Friday, March 28, 2008

Magnet or catalyst?

The Gaylord hotel and convention center in Oxon Hill finally comes into view

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Greg Dohler⁄The Gazette
The main lobby welcomes visitors to the Gaylord National Resort and Convention Center at National Harbor in Oxon Hill.
After years of planning, delays, construction and hoopla, the $865 million Gaylord National Resort and Convention Center will open next week for its first convention on the banks of the Potomac River in Prince George’s County.

The combined hotel and convention center — with 470,000 square feet of meeting space, 2,000 hotel rooms, seven restaurants, five retail shops, an 18-story glass atrium and a 20,000-square-foot spa and fitness center — is unlike any facility in the region, Gaylord executives say. The center might even contend for a future Democratic or Republican national convention, they say.

‘‘Prince George’s could finally stand up and challenge Alexandria,” said Sheldon Suga, senior vice president and general manager of Gaylord National. That nearby Virginia city has taken notice to the tune of spending more than $2 million to attract visitors staying in the Gaylord center — or overflow convention-goers who need a hotel — who can travel across the river via water taxi.

While Prince George’s officials heralded the Gaylord center as the best thing to hit the county since sliced bread — or at least Six Flags America — some have been less enthusiastic. Tourism officials in Baltimore and Washington, D.C., say the Gaylord facility has already siphoned off some of their convention and hotel business.

The planned 300-acre, $2 billion National Harbor development — of which Gaylord National is an anchor — also attracted the 140,000-square-foot National Children’s Museum, which is slated to reopen in 2012, from Washington. In addition, developer The Peterson Cos. of Fairfax, Va., recruited ‘‘The Awakening” sculpture from Washington and promises a waterfront mini-city complete with upscale stores, eateries, condominiums, office space and hotels.

Other Peterson projects have included the Washingtonian Center in Gaithersburg and downtown Silver Spring.

‘‘People in Prince George’s are always saying, ‘We don’t got no classy restaurants,’” said Milton V. Peterson, founder and chairman of Peterson Cos. ‘‘Well, you do now, sweetheart.”

Old Hickory Steakhouse will open in the Gaylord National on Tuesday, when the center welcomes its first guests who are paying $299 a night during a convention organized by vehicle company Saturn. A McCormick and Schmick’s Seafood Restaurant is expected to open this spring in National Harbor.

Art galleries, shops and two other hotels, a 151-room Hampton Inn & Suites and 195-room Westin Hotel, are expected to open in April. A 162-room Residence Inn by Marriott is planned later this spring, while a Wyndham Vacation Resorts with 250 timeshare units and a 184-room Aloft are expected next year. The 450 condominium units being built in the first phase are about 90 percent sold.

‘‘New retail and entertainment, commercial and residential properties will open throughout 2008 and 2009, continuously providing new and exciting experiences to guests and visitors,” said Rocell Viniard, vice president and marketing director for National Harbor. ‘‘Over the next few months and years, there will always be something new for guests to explore at National Harbor.”

Adding businessor taking it away?

Gaylord executives insist that their projects in Maryland, Tennessee, Florida and Texas have added business to those regions, not siphoned it off.

But a 2005 study by hospitality consulting firm HVS International reported that existing convention hotels in the Orlando, Fla., and Dallas markets suffered declines in occupancy and revenue per available room in the months following the opening of Gaylord hotels in those areas. Some of that decrease could be attributed to a downward cycle that was occurring before the Gaylord properties opened, and more time was needed to better gauge the impact, the report says. A PricewaterhouseCoopers study commissioned by the San Diego Convention Center released in 2006 found that a proposed Gaylord complex near San Diego would also reduce hotel room nights and revenue there.

But another study by Economics Research Associates released in 2006 concluded that the impact to San Diego’s existing convention and hotel business would be minimal and that the Gaylord resort would attract more visitors to the area. Moreover, that report said hotels and convention centers in Florida and Texas were able to recover lost business and increase it within an average of two years, according to a news release from the Port of San Diego.

Although tourism officials in Baltimore and Washington have said in published reports that those cities have already lost conventions and hotel room nights to Gaylord National, most reports have lauded the resort’s regional impact. Last year’s annual regional report by the Greater Washington Initiative, a regional economic development marketing organization affiliated with the Greater Washington Board of Trade, named National Harbor one of seven major projects that will ‘‘transform” the region.

Concerns in Baltimoreand Montgomery

The Baltimore Area Convention and Visitors Association this month unveiled a ‘‘Meet Local” campaign to encourage local groups to use Baltimore’s convention center and hotels. A news release noted the ‘‘increasing competition in the marketplace,” citing Gaylord National, more than 2,000 new hotel rooms opening in Baltimore in the near future — 752 of those at the Hilton Baltimore Convention Center Hotel scheduled to open this year — and the expansion of convention centers and new hotels in Washington, Philadelphia and Boston.

The development team for a proposed $550 million, 1,150-room hotel next to the Washington Convention Center includes Bethesda hotelier Marriott International.

Last year, the Baltimore convention group reported that hotel room bookings had declined since 2005 and the area had lost almost 10,000 hotel room nights to Gaylord National. A spokeswoman for the Baltimore visitors association said that CEO Thomas J. Noonan was unavailable for comment.

Baltimore city was one of only three jurisdictions in the state last fiscal year to see hotel-motel tax revenue decline from fiscal 2006, according to state figures. Montgomery County saw a 10 percent increase, higher than the statewide 4 percent rise. Prince George’s County’s increase was 2 percent.

Montgomery tourism officials could not be reached for comment.

Heywood Sanders, a professor of public administration at the University of Texas at San Antonio who grew up in Rockville and has written reports on the convention business, said there is cause for tourism officials in Washington and Baltimore to be concerned. But he doubted Gaylord National was having much impact on the business at the Montgomery County Conference Center in North Bethesda, which is significantly smaller, with less than 100,000 square feet of meeting space.

‘‘The Montgomery facility is much more geared toward local markets,” said Sanders, who earned an undergraduate degree in political science at Johns Hopkins University in Baltimore before obtaining a doctorate in government from Harvard University.

That doesn’t mean there are no concerns in Montgomery. Net proceeds for the Montgomery conference center actually declined in fiscal 2007 to $1.7 million from $1.9 million in 2006, and those figures are estimated to further decrease this fiscal year, according to county budget figures.

Many convention centers in other areas are also not doing as well as officials hoped, Sanders said. ‘‘There is a lot of competition,” he said. ‘‘Usually, the impact isn’t quite what has been promised.”

Meanwhile, Gaylord Entertainment Co. of Nashville, Tenn., which operates other properties along with the signature resorts, went the other way last year. Gaylord’s total revenue rose by 3.5 percent from 2006, to $747.7 million. Net income was $111.9 million, compared with a loss of $79.4 million in 2006.

Where Gaylord National fits in area

With 2,000 hotel rooms, the Gaylord National Resort and Convention Center eclipses the 1,450-room Marriott Wardman Park Hotel in Washington, D.C., as the area’s largest hotel room property, with the Hilton Washington next with 1,119 rooms. The second-largest hotel in suburban Maryland is the Bethesda Marriott on Pooks Hill Road, with more than 400 rooms.

With 470,000 square feet of meeting space, Gaylord National ranks behind only the Walter E. Washington Convention Center in Washington, D.C., which has about 900,000 square feet of meeting space. The Marriott Wardman Park has about 195,000 square feet and the Hilton Washington 110,000 square feet of meeting space.

The Montgomery County Conference Center in North Bethesda has about 100,000 square feet of space.

Source: Hotels, convention centers

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