IT'S ALL very simple: More often than not, bad decisions produce bad results.

Six years ago, the city, instead of pursuing the logical goal of sponsoring a taxpayer-subsidized, 1,200-room headquarters hotel next to the Baltimore Convention Center, got sidetracked and wound up backing a 750-room venture a mile away.

Result: The American Association of Orthodontists swiftly canceled plans to hold its 2002 convention here and moved the 15,000-delegate event to Philadelphia. The Society of Nuclear Medicine also pulled out, sending the word to meeting planners - who book big events years in advance - that Baltimore didn't have its act together.

Now the Convention Center is drawing fewer visitors than before its $151 million expansion five years ago. It would not be fair to call it a white elephant, because the economic impact of conferences held there is still significant.

But the complex of eight exhibit halls and 54 meeting rooms is not living up to its potential - or to advance projections. The Baltimore Area Convention and Visitors Association reports that its convention-related hotel bookings are down an alarming 24 percent this year.

BACVA and its embattled president, Carroll R. Armstrong, are not without blame. But unless the city acts quickly to produce the convenient headquarters hotel conventioneers have been demanding for all these years, the orthodontists and other big organizations will bypass Baltimore again from 2006 to 2010, when their conventions rotate back to the East Coast and this city could be a strong contender.

Yet no improvement is in sight. Years of promises by Orioles owner Peter G. Angelos to build a major hotel have produced nothing. Looking at the options, the Baltimore Development Corp. is talking about sponsoring another city-subsidized headquarters hotel. But Mayor Martin O'Malley's economic development agency shows little signs it has learned from its previous mistake.

Even at this early stage, the BDC is not aiming high enough. Instead of insisting on a 1,200-room hotel, officials already are sending signals they would accept merely 800 rooms. This is puzzling and shortsighted.

With its offer of subsidies, the city is not a beggar in this process and should not act like one. It ought to insist on a hotel developer that can make the Convention Center finally succeed on the scale the city deserves.

Another second-tier hotel is not the cure. While sorely needed rooms would be added, the needs of major conventions would remain unsatisfied. Sponsors want flexibility that only big headquarters hotels can offer through their room selection and variety of function spaces.

Why build a big hotel if room bookings are down? Because added capacity would make Baltimore more marketable. As new conventions are booked, they would fill not only a headquarters hotel but other downtown hotels.

The BDC has hired a top-flight market-study consultant - Chicago's HVS International - to sort out the options. After that report is issued this summer, it's going to be Mayor O'Malley's call. Because taxpayer funds are involved, this becomes a political decision and a potential hot potato.

It also becomes a judgment call, because few industry experts agree on anything. The endless controversy about hotel capacity is a case in point. Just as in 1996, existing hoteliers maintain that the fewer new rooms built, the better.

But theirs is a self-serving argument; tight supply enables them to sell rooms without the substantial discounts that are common in other cities. As a result, Baltimore has become a second-tier convention city with first-tier hotel prices.

Between 1994 and 2000, average daily room occupancy here soared from 69.7 percent to 75.5 percent, while the average price zoomed from $98 to $149 a room. Even though the occupancy rate dipped by 9 percent last year - largely because of Sept. 11 - prices remained stable.

This year's 24 percent drop in convention-related hotel bookings indicates that a bidding war is going on for regional conventions, and Baltimore cannot present a compelling overall package.

Convention business is likely to remain difficult for a few years. Baltimore should use this doldrums period wisely. BACVA needs a shake-up, but unless a true headquarters hotel is built here quickly, reorganization alone would amount only to a reshuffling of the proverbial deck chairs aboard the Titanic.

Why wasn't this crisis recognized before? The answer is simple: Despite the lagging bookings at the Convention Center, money was flowing in just fine. The city's tax on hotel rooms produced more than enough revenue to service its share of the center's debt, fund a good part of BACVA's $8 million annual budget plus return some dough to the general fund. In this situation, no one seemed unduly alarmed or unhappy. Now, however, hotel tax revenues are falling.

Each day the Convention Center is dark, Baltimore misses out on money the city's economy so badly needs. It's time to rev up this potentially mighty economic engine.