Hilton Convention Center Hotel sees business pick up

The Hilton Baltimore Convention Center Hotel has performed better in its second year of operation than during its first full year, with bookings and revenue on the rise. Managers predict the city-owned hotel will end 2010 in the black.

Although the 757-room hotel has not lived up to expectations — the $301 million project began in 2005, before the recession caused hotel occupancy rates to plummet around the country — city officials say it is beginning to meet many of the goals they had when it opened in August 2008, such as providing jobs for hundreds of city residents and helping Baltimore land more conventions.

The Baltimore Hotel Corp., the hotel's owner, released figures this week that show the hotel has seen bookings, revenue and staff increase during the first eight months of 2010.

The figures show that the hotel is earning sufficient revenue from bookings to cover the debt service on bonds sold to pay for its construction and that the city has not been forced to dip into reserve funds to address financial shortfalls.

The statistics also indicate that the hotel is indeed serving as Baltimore's convention headquarters hotel — and helping the city lure large meetings and conventions that need more than one hotel to accommodate attendees.

"It continues to be a game-changer for us," said Tom Noonan, president and chief executive of Visit Baltimore, the city's tourism agency.

In the fiscal year that ended June 30, Visit Baltimore booked 19 citywide conventions, up from seven the year before. Many of the groups would not have considered Baltimore without a convention headquarters hotel, Noonan said. "[The Hilton is] a key partner for us, and they're doing a great job."

M.J. "Jay" Brodie, president of the Baltimore Development Corp. and chairman of the Baltimore Hotel Corp., said the figures show the hotel is performing well even in tough economic times.

"We want people to know that we are doing as well as we can do in this recession," Brodie said. "We are at break-even. We are paying our bills. We have never taken a penny out of our reserve funds. We are pleased to be where we are in meeting the goals we set, and we look forward to doing even better in the future."

October will be a particularly strong month for the Hilton, said Irene Van Sant, project analysis director for the BDC. The Hilton is "booked solid" this month, she said. "We are over 80 percent occupancy, and 60 percent of that is group business."

When construction began in February 2006, the Hilton was one of the most expensive projects ever undertaken by the city. Some elected officials voiced concern about the city's building such a costly project and warned that Baltimore would have to cover any budgetary shortfall if the hotel failed to make enough money to meet expenses.

To show that the hotel was paying for itself, Brodie pointed to statistics provided by Capital Hotel Management, a Massachusetts-based company that monitors the hotel's operations.

Among the key points of the company's report:

•Hilton projects that 177,388 room nights will be booked at the hotel in 2010, up from 153,404 in 2009.

•The hotel is expected to end 2010 with an occupancy rate of 64.1 percent, up from 55.5 percent in 2009 and 36.9 percent in 2008, when it was open for only 132 days.

•59 percent of the hotel's business in 2010 has been group business, including conventions and meetings. The rest comes from leisure and business travelers, tourists and others. The breakdown for 2009 was 56 percent group business and 44 percent from other kinds of travelers. Operators say they expect the percentage of group business at the Hilton eventually to rise closer to 70 percent.

•The hotel had the equivalent of 450 full-time employees as of June 30, up from 413 on Dec. 31. Of the 450 employees on the payroll at present, 349 are city residents. The additional staffers were hired because of increased business in 2010, officials said.


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