Philadelphia, Los Angeles Markets Set To Ride ?Political Convention? Windfalls

NATIONAL REPORT? ?A one-week event is hardly something for which anyone would build a hotel.” So said John Fox, New York City-based senior vp for PKF Consulting, in response to a query about whether next summer?s national Presidential conventions could impact the status and pace of hotel development in their host cities. ?There are unquestionably many advantages that accrue to a city when hosting a media event the size and scope of either the Republican or Democratic Conventions, but none of those advantages could possibly be measured in terms of an event-specific upturn in hotel construction…at least, not at this comparatively late date? said Fox. That?s not to say there hasn?t been considerable hotel construction in Los Angeles and Philadelphia, respectively during the recent months and years leading up to this point in time. As Chuck Ross, vp for Hendersonville, TN-based Smith Travel Research, said current counts show the Greater Los Angeles/Long Beach area listing 667 hotels offering 82,068 rooms, while Philadelphia provides 34,120 rooms across a range of 240 hotels. With respect to each city?s Central Business District (that part of the city expected to bear the brunt of the conventions? accompanying brief-but-extensive visitor population explosions), Ross reported that Los Angeles features 14,025 rooms in 82 hotels, while Philadelphia embodies 8,216 rooms in 27 hotels. ?Speaking strictly in terms of room supply,? he noted, ?there seems to be little doubt both cities are well equipped to handle big events and the overflow crowds they bring.? A noticeable hotel-building boom has been taking place in Los Angeles as well as Philadelphia, an upsurge in construction that began long before either city won the nod as the venue for 2000?s Presidential conventions. Philadelphia Mayor Ed Rendell has long demonstrated his pro-business demeanor? so much so that the city?s recent increase in hotel room supply has prompted more than a few market-watchers to turn a chary eye toward occupancy levels and ADRs and question the wisdom of bringing significantly increased availability to a city that hasn?t hung out many ?no vacancy? signs of late. Philadelphia Convention & Visitors Bureau President Tom Muldoon pointed out that? at the minimum? the city had to be in the position to commit 20,000 rooms before it could even be considered to host the Republican National Convention, scheduled for July 29 – Aug. 4 next year. Furthermore, the 4,400 or so new rooms that will be on-line by June 2000 can reasonably expect to get an immediate shot-in-the-arm (revenue-wise) via the influx of political delegates and other participants among the coming assembled multitude. As for other immediate benefits that Philadelphia stands to reap, American Hotel & Motel Association President Bill Fisher noted that, at the very least, ?Philadelphia will command national attention and get a chance to shine as a prime convention destination. Certainly, the city will be bustling and, despite the recent hotel building boom, it may well behoove those intent on visiting during the convention to book early.? Adding another on-site viewpoint is Dana Ramus, Philadelphia-based PKF Consulting vp, who reported that ?a feeling of exuberance has certainly gripped the city.? Indicating that the Republican National Convention is, to a great extent, ?little more than a media show,? Ramus noted that the city?s recent spate of hotel building proved particularly timely in that it helped set the stage for Philadelphia to capture the nomination as convention host city. And, to this end, she said, ?it?s especially noteworthy that a number of hotel and attraction openings have been timed for this summer.? But it?s ?The City of Brotherly Love?s? future that looks especially bright to the Philadelphia CVB?s Muldoon. He said that occupancy levels that had hovered in the mid-70% range over the past few years should once again regain that level by 2002 (following an anticipated fall-off to