Taxpayer-funded Hilton Americas not living up to expectations
Here's an Orlando Sentinel story about taxpayer-funded, convention center-hotels that highlights the Hilton Americas-Houston:
This south Texas metropolis has what Orange County wants: a new, upscale hotel attached to an expanded convention center.
Built at a taxpayer cost of $250 million, the Hilton Americas-Houston is a luxurious 24-story hotel sporting 1,200 nicely appointed rooms, a glass-enclosed rooftop pool and a magnificent view of the city skyline.
Connected by an enclosed walkway to the 862,000-square-foot George R. Brown Convention Center, the Hilton is the cornerstone of Houston's efforts to revitalize its slumping convention business.
But the city, which also spent $165 million doubling the size of the Brown center, did not buy itself a quick fix, at least according to 2004 results.
Attendance at the center actually dropped a bit to fewer than 150,000, if events open to the public -- which typically attract many local residents -- are excluded. And the Hilton Americas on average had almost as many empty rooms as filled ones -- just like the rest of the hotels downtown.
[snip]
After a dozen years seeking a private developer, the Houston City Council finally agreed in 2001 to use a variety of taxes to pay for the Hilton Americas. It opened in late 2003.
Both the hotel and convention center have struggled much of the time, reflecting the plight of many smaller centers. That also has happened in places such as Myrtle Beach and St. Louis, each of which put tens of millions of tax dollars into convention hotels. Myrtle Beach had to refinance its debt because of poor performance, while St. Louis saw its bond rating drop.
The number of people traveling to Houston for trade shows and conventions has dropped almost 70 percent from 1999 to 2003, from 503,796 to 156,699. The 2004 count, excluding events open to the public, was 146,057.
"It's tough," said Ric Booth, the center's assistant general manager. "We don't have Disney. We don't have gambling. We don't have the French Quarter."
What Houston does have is thousands of new hotel rooms, nearby professional-sports facilities, a large theater district and a newly expanded convention center.
All that's lacking is more delegates.
That last part is depressing, since Houston's "benefits," as cited by the reporter, are largely taxpayer-funded. All the reporter left out was light rail.
Tom Bazan recently examined the state comptroller's quarterly room revenue report and discovered that the Hilton Americas' daily average room rate for the first quarter of 2005 was $31.33. As Bazan noted, that's an average room rate more akin to a Motel 6 than a $200 million luxury hotel with rack rates ranging from $159 to $244 per night.
RELATED: Was expanding the GRB Convention Center worth it? (blogHOUSTON), Fitch downgrades Houston bond rating (blogHOUSTON), Does downtown's growth need to slow down? (blogHOUSTON), Hyatt Regency in foreclosure (blogHOUSTON), Jordy Tollett, special hunter with very special shoes (blogHOUSTON)
UPDATE (5-28-2005): Tom Bazan says there is a revised room revenue report that shows an average daily room rate of $88.75 for the first quarter of 2005. That's still not an impressive showing for an almost $300 million, 1200 room hotel, with rack rates of around $200 per night.
Posted by Anne Linehan @ 04/17/05 10:50 AM | Print |
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