Orlando Stays Inviting

Destination Hot-Spot Keeping Busy With Major Hospitality Projects

By Debra Wood

Despite an economic downturn, Orlando’s tourism industry remains strong, and some of the major players are adding hotel rooms in anticipation of even greater demand.

“We are not suffering a recession in the (hospitality) industry,” says Abraham Pizam, dean of the Rosen College of Hospitality Management at the University of Central Florida in Orlando. “It has slowed, but it’s far from a recession.”

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Orange County Comptroller Martha O. Haynie has reported that resort tax collections were 9% higher in February 2008 than February 2007. January resort taxes were up 3% over the prior year.

Cliff Brewis, senior director of editorial for McGraw-Hill Construction, reported in his Outlook 2008 Executive Conference presentation in Orlando that new starts for hotels were up 199% in 2007 over 2006, which was the second highest percentage in the country, after San Antonio, Texas. That represented $569.9 million in new hotel projects in 2007. However, it appeared 2008 would experience about half of the starts of 2007, at $299 million.

“The hospitality industry, despite the mortgage crisis that occurred in the housing industry, has not suffered the same fate,” Pizam says. “These are commercial projects that are large projects financed in a different manner, not necessarily involving banks. Or some of the banks are more solid and have not suffered the same fate.”

Pizam says his comments apply only to traditional hotels, not condo-hotels, in which people bought individual units to finance the property.

“The condo-hotel business did not do well and started going down the slope before we had this mortgage crisis,” Pizam says.

In addition, many projects were in the works before the economy turned, and Pizam says stopping a project that has been on the books for a few years would cost more than continuing construction.

“Convention hotels will be fine,” Pizam says. “Convention hotels, especially in Central Florida, do pretty well. If there’s any slowdown in tourism, it’s not in the convention business, it’s in the leisure tourism.”

Disney Growing

Walt Disney World has two hotel expansions under way and two new developments planned.

“We are constantly looking for new ways to grow our business and deliver immersive entertainment experiences to new audiences,” says Andrea Finger, a Disney spokesperson. Flamingo Crossing, a 450-acre lodging, retail and dining center with 4,000 to 5,000 value-priced rooms, should break ground soon, Finger says. 

Work has begun on a Four Seasons hotel, which will anchor a 900-acre luxury resort with individual homes and timeshare units. It is scheduled to open in 2010. 

Hardin Construction Co. of Orlando began working in 2007 on a 300-room expansion of the Disney Contemporary Hotel. McGraw-Hill Construction Dodge estimates the cost at $110 million. It will include suites and Disney Vacation Club units. Gwathmey Siegel & Associates of New York designed the project.

Balfour Beatty Construction of Orlando is building an expansion to Disney’s Animal Kingdom Lodge, a timeshare property. It is scheduled to open in phases through late 2009.

Finger declined to provide any additional information about any of the projects, as did the contractors Southeast Construction identified.

Timeshares

Disney isn’t the only company building timeshares. Mark Wylie, president and chief executive officer of the Central Florida Chapter of Associated Builders and Contractors in Winter Park, says, “Timeshares are still going strong. It’s almost recession proof from a construction standpoint.”

He indicates a huge market exists for vacation living and that many of the purchasers live in Europe and South America.

“Florida’s No. 1 attraction is that the sun comes up 365 days a year, and it’s warm,” Wylie adds. “Orlando benefits because it is an international destination.”

Turner Construction Co. of Orlando is working on the $155 million, 1,200-unit Hilton Grand Vacations Resort & Spa-Midtown Orlando, west of Interstate 4, near the Orange County Convention Center.

Near Disney

Not far from Disney, Hunt Construction Group of Orlando began construction in April 2007 on the $500 million Waldorf Astoria at Bonnet Creek and the Hilton Bonnet Creek Hotel. The project includes a 498-room, 14-story Waldorf Astoria; 1,000-room, 17-story Hilton; 125,000 sq ft of meeting space; a 24,000-sq-ft spa and fitness center; 5,000 sq ft of retail; golf course; and swimming pools. Smallwood, Reynolds, Stewart & Associates of Atlanta designed the project.

“This is the first Waldorf Astoria built from the ground up in the last 70 years,” says Doug Utt, construction manager with Hunt Construction. “This is the first attempt to figure out what is a Waldorf Astoria, what is in one and then build one. It’s been interesting. It will have many of the same characteristics of that brand, such as Peacock Alley and the Bull and Bear [restaurants].”

The hotel towers topped out in April. A spread-footing foundation supports the two-story, structural-steel frame convention center. A glass storefront system covers the exterior. Completion is scheduled for 2009.

Near the convention center

WELBRO Building Corp. of Maitland, Fla., began work in May 2007 on the $205 million Hilton Orlando Convention Center Hotel. HKS Architects of Orlando designed the project, which includes an 18-story, 1.6-million-sq-ft, 1,400-room convention hotel with 77,595 sq ft of ballroom space, 33,630 sq ft of meeting space and 6,097 sq ft of boardroom space.

There’s also a four-level, 844-car parking garage connected to a two-level, 264-car valet parking deck. Completion is scheduled for next December.

The Peabody Orlando Hotel tapped Balfour Beatty Construction of Orlando to build its new $250 million, 1.3 million-sq-ft hotel. In addition to constructing the 35-story tower, a 140,000-sq-ft convention center and a 2,200-car parking garage, the project includes renovation of the existing hotel. The project should wrap up by the end of 2010.