Mar. 13, 2006 - After years of relative stagnation, the convention-area luxury-hotel market is beginning to percolate. The 891-room Peabody Hotel Orlando is about to announce a 750-room expansion across the street from the center, and I-Drive hotelier Harris Rosen expects to open the 1,500-room Rosen Shingle Creek Resort about a mile to the south. And ground was broken this month on the 470-room Westin Imagine Orlando Residences at the Village of Imagine, across the street from the convention center's north concourse.

West Paces Hotel Group LLC last summer said it would open a Solis Resort & Spa with 300 rooms near the convention center in 2008. And last month, a Miami development group proposed a giant resort for Universal Drive to be called The Blue Rose, containing five towers and 1,300 high-end rooms.

Central Florida has one of the world's busiest convention centers and more hotel rooms than some cities have people. Yet a shortage of high-end resorts near the Orange County Convention Center could undermine the travel industry's dream of making Orlando the nation's corporate-meeting capital.

Three projects -- two in the works, another close to construction -- promise to add more than 2,600 first-class rooms within a short distance of the center. But tourism promoters say still more rooms are needed.

"It's like having a half-built house. The convention center is built, but you don't have enough hotel rooms around it," said Lori Kisner, who organizes Surf Expo, a water-sports trade show held at the convention center twice each year.

From Walt Disney World to downtown Orlando, Central Florida has an assortment of luxury rooms, but convention planners are picky: Only those very close to the meeting hall really matter.

No one knows how many events might have chosen other locations with more-desirable lodging options. Though Central Florida has nearly 112,000 hotel rooms, most are a long way from International Drive and lack the extras business travelers covet.

Bill Peeper, president of the Orlando/Orange County Convention & Visitors Bureau, said the new rooms can't be delivered fast enough.

"In many cases, we continue to lose business because we don't have what our customers say is an acceptable inventory of the right kind of space," Peeper said.

The American Osteopathic Association, which drew 10,000 people to the convention center in October, said top-end hotel rooms are very important to its members.

"We frankly need more luxury rooms around the center," said Ann Wittner, a convention planner with the association. "But progress is coming."

Quantifying a luxury hotel isn't easy. It needs rooms and suites that meet business travelers' expectations, as well as superior restaurants, finely appointed meeting spaces and a mix of recreational extras.

The AAA travel organization, which ranks lodging, reserves four- and five-diamond ratings for the best hotels. Orlando has no five-diamond hotels, but it has a number that meet four-diamond standards.

Only one, the Peabody, is within walking distance of the convention center. Others within a radius of several miles include the JW Marriott, the Ritz-Carlton, the Renaissance at SeaWorld and Loew's three Universal Orlando resorts, Portofino Bay Hotel, Hard Rock Hotel and Royal Pacific Resort.

Area's 'Catch-22'

Abe Pizam, dean of the Rosen College of Hospitality Management at the University of Central Florida, said it is hard to quantify the demand for luxury rooms.

"I don't think anybody knows how many of these rooms we might need," Pizam said. "I've heard we might need several thousand."

Pizam said the proximity problem looms largest.

"Walking distance to the convention center is best," Pizam said. "Otherwise, you need to have a convenient shuttle that will get you there in five or 10 minutes."

Kisner, the Surf Expo organizer, said the need for more rooms near the convention center is a dilemma, because hotel builders want lots of trade shows that will use their rooms before they build, but trade shows won't book the convention center unless the rooms are there.

"It's really a Catch-22," she said.

The higher the construction costs, the more operators need to charge for rooms. For hotel owners to operate efficiently, they would need a steady stream of conventions that draw people willing to pay premium room rates, which can run more than $300 a night.

Developers and lenders, worried that there might not be enough high-end conventions to justify construction, have been leery about building such projects. Central Florida's cachet is family, not business, travel.

Kathie Canning, deputy general manager of the Orange County Convention Center, said developers want assurances that they will be able to fill rooms most of the time.

"We've been waiting for some additional quality hotels since even before we expanded the convention center," Canning said. "We have clients who have been waiting for years and years for the Peabody to announce its expansion plans."

Are concerns exaggerated?

But some hoteliers say concerns are exaggerated.

"I don't see a demand for more luxury rooms near the convention center. Three, four or five years from now that might change," said Richard Kessler, president of the Kessler Group, which owns two hotels on International Drive, as well as the Westin Grand Bohemian, a luxury hotel in downtown Orlando.

Kessler said marketing the convention center, rather than dwelling on lodging availability, should be the region's primary concern. According to Smith Travel Research near Nashville, Tenn., Orlando's hotel-occupancy rate was 66.4 percent in January.

"January should be a good month," Kessler said. "When you are running at 66 percent occupancy, there is obviously an adequate supply on the market."

Christopher Boyd can be reached at [email protected] or 407-420-5723.

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