Wednesday, May 20, 2009

As political leaders cheered Monday’s announcement of the Walt Disney Co.’s plan to build a resort hotel at National Harbor in Prince George’s County, the head of the Washington Convention Center Authority expressed concerns that the new hotel could take a bite out of the District’s tourist trade.

“The product that [National Harbor proprietor] Gaylord Entertainment offers is very different from ours,” said Greg O’Dell, chief executive officer of the WCCA. “One of two things could happen: They should draw some more people to the area, or they could cannibalize some of [D.C.’s] tourism. But it’s really too early to tell.”

“Overall, for the region it’s a plus, and it’s a plus for D.C. specifically,” said Bill Hanbury, chief executive officer of Destination D.C., the city’s tourism agency. “The D.C. convention center and [National Harbor] are chasing two different kinds of customers, where they’re competing with big-box hotels like Hilton, and we’re looking for 16,000 to 20,000 people for a convention.”

Mr. Hanbury pointed out that the Washington area holds 95,000 hotel rooms, so another 500 posed no threat to the city’s tourism business.

“It’s only one half of one percent,” he said. “The supply will be immediately consumed by the demand.”

But that demand has fallen. Mr. Hanbury said D.C. tourism, as measured by hotel room occupancy and price, has declined a scant 2 percent to 3 percent in the past year compared with 15 percent to 25 percent drops in other cities, including New York. Washington’s convention business, on the other hand, is down about 15 percent.

Disney’s proposal calls for a 500-room hotel on the southeastern corner of National Harbor within view of the Washington Monument. Meanwhile, a Marriott hotel project to serve the Washington Convention Center has been delayed indefinitely by financing troubles.

“They’re on Wall Street trying to raise capital and finance,” said Mr. O’Dell. “The equity finance has been good, but now they’re talking to banks about debt financing. It’s one big challenge now.”

Mr. O’Dell offered no estimate of a date for groundbreaking. Neither did Disney.

That did not dampen Prince George’s County’s enthusiasm for the project.

“We’re really elated about this,” said Prince George’s County Executive Jack Johnson. “A huge part of that is just the Disney brand - their reputation is impeccable, and there’s only three or four hotels like this in the world.”

John Erzen, Mr. Johnson’s public information director, said Disney’s announcement came as a surprise.

“It happened quietly, and no one knew about it,” Mr. Erzen said.

He said he did not expect opposition to Disney’s plans, as there was in 1993 when the corporation attempted to build a historical theme park near the Manassas battlefield in Northern Virginia.

Disney said its development at National Harbor will feature no theme-park elements.

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