Orlando hotel pipeline continues to fill up with varied projects

ORLANDO, FL— Just when you thought the lodging inventory in this city— home to Disney, Sea World and Universal— couldn’t get bigger, it got bigger. In fact, as 2006 begins to wind down, pretty much every aspect of hotel development— including project announcements, openings, sales, conversions and renovations— has taken place numerous times here within various industry tiers. The year started off on an auspicious note when CNL Hotels & Resorts acquired the 1,582-room Grande Lakes Resort from Thayer Lodging Group for $753 million. The 500-acre complex includes a 998-room JW Marriott and a 584-room Ritz-Carlton along with a 40,000-square foot three-story spa and approximately 200,000 square feet of meeting space. The hotel opened in July 2003, reportedly at a cost of $575 million. CNL had divested assets in 2005, and namely resorts in California and Hawaii— the Hotel del Coronado and the Waikiki Beach Marriott, respectively— and was looking to reinvest the proceeds. “But we never thought it would be one big asset like this,” said CNL CEO Thomas Hutchinson, III. Other less-profile transactions that occurred this year included BRN, Inc.’s acquisition of the 263-room Holiday Inn Orlando from Citi Hospitality, LLC, which traded for $10.4 million, and Equity Inns’ purchase of the 246-suite Embassy Suites Hotel on International Drive from Mississippi Management for $28 million. A key project announced during the year was Hilton Hotels Corp.’s plan to build the first Waldorf-Astoria outside New York on a site adjacent to Disney World known as Bonnet Creek. The overall development includes a 500-room Waldorf as well as a 1,000-room Hilton-branded hotel. “In the past few years, Orlando has very much become a luxury destination, so we’re excited at the prospect of bringing the Waldorf-Astoria brand to the market,” noted Hilton Hotels Corp.’s president and COO, Matthew Hart. Hilton’s partners in the project, which is scheduled for completion in 2009, include GEM Realty Capital, Inc., Merrill Lynch Global Principal Investments and Bonnet Creek Venture, Ltd. No estimates were given on the project’s costs. The project should not be confused with the 1,400-room convention hotel Hilton is constructing adjacent to the Orange County Convention Center. In that project, which is also set to debut in 2009, Hilton’s partners are Rida Development and Apollo Real Estate Advisors. Other projects that either were announced or begun construction during the year include Sonesta Tierra del Sol, the Palazzo del Lago development to be operated by InterContinental Hotels Group on behalf of Hospitality Development Group, Inc. and the Blue Rose development owned by Cohen Meunier and Aguirre Development. A number of these projects are mixed-use and contain residential components that range from wholly owned condominiums to condo hotel units. A significant hotel opening during the year was the 1,500-room Rosen Shingle Creek Resort, which is also located near the convention center and debuted in September. Owner Rosen Hotels & Resorts has seven hotels accounting for more than 5,000 rooms in Orlando. They range from the upscale Shingle Creek to the mid-price Quality Inn and Rodeway Inn. On the conversion front, a Holiday Inn has undergone an extensive $22-million renovation and been reborn as the 227-room condo hotel known as Lexington at Orlando CityPlace. The freshly opened hotel is the flagship of the recently created Lexington Collection brand, which is part of the Vantage Hospitality Group. Meanwhile, Richard Kessler, chairman and CEO of Kessler Enterprises, Inc., this month is pulling the franchise affiliation from his 250-room Westin Grand Bohemian and renaming the property the Grand Bohemian Hotel Orlando. Kessler said that he hadn’t been unhappy with the five-year-old hotel’s performance under the Westin flag, which is part of Starwood Hotels & Resorts Worldwide. Rather, he is interested in building the Grand Bohemian into a brand of its own.