Tuesday, February 5, 2008
Hotels:The Sign of a Great Economy or an Ailing One
I work in the hotel industry so I'm particularly excited about this. The 757 room Convention Center shows a huge commitment to the city of Baltimore and the belief that Baltimore's tourism economy will be viable for decades to come. It takes decades to make back the money one spends building and operating an upscale hotel so the owner of a hotel has to have great faith before committing such huge funds.
In addition to the convention center new hotel construction is drawing board for every big development project. The State Center Development, Westport, Canton Crossing, and the Westside of Downtown are slated to have an upscale hotel while two have already been built at Inner Harbor East. These are just new hotels this doesn't even account for the dozens of hotels that vary in age and amenities. With all this new hotel construction the new hotels will no doubt have features like Hi-Def TVs, WI-FI Internet access in all areas and over all more modern decor in sleeping rooms, conference rooms, banquet rooms, and restaurants. Will this mean that older hotels built from the 1980s and 1990s will lose business due to increased competition? Well they're not going down without a fight.
Many of Baltimore's upscale hotels are going through, have gone through or are slated to go through massive renovations. A general rule of thumb is that hotels need to be renovated every 5 years to keep current with market trends, technology, and decor. The cost of renovating a hotel with several hundred rooms, multiple restaurants, a couple dozen conference and banquet rooms is staggering. Hotels try to go as long as possible without renovating (I know from personal experience) but you can't delay the inevitable. The same projection that warrants the building a new hotel is used for renovating an existing one. You'll eventually make your money back. If these hotels didn't think Baltimore had the economy to support their hotels they wouldn't renovate and may even close but they're renovating mostly to the tune of eight figures.
If you read the paper and get depressed about all that's wrong with Baltimore such as a decaying housing stock, population loss, out of control murder rate, and a failing public school system just look at the construction and renovation of hotels to cheer yourself up because it speaks volume about Baltimore's economy and that thousands will travel here whether for business or pleasure.