Baltimore Hilton: Shortcomings in Project Planning and Management

Introduction

Convention business is big business in the United States. Cities that have been able to offer unparalleled services in the meetings and convention industry have benefited tremendously from the inflow of significant dollars that come with this trade. Many cities across the US have come up with the idea of building publicly-funded hotels close to convention centers to tap into the huge growth potential brought about by the convention industry. Baltimore is one such city. The largest city in Maryland, Baltimore’s strategic location on the northern side of Chesapeake Bay has fueled the city’s economic and social development for many decades. In recent years, the city has been transformed into a Mecca of dazzling new hotels, business retail centers, and high-rise office buildings. The emerging opportunities must have informed the decision to publicly finance the construction of a new state-of-the-art hotel called Hilton Baltimore. The project – costing over $300 million – involved constructing 757 executive guest rooms and 60,000 square feet worth of exotic meeting and convention facilities (Degregoria, 2005). Managing such a project must have been a tough undertaking for project managers involved. It is the purpose of this paper to critically evaluate how this project was planned and executed.

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Baltimore Hilton’s Expected Outcomes

The Baltimore Hilton Convention Center Hotel (BHCCH) is undoubtedly the largest in downturn Baltimore. The decision to build the $301 million hotels in downtown Baltimore was hotly debated and contested long before the commencement of the construction process. Different viewpoints were fronted from many quarters regarding the hotel’s construction. This was understandable since the project was supposed to be funded using taxpayers’ money. As such, the project managers needed to liaise with all stakeholders to ensure the interests of all members were taken into consideration (Orr 2004). The fundamental challenge for all the project managers involved in the planning process was the attainment of all project goals and objectives while taking care of all preconceived constraints. This is the core function of any project management activity – to bring beneficial changes and additions of value.

One of the expected outcomes for the project was to keep the city at a competitive advantage over other cities that were competing for a share of the convention industry. It was widely believed that this hotel would largely boost the tourism sector and kick-start the lucrative convention industry in the local scene (Degregoria 2005). Indeed, major cities in the US had rejuvenated their bids to lure convention organizers into their own backward. But none of the cities had a one-stop facility that could offer quality convention facilities while ensuring the accommodation needs of all convention attendees were met under one roof. It was widely believed that the future of the already underperforming Baltimore Convention Center looked gloomy if the hotel was not constructed. Putting the hotel in public trust was also viewed as an idea that would bring favorable outcomes as all the proceeds arising from the hotel were expected to be channeled towards the development of the city (Cannarsa 2008).

Areas of Concern

Garnering the support needed to validate the construction of the hotel was not an easy task for Baltimore’s City Council due to the concerns raised by stakeholders. This hotel was to be constructed using taxpayers’ money. However, many tax and ratepayers within the area felt that spending such a huge sum of money in the hope that it would be recouped through tourism was an exercise in futility. The public shared the view that the hotel would inevitably run at a loss, ultimately resulting in reliance on other sources of revenue for survival (Degregoria 2005).

Some stakeholders also felt that the cost of constructing the hotel was not being properly defined in a manner that would have enabled them to perform a cost-benefit analysis of the hotel. Some members within Baltimore’s City Council were utterly unconvinced by the assertion that the hotel was capable of paying its own debts through using the revenues generated from its own operations. These arguments clearly bring into light some of the most common constraints experienced in project management – budget and scope (Moses 2009). Stakeholders were kept in the dark about the project’s expected costs to the extent of causing disdain in some quarters. The scope of recouping the funds borrowed for construction was also deficient.

Due to deficiencies in project management, a firm that had initially won the bid to construct the 757 rooms hotel in downtown Baltimore had to relinquish its responsibilities as it was totally unable to sustain its projected costs within the agreed budget. Stakeholders had earlier raised an alarm about the budget estimates but their worries went unanswered. The firm – Whiting-Turner Contracting Company – could not keep up with the rising costs that had not been factored in the initial budgetary allocation. Its bid of $200 million was unable to cater to unforeseen challenges that kept piling up. The immense duty of building the hotel was handed over to Hensel Phelps of Colorado. Also, due to loopholes in the project proposals and planning, the project was denied funding by the Maryland Department of Business and Economic Development. The financiers argued that the stated deliverables for putting up the hotel were not in any way committed to the needs of the convention center (Hopkins 2005).

