|By Nancy Sarnoff, Houston
ChronicleMcClatchy-Tribune Regional News
Jan. 22, 2008 - The city is considering plans to bring a second convention center hotel to downtown, in an effort to take Houston one step closer to becoming a top convention destination.
Officials involved said Houston gets scratched off the lists of a lot of convention planners because it has a limited number of downtown hotel rooms.
"The current convention center hotel is filling up, and Houston can attract more conventions if it had more hotel rooms in the Central Business District, and specifically, close to the George R. Brown Convention Center," Mayor Bill White said Monday.
The plan is in its early stages, with input being collected from groups that include the Greater Houston Convention and Visitors Bureau, the city's Convention & Entertainment Facilities Department and the Houston Convention Center Hotel Corp.
"We're trying to figure out what it would cost and how it would get financed," said Richard Campo, board chairman of the hotel corporation.
The nonprofit group developed the city-owned $316 million, 1,200-room Hilton Americas-Houston convention hotel.
A possible site for a hotel would be a parcel just north of the new Discovery Green park, bordered by Rusk, Crawford, Walker and Avenida De Las Americas. The hotel would essentially mirror the Hilton Americas.
White said other sites in the area would be considered, including city-owned property.
The project, White said, would be "one of the larger hotels in Houston," with a "first-class national flag."
Houston Endowment, which owns about 60 percent of the parcel adjacent to Discovery Green, said it would consider selling its land for a convention hotel. "We don't have an interest in holding this forever," president Larry Faulkner said. "We would like to see it used in a way that furthers the well-being of this city."
Such a hotel could have an economic impact of $250 million annually, said Campo, explaining that another big hotel would attract larger conventions attended by more people who would dine in restaurants and rent cars. Other hotels would benefit from spillover.
"This would be a great thing," said Nick Massad, president of American Liberty Hospitality, which is planning to build a 250-room Embassy Suites near Discovery Green, at the corner of Dallas and La Branch. "We've been a proponent for additional rooms, especially near the George R. Brown, for a long time."
Hotel consultant John Keeling said five new 200-room hotels wouldn't have the same impact as one 1,000-room property because conventioneers like to put their delegates in as few properties as possible. Full convention hotels help other hostelries raise their rates.
Downtown hotel occupancy was 66.1 percent through November of last year. It was down slightly because 2007 was not a strong convention year, said Keeling of PKF Consulting.
The Hilton Americas has been performing well, Campo said. But for a new hotel, the ideal scenario would be for a private developer to build it.
The mayor said there are "significant pools" of private capital available that did not exist when the Hilton Americas was financed.
Greg Ortale, president and CEO of the Greater Houston Convention and Visitors Bureau, told the Chronicle on Monday that some type of public support would be needed.
Owners prefer to build 200-room hotels that typically return a profit of 15 percent to 20 percent a year, he said. Large hotels earn closer to 10 percent to 12 percent a year, he said.
Chronicle reporter L.M. Sixel contributed to this story.
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