Convention Center Hotels: If They Build It, Will You Come?
Cities looking to expand their convention presence are finding that the missing link to more event business is the number of available hotel rooms. That's led some cities to build hotels using public funds—a strategy that's proved controversial with taxpayer-advocacy groups.
As it turns out, the one thing Kansas City, Missouri, was missing in its effort to boost its convention business was a bunch of hotel rooms.
The city recently lost a bid to host the 2016 Republican National Convention, and the National FFA Organization—once known as Future Farmers of America—gave up on the city years ago.
But a funny thing happened on the way to convention irrelevance: The city approved public funds to build a $308 million convention center hotel, expected to be ready by 2020. Already, the city has been seeing some big returns from that decision: This month, three associations announced that they would bring their conferences to Kansas City. Also coming to KC will be the tradeshow operator Quilts, Inc.
Great start, but the BBQ capital’s breakthrough moment might have come with the decision by Shriners International to bring its annual convention—which draws 20,000 people—to the city. That event will help drive $18 million into the city’s economy. The fraternal organization specifically cited the new high-rise hotel as a key selling point.
“We are delighted to hold our 146th Imperial Session for Shriners International in Kansas City in 2020,” the organization’s Jeff Sowder said at a press conference last week. “We chose Kansas City because it is centrally located, so it will be easy for everyone to get to. Kansas City has all the facilities we need and a first-class convention center.”
Missouri’s largest city is far from the only municipality that’s investing in hotels as a way to win new event business. From Austin, Texas, to Washington, DC, cities are expanding their hospitality offerings, according to The New York Times.
“Meeting planners are under pressure to get high attendance, so they want to make sure that attendees will be accommodated in big, new, nice hotels,” Lauro Ferroni, head of hospitality services for the real estate services firm JLL, told the Times. “Luckily, we’re in a growth cycle.”
Not everyone’s convinced that public funding for hotel development is the way to go, however. In Kansas City, for example, the political action group Citizens for Responsible Government wants to put the issue on the ballot.
“The voters need to understand the whole story,” the group’s founder, Dan Coffee, told Flatland KC. “Why are voters being asked to fund over 50 percent of the project? Who are these investors? If it is such a good deal, why aren’t investors from all over the country lining up to get a part of the action? Why are there no bids going out on the project?”
Legal issues could keep the hotel plan off the ballot, because such measures can’t overturn signed contracts. For now, the city’s hotel project is moving forward.
“It’s full steam ahead to get finished up on the design work and get this under construction,” hotel attorney Mike Burke told the Kansas City Star.
An artist's rendering of the new high-rise Hyatt hotel to be built in Kansas City in the coming years. (Handout photo)