Too much room at the inns?

• Author: Dibble, Marcia C.
• Position: Hotels forecast strong future following Olympics

Conventions, travel groups fill post-Olympic vacancy

Although some feared that Salt Lake City's hospitality industry would feel the post-Olympic fiscal slump experienced by Atlanta and Sydney, our region's industry insiders see a robust future.

"I think emotionally we all are [feeling a slump)," acknowledges Steve Lindburg, general manager of downtown's Hilton. "I know that my team is, having planned for six, seven years.... But our occupancy seems to be holding, and CVB (the Salt Lake City Convention and Visitors Bureau) bookings are very solid for the balance of the year."

Steve Lundgren, general manager for the downtown Marriott, says that his group didn't even prepare for the possibility of an economic slump, feeling that the area's promoters had laid a strong foundation for healthy post-Olympic business.

"There are actually more group rooms booked in 2002 for the last 10 months of the year than we had for the entire year of 2001," Lundgren observes. "I think it's because we were thoughtful and prepared and planned for years. In Atlanta, I don't think they focused on the post-Olympic time period. We've gone through a very difficult period for the past four years, and it will take us years to get back to where we were prior to the announcement we were getting the Olympics. But in the industry, we all planned very carefully and worked very hard to see the growth and the payoff we're seeing now."

"All of our numbers are stronger this year than last year by a substantial amount," he adds, "Last year was the worst year in the city for a decade."

That might sound counterintuitive--that in the year just before a winter Olympics, the hospitality industry of the host city, already a major winter destination, should have found itself in a terrible rut. But, in anticipation of the world Olympic party, Salt Lake experienced a 63 percent increase in hotel rooms between 1994 and 2002, to a glut of 17,400 rooms. That excess ultimately resulted in hotel occupancy rates falling to an astonishing low of about 50 percent at the end of last year, according to the Utah Hotel & Lodging Association's Rocky Mountain Lodging Report--a fiscally dangerous point for many, since the bulk of hotels need to stay in the 60 to 65 percent occupancy range just to stay in the black.

A number of those new hotel rooms (a whopping 775) came in the form of the Grand America, built by hotel and oil magnate Earl Holding, whose low-priced downtown Little America, with 850 rooms...