More Than Just a Place to Sleep
If there is one thing resorts and hotels in the Orlando area don’t have to worry about, it’s people finding a reason to come. With Walt Disney World, Universal Studios and the second-largest convention center in the U.S., Orlando plays host to millions of visitors each year … and they’ve all got to sleep somewhere. But these landmark facilities are moving beyond being just a bedroom for theme park visitors; they are becoming destinations themselves.
“From what we call the leisure side of the business, we have a very strong identity, not only in America but globally – South America, Canada and Europe. Even in Asia,” said Paul Tang, area vice president and managing director of the Hyatt Regency Grand Cypress. “Even though you have a lot of theme parks, like Disney in Paris or Hong Kong, people still want to come to the parents. This is the big theme park.”
As the economy continues to improve, people are starting to travel more. Hotel room night demand numbers provided by Smith Travel Research (STR) indicate there was a 10 percent increase in 2010, 6.2 percent growth in 2011, and a 2.5 percent upturn in 2012. The 2013 numbers were not final, but as of October, they were up 2.7 percent.
Investing in Growth and the Future
With the continued development of the downtown area and the addition of more fine dining and shopping opportunities, there is a chance for Orlando to make an even bigger impression on its guests on several fronts.
The Grand Cypress recently completed a three-year, $70 million project to renovate guest rooms, meeting spaces, the pool and the lobby among other things. Likewise, Harris Rosen, president and COO of Rosen Hotels & Resorts, said his company finished its own refurbishing project to its seven properties at a cost of more than $100 million. More hotels are on the way, too, with Universal’s Cabana Bay Beach Resort beginning to take reservations for arrivals beginning March 31.
In many ways, Orlando businesses that deal with tourists have a symbiotic relationship. Not only are the hotels upgrading, but so are the shopping centers, the downtown area, and of course, places like Walt Disney World, Universal and SeaWorld are constantly coming up with new attractions designed to draw more customers. “As long as the theme parks continue to invest money … anytime you do that, you just bring more people in,” Tang said.
The most dramatic change, though, could come along International Drive, where two big construction projects – I-Shops and I-Drive Live – will bring in a dozen or so new restaurants and thousands of square feet of retail space. It will also represent, Rosen said, a dramatic shift in philosophy regarding the type of businesses found in the tourist corridor.
“(There has been a) philosophical change amongst developers on International Drive, a change which suggests that we’re no longer exclusively a family destination, that entertainment venues like Señor Frog’s and Mango’s Tropical Cafe make sense on International Drive,” Rosen explained. “We now do a fair amount of business in the meeting and convention market and those folks like the upscale restaurants; they very much like the taverns and the nightclubs that we’re now seeing sprout up on International Drive.
“This is a significant change. It used to be that you would have putt-putt and a McDonalds or a Red Lobster as a restaurant. Boy, that has changed dramatically on Sand Lake Road, which is now referred to as ‘Restaurant Row,’” Rosen observed.
Hitting the Market Target
Rosen, whose Rosen Plaza and Rosen Centre bookend the Orange County Convention Center, will be celebrating the company’s 40th anniversary in June. With 6,500 rooms spread over his properties, he said he has not seen the dramatic uptick in business others have reported, but more of a leveling off.
Contributing to that are convention guests who book rooms years in advance but then inform the hotel days before the event that they won’t need as many rooms as they booked. That used to be a fairly rare occurrence, but it’s now fairly common. “It’s not that they’re mean-spirited or doing something inappropriate,” Rosen said, “it’s just that they don’t need the rooms and they don’t know that they don’t need them until they get closer to the arrival date. There’s been more of that in recent years than I remember ever (before).”
Whether they are targeting the leisure or convention visitor, finding the right marketing strategy will be key.
While Orlando will continue to get plenty of visitors from Europe, Tang said the next big wave will come from South America. After that, it will be tourists from Mainland China, where the government has eased visa restrictions and the United States is the No. 1 destination. “Every hotel has to make their own market identification – who is their clientele?” Tang asked. “For us in here, we service not only people who are coming for the theme park; we also have a resort in here that is truly a resort. We have a two-acre pool. We have a lake in there. We have racquetball. We have tennis. So people come here for a diverse experience rather than (just) going to the theme park. Our profile is a little bit different versus somebody who says, ‘I’m going to take my kid and go the theme parks for three days.’ They stay here longer. They do things. They wine and dine. They like the experience and the privacy.”
While Rosen admitted it can be tough to compete with nationally-known brands like the Hyatt, Hilton and Marriott (to name a few), the company takes tremendous pride in that it is locally owned and operated. In fact, Rosen himself likes to “pop in” and check on his hotels to make sure everything is being done the way it is supposed to be.
Not only do people tell him how neat and clean his hotels are, but he recently returned from a trip to find a handwritten note from a high-level executive at Campbell Soup Company, telling him the convention at the Shingle Creek property was the best in the company’s 145-year history. “When you get that kind of comment, it really makes everything worthwhile,” Rosen said.