X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

Harris Rosen had a vision of what Orlando’s hotel market could become shortly after Walt Disney World opened the gates to the Magic Kingdom. Over the past 35 years, he has acquired and developed seven hotels within the city’s theme park and convention areas, and is investing substantial dollars in refurbishing those properties over the next several years. Having started in the hospitality industry as a sales rep at New York City’s Waldorf Astoria, the president of Rosen Hotels & Resorts is considered an industry legend and the University of Central Florida’s Rosen College of Hospitality Management is named in his honor. Rosen recently spoke with GlobeSt.com about the state of Orlando’s 112,000-room hotel base.

GlobeSt.com: Is the Orlando hotel sector in any danger of being overbuilt?

Rosen: Occupancies in this market have been on the decline the past several years, ever since Sept. 11, 2001. To be quite candid, our inventory has been pretty flat since then. We recently added a fairly large property to International Drive and the Peabody has also added rooms near the Orange County Convention Center. The addition of those roughly 2,500 rooms will not be a negative. It will help us from a marketing perspective to have more rooms contiguous to our convention center.

As occupancies decline, hotels that are struggling will close. That’s sort of the natural evolutionary process. Financing is difficult to obtain nowadays and that in and of itself will mitigate development. As hotels close, we will stabilize at a particular inventory that is probably O.K.

When the economy rebounds, then the rooms that we have in Orlando will serve us quite well for the next four to six years. It might take that long before we are back to an economy that is generating new jobs. But we’re not going to see any stabilization in terms of occupancy, even if we don’t add any rooms, until the economy rebounds.

GlobeSt.com: Are efforts to attract more convention business to Orlando working, and what effect are they having on your hotels and others locally?

Rosen: What we have discovered is that we are becoming a leading meetings destination, and with the recent expansion of our convention center we are capable of competing with anyone in the US and beyond for meetings, conventions and exhibits. We offer a tremendous amount of amenities for the convention delegate.

We have become more sophisticated in that the number of restaurants within walking distance of the convention center has expanded exponentially. We have gone from dozens of restaurants in the area to hundreds. That bodes well for our ability to attract a more sophisticated consumer.

The two convention centers and the square feet that we have now are comparable to all the major destinations and puts us squarely in second place behind Las Vegas. There seems to be a perception that Vegas is hurting a bit, and based on our conversations with some associations they are more comfortable coming to Orlando now and avoiding what they perceive as an area that is struggling financially and may not be able to provide the quality of service that they once did. It’s nice that people are rediscovering Orlando and availing themselves to all the amenities we have for the convention traveler.

We will continue to expand the convention market, and that market is growing. We are witnessing more and larger associations inquire about the space available in Orlando, and we are delighted with that.

GlobeSt.com: Given the recent expansion pact Gov. Charlie Crist signed with the Seminole Tribe of Florida for its casinos around the state, does it make any difference whether Orlando has no legalized gambling?

Rosen: As someone who owns close to 7,000 rooms in the area, I have been asked before to support a gambling initiative and I have declined. I’m just really happy with Orlando the way it is. We offer a good alternative to the sophisticated adult entertainment one would find in Vegas and other venues, and that’s a wholesome family oriented perception that I think works well for us. I’m not so sure that it hurts us not to have gambling, but it also doesn’t hurt us that we don’t.

What I like to tell people is that what happens in Orlando, you can tell anybody. There are no secrets, it’s kind of an open book, which is an interesting contrast to Las Vegas. People like variety and choices, and there is no greater choice than Vegas on one hand and Orlando on the other.

People are nervous about signing convention contracts with places that are having financial difficulty. The greatest advantage to our little company is that we are debt free and we survive at occupancies and rates that other hoteliers may find impossible.

GlobeSt.com: What opportunities do you see for the Orlando market for new hotel development or redevelopment at this point?

Rosen: I see zero opportunities for new development. There are many hotels that are for sale and struggling desperately to survive. Most of those are smaller properties away from the convention center, generally in Osceola County where there is a significant decline in occupancy. The major properties that are still able to tap into the convention, international and leisure markets are not doing terrifically well, but they are doing just fine, and that is a wonderful mix that we have here in Orlando. It gives us a well-balanced equilibrium, but we can always do better.

There are some great opportunities for those who would like to purchase properties that are closed, about to close or in foreclosure. They will have to make some investment in refurbishing and marketing.

I bought my first hotel for $20,000 in 1974, when there was an oil embargo and virtually every hotel in Orlando was in some form of financial difficulty. It was a stupid thing to do at the time, but it worked out well for me. There are opportunities out there for brave souls who are willing to work very hard and bet on the come.

GlobeSt.com: You are currently investing $200 million from cash reserves to refurbish your current hotels. How is that working out so far?

Rosen: We have been pleasantly surprised at how competitive the construction market is now, and as a result we are able to do all of this work not for $200 million, but for half of that.

We kind of refer to what we’re doing as the Rosen Stimulus Package because so many firms are desperate for work. From a cost perspective, it was perfect timing. From a sales and marketing perspective, we are hoping that this investment is someday perceived as being worthwhile.

GlobeSt.com: When you bought your first hotel 35 years ago, did you ever envision the Orlando hotel market becoming this big?

Rosen: The short answer is no. I never imagined that Orlando would be a great convention destination. As we moved into the late 1980s, I became convinced that Orlando had the potential to be a great convention city. I have hotels on either side of the convention center because nobody else was interested in building a hotel contiguous to the property.

All of the big hotel names just laughed when they were told we would be a big convention destination one day. They’re not laughing anymore.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

Dig Deeper

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.