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Disney World Postpones Resort Opening; Universal Orlando, Fla., Lays Off 100

The Orlando Sentinel, Fla.
Knight Ridder/Tribune Business News 

Oct. 17--The news got even more grim for Central Florida's slumping tourism industry on Tuesday: Disney World indefinitely postponed the opening of its huge Pop Century resort, and Universal Orlando laid off 100 full-time employees. 

The latest one-two punch underscored how badly the tourism-driven region has been devastated by the Sept. 11 terrorism attacks. 

Pop Century, 5,760-room complex planned to equal the sprawling All-Star resorts as the attraction's largest hotel, was already delayed once this year -- from December to March. 

The first, 2,880-room phase of the $460 million hotel, which was designed to showcase pop icons including the Big Wheel and the Rubik's Cube, now has an indefinite debut date. And the new date for completion of the second phase -- originally planned for 2003 -- is anyone's guess. 

"You're always looking at the future, and right now it's difficult to forecast with certainty because of changing economic conditions," Disney spokesman Bill Warren said. 

Disney's main Orlando competitor, Universal Orlando, had bad news of its own on Tuesday. 

About 100 office workers, from clerks to executives were laid off. Spokesman Jim Canfield said layoffs were "the same response being made by many companies today." 

Although Canfield declined to be specific about those laid off on Tuesday, others said the impact stretched through several departments, including finance and human resources. On the West Coast, Universal Studios Hollywood laid off 80 employees last week, former workers said. 

Disney and Universal both say attendance is down, but decline to provide figures. Industry estimates say theme parks in Southern California and Orlando are currently about 60 percent of normal. 

The postponement of Disney's Pop Century opening is the clearest indication yet that business isn't good. The region's theme parks and hotels were already suffering because of the soft economy, and the terrorist attacks made the situation dire. 

"Disney is doing the right thing to postpone this hotel," asid John Robinett, a senior vice president at Econimcs Reseach Associates in Los Angeles. "They should delay any major spending project they can." 

Hotel occupancy, which plummeted after Sept. 11, has improved to the mid-double digits in recent days. But preliminary figures for September show an average occupancy rate of 44.6 percent at Central Florida hotels, compared with 62.1 percent during the same month a year earlier, Smith Travel Research reported. Until visitors are less fearful of flying, hotels are likely to continue to suffer. 

"Disney is clearly afraid of overbuilding, and they should be, with the slump we're seeing in out-of-state visitors," said Abe Pizam, professor of tourism management at the University of Central Florida. 

The decline is also responsible for Disney World closing some sections of its resorts. That's a strategy management has followed before during slow periods. Warren said all existing Disney World hotels, with a total of some 20,000 rooms, are currently open. 

But in some Disney hotels, entire floors may be closed. In others, which are low-rises, some buildings will be closed. 

The closing further reduces Disney World's need for its 40,000 hourly employees, most of whom have already either had their work schedules sharply trimmed or been furloughed until further notice. Disney World has laid off 1,400 workers this summer and Universal cut about 50. 

Pop Century is planned as a "value resort," in Disney World parlance, meaning the rooms are priced at about $80 a night. Located near Disney's Wide World of Sports complex, Pop Century is to be essentially two hotels, each with 2,880 rooms, a separate check-in area, lobby and food court. 

The hotels' design and decor will pay tribute to the toys, fads, technological advances, dance crazes and popular sayings of the 20th Century. 

Warren said visitors who already booked at the hotel will be offered comparable rooms at other Disney resorts. 

Pop Century isn't the only project affected by the slump. Last month, Hilton Hotels Corp. said it would hold off on plans to build vacation ownership properties in Las Vegas and Orlando. 

Richard Maladecki, president of the Central Florida Hotel & Lodging Association, said on Tuesday he isn't aware of other construction or expansion projects being delayed because of the downturn in travel. 

Based on construction projects announced before Disney's decision to shelve Pop Century, the Orlando/Orange County Convention & Visitors Bureau said the number of rooms in Orange, Osceola and Seminole counties would grow to 120,500 in 2004, from 105,600 today. 

But "I would suspect all of those would not come on line," Maladecki said. 

Despite the drop in business, Gaylord Entertainment says it won't delay its Opryland Hotel Florida in Kissimmee. The 1,400-room hotel is scheduled to open in February. And an executive with Rosen Hotels & Resorts said the company hasn't altered plans for a 1,500-room resort near the Orange County Convention Center. 

"It would be unwise to take today's circumstances a draw a pessimistic conclusion" about what demand might be several years from now, Rosen Vice President Garritt Toohey said. 

By Robert Johnson and Todd Pack 

-----To see more of The Orlando Sentinel, or to subscribe to the newspaper, go to http://www.orlandosentinel.com 

(c) 2001. Distributed by Knight Ridder/Tribune Business News. HLT, GET, 


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