June 14, 2004 - In the cutthroat convention business, cities want (or need) a 1,500-room headquarters hotel, a convention space totaling many thousands of square feet and ample entertainment for conventioneers.

San Antonio, Dallas, Houston and Austin have the hotels, convention space and entertainment.

Now, so does the North Texas town of Grapevine (population 45,000) after the spring opening of the Gaylord Texan Resort & Convention Center.

The opening of the Gaylord has vaulted Grapevine into the big leagues, enabling it to compete for convention business with big Texas cities.

The Gaylord Texan is making quite a statement, from its desirable location -- five minutes from Dallas-Fort Worth International Airport -- to its 400,000 square feet of meeting space and 1,511 hotel rooms.

Some insiders say it's too early to tell what effect the Gaylord will have on Texas cities, but San Antonio tourism experts say the Alamo City is already feeling the Gaylord's sting.

Four years before the property opened this year, the Gaylord's marketing staff started selling the resort to groups such as The Red Hat Society, which recently brought more than 2,000 delegates to fill the hotel.

John Imaizumi, senior vice president and general manager of the Gaylord, said he likes his chances against the competition.

"We have 130 conventions planned out to 2014," Imaizumi said. "We exceeded expectations and sold out our first weekend." Besides the Grapevine site, Gaylord Entertainment Co. also has the Gaylord Opryland Resort & Convention Center in Nashville and the Gaylord Palms Resort & Convention Center in Kissimmee, Fla., near Walt Disney World's main gates.

Although the Opryland is one of the largest resorts in the world, with more than 2,800 rooms and 600,000 square feet of convention space, the Gaylord Texan also offers a resort-type experience.

It has 41/2 acres of gardens under a glass atrium, five restaurants, a 25,000-square-foot spa and fitness center, and an adjacent 18-hole golf course at the Cowboys Golf Club Marina.

But everything didn't go swimmingly during the Gaylord's pre-opening. It opened about a year behind schedule, mostly because of financing challenges from 9-11.

The recent downturn in tourism also caused Gaylord Entertainment Co., which is based in Nashville, to lower its hotel expectations for its two older Gaylord properties.

For the first quarter of this year, revenue per room was estimated to have declined 8.5 percent, instead of the 10 percent to 12 percent the company originally estimated.

Now Gaylord is experiencing good indicators as the tourism industry slowly rebounds. Gaylord hotels' advanced bookings for its hospitality segment were up 40 percent over last year's first quarter to 262,000 room nights, according to its financial documents.

And the Gaylord Texan secured 708,000 advance room night bookings at the time of its opening.

Although insiders say the Gaylord Texan's biggest appeal is its one-stop-shop atmosphere, they also say it's a make-believe environment reminiscent of Las Vegas.

The Gaylord Texan has themes from several Texas cities, including San Antonio's Alamo and the Hill Country. There's also a faux River Walk that wraps around its Riverwalk Caf and atrium, a nine-story oil derrick, a Yellow Rose of Texas fountain and a giant Lone Star designed into the glass ceiling.

There's even a small vineyard in the back of the property as a tribute to Grapevine, although it won't produce wine for the resort.

Keith Purcell, vice president of sales for the Austin Convention & Visitors Bureau, threw a few darts at the Gaylord Texan: "It's a manufactured environment. You can't walk down the street and meet the locals and enjoy the uniqueness of the city." Another challenge for the Gaylord, Purcell said, is that Grapevine is an "unknown commodity." Unlike Austin or some larger Texas cities, Grapevine has little name recognition.

Still, the Gaylord is already taking little bites out of the convention business of such stalwarts as San Antonio, although the Alamo City's hotel occupancy and revenue levels are strong.

John Solis, vice president of sales and marketing for the San Antonio Convention & Visitors Bureau, said he estimates that his staff has had to compete with the Gaylord about five times.

"They are on our radar," Solis said. "Gaylord is now a part of the bid process along with Dallas, Fort Worth, Houston and Austin." The Gaylord, Solis adds, will continue to be an aggressive competitor because of its newness and its offering lower rates to lure groups to the resort.

But the salesman in Solis says San Antonio is still better.

"You really can't call them a destination," he said. "We are a destination sell because of our ambience, people, golf courses, open air and experience of the River Walk." But the lure of San Antonio's charm wasn't enough this year for the 15,000-member Gold Wing Road Riders Association, a motorcycle club that will stay at the Gaylord for five days next month.

John Keeling, senior vice president of PKF Consulting in Houston, said the Gaylord follows today's trend of creating an entertaining atmosphere, much as does Rainforest Caf, which boasts a restaurant-jungle concept.

Though the Gaylord has plenty for visitors, it doesn't have country music, something for which its company has become famous. So next spring, the Gaylord will open its Glass Cactus, which will feature nightly live music, a dance floor, a seafood restaurant and two decks overlooking a lake.

"(The Gaylord) is going into a market where there's not much of an entertainment destination and they are becoming the entertainment," Keeling said. "To me that's a smart move, since they are adding to something that's missing and trying to make it sizzle." The sizzle is attracting clients and meeting planners such as Sandy Reynolds of Chicago-based Meetings and Events USA. She's coordinating a September symposium at the Gaylord for the Electrostatic Discharge Association, a professional group dedicated to the impact of static electricity.

The New York-based group, Reynolds said, hasn't met in Texas for quite some time and plans to have about 500 attendees and 75 to 100 exhibitors.

One of the challenges of this group, Reynolds said, is it's hard to find a hotel that can accommodate about 60,000 square feet of exhibitor space and have hotel rooms under one roof.

"Once a meeting reaches a certain size, most hotels can't accommodate the group," Reynolds said. "You either have to go to a convention center or convention center hotel. So the Texan has all the space you need with a resort feel." Meeting planner Valerie Reeves, The Red Hat Society's Empress of Events, gives the Gaylord "six months for it to be a great hotel." While there, she said, her group had a few problems because the hotel's staff seemed too lean.

"It makes it easier that you are under the same umbrella," Reeves said from California. "It's nice they have a large convention space because when you go to an actual convention center, you lose people because it's big and has giant poles everywhere." Linda Blair of Kannapolis, N.C., attended the Red Hat convention at the Gaylord and was mostly complimentary about her stay, saying the hotel had "good restaurant choices" and that Grapevine, Dallas and Fort Worth offered good shopping.

But Blair said the rooms weren't large enough to comfortably accommodate her electric wheelchair and that others couldn't easily board the elevator when she was on board in her scooter.

Although the Gaylord is still working out the kinks, Mark Thompson, director of the Plano Convention & Visitors Bureau, said the new property brings much-needed tourists to North Texas, and that helps cities such as his.

Although travelers may not stay in one of Plano's 3,700 hotel rooms, they like that city for its shopping and historic district.

"Now with a new product, (the region) is getting more attention," Thompson said.

"And, more national events are looking for 1,500-room properties." The Dallas/Fort Worth metropolitan area makes up nearly 30 percent of Texas' hotel market, the largest of all Texas metropolitan areas.

The Dallas metro area experienced a scant 0.9 percent decline in hotel revenue, to $291.1 million from $293.7 million in the fourth quarter of 2003, compared with the previous year, San Antonio-based Source Strategies reported.

Its fourth-quarter occupancy was 51.5 percent, less than Houston, El Paso and San Antonio.

In the future, the Gaylord's Imaizumi said, Dallas' number could be affected even more.

"There's enough business for everybody," he added. "We are just hitting a small percent of business. But we are competing with the big convention cities. Easily, the local Dallas folks are saying we are competing with them."

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