the leading technology hub and a model for smart growth in the northeastern corridor, Baltimore is further pushing the Digital Harbor concept to create a focus on the city�s growing appeal to technology driven companies. Part of the plan calls for the transformation of old industrial facilities to affordable �plug and go� office space and reasonably priced residences proximate to the work place to draw technology-based companies and further boost economic development. Over the next few years, Baltimore is anticipated to build the infrastructure necessary to leverage more than $4.1 billion in private investment by predominantly technology-based companies.  In addition, $300 million in state funding over the next five years has been requested to help build promenades, bulkheads, parks, and greenways to make Baltimore an even more desirable place to live, work and visit.

The West Side Initiative, the largest redevelopment effort by the city since the Inner Harbor, is anticipated to further revitalize downtown Baltimore. The six-year master plan calls for 250,000 square feet of new retail and entertainment space and an additional 400,000 square feet of office space.

Becoming one of two finalists to receive federal funding to conduct further environmental impact studies, Baltimore took a major step closer to build the nation�s first super-speed magnetic levitation (Maglev) train. If constructed, the $3.8 billion project would link Baltimore and Washington D.C., creating enormous economic and transportation impacts for the region, as well as improving its bid to host the 2012 Summer Olympics. In October, the United States Olympic Committee chose the combined Baltimore-Washington bid as one of the last four contenders to be named a U.S. Bid City for the 2012 Olympic Games.

According to July 2001 passenger statistics, the Baltimore Washington International Airport (BWI) is the fastest growing airport in the U.S. with a 10.3 percent increase over July 2000 passenger totals. In the wake of decreasing passenger volume, however, most airlines have cut their regular schedules by approximately 20 percent at BWI. Although Metrojet and Aer Lingus cancelled all flights to and from BWI, AirTran will begin to service the airport with six daily flights to Atlanta and Boston in December 2001. Confident in a rebound of air travel, Southwest, BWI�s largest carrier, made no alterations to its schedule. Financing for all new airport developments and improvements was secured and construction has begun on the $1.3 billion expansion of the airport.

Major Supply Changes

In 2001, two large hotel developments were abandoned as plans for a 600-room Westin Inner Harbor at 300 East Pratt Street and an 850-room hotel, part of a commercial development at Oriole Park, were postponed indefinitely. The 140-room Sleep Inn at 5921 Baltimore-Washington Boulevard was re-flagged this year to become a Holiday Inn Select. Other projects at various stages in the planning pipeline include the following:

• 225-room Ritz-Carlton at 801 Key Highway, anticipated to break ground Spring 2002;
• 83-room Country Inn Hotel at the Baltimore-Washington International Airport;
• A Hilton Garden Inn at Arundel Mill; and
• A 120,000 square foot mixed-use complex including a hotel at the Baltimore Transportation Center between Charles and St. Paul Street.

Georgi Fsadni, New York
Josie Mok, New York 

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Aaron Greenman
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