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New Owners Sonesta International Hotels See Promise in
Former Sheraton Hotel in Downtown Orlando

By Sara K. Clarke, The Orlando Sentinel, Fla.McClatchy-Tribune Regional News

Mar. 2, 2010--The new operators of the former Sheraton hotel in downtown Orlando are hoping to inject some enthusiasm into a part of the hotel market where things aren't going so well.

"We're trying to be a vibrant part, a leader in this downtown community," said Jeff McIntyre of Gemstone Hotels & Resorts LLC, the hotel's new management company. "This hotel has not been that before. We will change that."

As Orlando awaits the opening of a new arena and construction of a new performing-arts center, condominiums yearn for owners and tenants. Hotels have been filling fewer than 60 percent of their rooms for three years running; last year, average occupancy for downtown hotels was just 54 percent -- about the minimum needed to break even by industry standards.

Despite that, Sonesta International Hotels Corp. is pinning its hopes -- and its brand -- on the former Sheraton near Lake Ivanhoe and Interstate 4. The 341-room hotel struggled with debt, bankruptcy and foreclosure before it was sold last year to Resolution Services LLC and private-equity firm Glenmont Capital Management LLC.

The 25-year-old hotel's new operators see an underserved market that is about to blossom; a lack of public awareness about the hotel and its ample meeting space; and possibilities for growth as an arts-focused property, much like the Grand Bohemian at the other end of downtown.

Sonesta's biggest asset may be its human capital. The hotel has wooed away General Manager Mark Moravec from the Orlando Marriott Downtown, a key city-center competitor. The longtime Orlando hotelier brings an entrepreneurial spirit and a creative disposition, McIntyre said, and he already has brought some business with him.

"People know him. They trust him. They follow him," McIntyre said.

The mild-mannered Moravec said he likes the civic-involvement part of working for the new Sonesta. The hotel's managers and owners are trying to invest in the local area as they seek to establish themselves, he said.

"They like to see that we use people within our community, when we're buying things or repairing things or remodeling things," he said. "I just like the civic part of working with this company."

The downtown hotel is Sonesta's only property in the area. The brand's last real presence in Orlando was the Sonesta Villa Resort on Turkey Lake Road, a property that was sold to Westgate Resorts in 1993. Sonesta also made a brief foray into the local condominium-hotel market in 2005, when it agreed to be the management company for Tierra Del Sol, a resort that never materialized.

McIntyre sees "tremendous bones" in the downtown hotel, which underwent a $12 million renovation less than two years ago. The new owners plan to spend more than $3 million on a capital plan to get the property back in shape. That plan includes new televisions, a retooled food-and-beverage operation, improvements to the pool area and work on the air-conditioning units.

Those changes -- combined with the building's 20,000 square feet of meeting space and a giant, open space atop the parking garage near the pool that management considers ideal for concerts and large events -- could help raise the hotel's profile as it competes for guests and meetings in the downtown market.

"We can tent an area for 500 people," McIntyre said of the unused space near the pool. "No one else downtown can do that."

Sara K. Clarke can be reached at skclarke@orlandosentinel.com or 407-420-5664.

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Copyright (c) 2010, The Orlando Sentinel, Fla.

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