Why the Project was a Failure

Against the backdrop of all the stated outcomes and the contradictions elicited, It can be said that the BHCCH has to date failed to achieve its excepted outcomes. Indeed, many other convention hotels across the US have also failed to achieve the very objectives that informed their own formation. The failure of Myrtle Beach Convention Hotel in South Carolina and the Overland Park in Kansas City serves as good examples of how publicly-funded convention hotels have failed to return profits in the US. BHCCH was mandated to bring more business to the city by increasing tourism and convention meetings. Though the hotel is a new addition to the market, bookings in all Baltimore hotels have plummeted since 2005. The hotel rooms booked in Baltimore for convention purposes dropped from 254,126 in 2005 to 72,231 in 2008, a decline of more than 70 percent (Alan 2008).

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Several critical thinking tools used in project management should have been used by the planners to arrive at a win-win situation. The planners, including the City Council and the Tourism Advisory Board, continue to draw heaps of criticisms for using some shallow techniques to base their decisions rather than utilize a wide-ranging process of thinking (Mind Tools 2009). In more than one area, the planners face accusations for basing their arguments on incorrect or unproven information to evaluate the viability of the project rather than take the initiative to rigorously and expertly use the already existing information, experience, physical observation, and rational thinking to come up with viable alternatives. For instance, they could have visited the Myrtle Beach Convention Hotel in South Carolina or the Overland Park in Kansas to gather firsthand information about why the hotels were failing to produce the desired results. This was not done.

The practice of project management demands a critical evaluation of all possible suggestions and processes before a decision is reached. But in Biltmore Hilton’s case, some valid views aired by one group were not taken into account. For instance, the public had earlier expressed concern about the hotel’s ability to manage and finance its own operations upon completion. Here, simple decision-making tools such as cause and effect diagrams should have been utilized to think through all the challenges that had been presented. Brainstorming and use of concept maps could have been used to develop concessions and solutions that would have been in the best interest of all concerned. All possible causes that contributed to the failure of publicly-funded hotels should have been critically analyzed. If need be, surveys should have been conducted to gauge the viability of such a hotel (Mind Tools 2009).

Failure in any component of project management ultimately means that the project outcomes may never be realizable. This project failed in its decision-making processes. For instance, a decision to block other private developers from participating in the project was haphazardly reached without giving concrete reasons as to why involving them would jeopardize project outcomes. A widely used critical thinking tool such as impact analysis should have been done on the decision to leave out the private developers. Such an analysis would have gone a long way to curtail the confusion and disruptions that are being experienced now (Mind Tools 2009). This brainstorming technique could have helped the planners think through the decisions they were making and the consequences they will bring. Through this technique, problems could have been spotted a long time ago and remedial measures are taken.

Conclusion

As already mentioned, the importance of project management can never be underestimated. The initial planning and decision-making phase is of particular importance since it forms the basis upon which other key constituent components of the project are achieved. Lack of proper decision-making during the initial phases can be a costly affair and a bitter pill to swallow for project shareholders as it may ultimately invalidate the process of achieving core project outcomes. Nobody and no institution, including Baltimore Hilton, would like to be caught up in such a situation. It is therefore imperative for project managers to follow correct procedures in any project management venture (Lonergan 2009).

Recommendations

Many options and alternatives existed for the project if only proper decision-making techniques had been used during the initial stages. Vivid experiences witnessed around the world points to fact that private-public partnerships are working extremely well. When a critical thinking tool such as appreciation is used, it will extract information and facts that will undoubtedly show why private developers were required to partner with the public sector (Mind Tools 2009). In this perspective, the project should open up to private individuals who might be interested in its development.

Also, a way of cutting the hotel’s operational costs has to be reached if the hotel is to achieve one of its stated objectives of recouping back the money used in construction through its own operations. The Drill Down technique or the Six Thinking Hats technique can be used to come up with areas that expose the hotel to high operational costs. For example, through breaking down the hotel’s supply chain or logistics chain into manageable components, some grey areas that bring about an increase in costs will ultimately be exposed. Managers must then come up with effective strategies to minimize waste. The management team must also take a trip to some performing convention centers such as the Houston Convention Center to get first-hand information about how they are run. This can be done using a Grid Analysis Learning Technique (Mind Tools 2009).

List of References

  1. Cannarsa, A 2008, City hope Hilton brings Convention to Baltimore.
  2. Degregoria, J 2005, “Baltimore City Council’s Convention Hotel Pushed Back,” The Baltimore Daily Record.
  3. Hopkins, J.S 2005, “Colo. Firm Replaces Whiting-Turner as Contractor for Hotel.” Daily Press.
  4. Lonergan, K 2009, Project Management, Free Management Library.
  5. Orr, A. D 2004, Advanced Project Management: A Complete Guide to the Processes, Models and Techniques, Kogan Page Publishers, ISBN: 9780749440947
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