Space glut, recession spur alternatives, like recycling rooms

An alliance of two Washington hotel companies that includes the owner of Portland's Holiday Inn Convention Center is hoping for an inside track on developing a convention center headquarters hotel.

Wright Hotels Inc. of Seattle, which also manages the Inn at the Convention Center for its owner, the Portland Development Commission, is planning to renovate the 174-room Holiday Inn and 're-brand' it as the Red Lion HotelÐPortland Convention Center. Wright is allied with Spokane-based WestCoast Hospitality Corp., which owns Red Lion.

'It's great Wright Hotels is going to be upgrading the facility; I think it will help the larger convention center area,' said Abe Farkas, development director for the PDC. But he said the PDC has made no commitment giving Wright and WestCoast first dibs for the headquarters hotel development.

Farkas said the PDC has talked with Wright Hotels during the last two or three years; he called it a 'very, very good outfit.' But it's too early, he said, to designate a headquarters hotel company. 'There are six to eight different firms that contend they can do a headquarters hotel, one way or another. Wright's certainly one. We'll see what happens.'

Huge facility makes debut

With the $116 million expansion of the Oregon Convention Center due to open later this month, Portland will have the largest convention center in the Pacific Northwest. Constructing a headquarters hotel has been on the PDC's agenda for a decade, because the area lacks a nearby hotel big enough to accommodate large conventions. What the city does have now is a weak economy and, thanks to a building boom a couple of years ago, an abundance of hotel rooms.

The PDC's commissioners decided in February to hold off on a headquarters hotel, which would add as many as 800 rooms to an already overcrowded hotel market.

Both WestCoast and Wright Hotels have experience operating convention center hotels in other cities, including Boise and Seattle.

A draft market analysis, done for the PDC and the Portland Oregon Visitors Association, said financing a huge hotel project would be questionable given the current state of the capital markets. It also said dumping that many new rooms on the market would put a lid on hotel rates.

The study suggested that, for now, hoteliers should agree on a common citywide room contract and seek a way to ease the transportation problem that exists because the bulk of the city's hotel rooms are downtown, across the Willamette River from the convention center.

Recycling existing rooms

Also as a stopgap, the study calls for redeveloping existing hotels around the convention center and determining how many rooms could be brought up to headquarters hotel standards. The redeveloped lodgings, the study said, could reduce the need for an 800-room hotel to a 400-room hotel, which could be financed through a nonprofit corporation.

Both the PDC-owned Inn and Wright's hotel were built in the 1960s; Farkas called them 'dated facilities.'

Stephen Barbieri, WestCoast's vice president of communications, said the company is keen to expand the Red Lion presence in Portland. The Benson and the Paramount hotels both operated as WestCoast franchises until the agreements expired at the end of March.

Barbieri said WestCoast, which has more than 90 hotels in 16 states, has an especially strong presence in the West, with more than 60 Red Lion hotels.

Wright President and Owner Stuart Rolfe said the 'bite-sized steps' idea proposed by the market analysis makes more sense than adding 800 rooms to Portland's existing hotel inventory. 'The idea here is to try to figure out something in a creative way that's a win for PDC as well as the property owners in the region.'

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