« While We Dither, They Build | Main | Pittsburgh Redevelopment in the New York Times: I Wonder... »



I posted elsewhere (can't recall if your blog or one you cited) on the Baltimore situation. I wasn't familiar with that argument, but seems to me that is different. There are 3218 sleeping rooms within three blocks of their convention center. I'm not sure why they think another hotel is necessary because it doesn't make sense on the surface.

Pittsburgh only has the Westin and Courtyard within what is typically defined as "walking distance" in the convention business. About 900 rooms. So it's not an apples to apples comparison.

In a post last year on my own blog I questioned the wisdom of Indianapolis on thinking about their convention center needs. Their model doesn't make sense to me. I bring that up so that you'll recognize I am not "pro-convention-center" in all situations.

I'd be interested to know why the hotels that have been approached don't want to commit to building in Pittsburgh. There could be any number of reasons, including my statement that the current mix of events that uses Lawrence are not appealing to potential developers.

There are other moving parts I haven't mentioned. The USAirways debacle certainly scared a lot of potential business away. Event organizers need to know that they can get their attendees to the conference. Union labor costs are an issue - Philadelphia's convention business almost imploded last year because of local labor laws. Chicago unions have recently had to cave on many issues because huge shows were pulling out and going to Orlando and Vegas, both big venues with lower costs. We're not bad in comparison with those two cities, but there's room to be much better.

Marketing to attract conventions is a highly competitive business. But for the most part we're not competing against Chicago and Philly and Vegas and Orlando, except perhaps for medical and professional conferences that can fit in Lawrence. For other events we're competing against second and third-tier cities like Indy, Cleveland, Columbus, Cincy and even Baltimore and Detroit.

Our convention center has drawn many good reviews, but also some bad ones. Being "Green" is a selling point, but not as important as the CVB would like. The loading docks weren't well thought out. Nor were the layouts of the big exhibit halls. Seems the designers either didn't listen to the planners or chose to ignore their input when building the place. But it's here and it is better than what a lot of other cities have. We have to figure out how to maximize revenues from it.

Ours is, admittedly a strange business. Cities often run their centers at a loss - and design that loss into their budgets. The upside is almost always the amount of spending that attendees do when visiting. By design you're giving away something to attract something that makes it all worthwhile.

As a marketer, it seems obvious to me that we shouldn't have expected attendees at the Senior Olympics nor the Bassmaster event to drive large revenues for local business. Unsurprisingly, it seems they didn't. I do expect the All-Star Game to have a positive economic impact (as an aside I'll add that I believe if we could lobby to get the Pirates back in the NL East, PNC Park would do better - a mere dozen additional dates vs. Phils and Mets would probably equal 60,000-80,000 more out of towners annually, each going to one or two games per series. Doesn't sound like much but it's pretty significant).

I would also expect medical, scientific, business (especially technology) and industrial conferences and trade shows to fill hotels and better restaurants. But we don't seem to be drawing a lot of those. We're getting events with audiences who happily stay in Cranberry and eat at strip mall TGIFridays.

So perhaps the question we should be asking is why aren't we drawing better quality events. If we did that, demand would likely take care of itself.

All Joe McGrath is stating is the reality in our business. An unconnected hotel on 11th in the Strip would be good, but not as good as a connected one. But even getting a connected hotel is not a panacea and will not solve problems if all other moving parts are left as is.

My main argument to your original post stands. The idea of a convention center hotel is not a bad idea. It's actually a good one that should not be dismissed out of hand. Public funding for same is another issue altogether. And without some changes in how the CVB and convention center handle their own sales and marketing (and manage labor costs) the answer is it shouldn't be publicly financed as we'll have more of the same. But hotel development as part of a major overhaul in the types of events we try to attract could be a win-win even with public financing.

Sam MacDonald

First, thanks to Rich for reposting his thoughtful tresponse. A technical glitch had tossed it onto the ether, so I appreciate his patience.

Second, I think there is a lot of important stuff here. For instance, you say, "Cities often run their centers at a loss - and design that loss into their budgets."

Maybe so, but how many of them sell them to voters that way? As a loss leader for the benefit of surrounding restaurants? Not many, I would guess. If that's the case, let the restaurants pay for the convention center.

Worse, which restaurants benefit? It seems that the mom-and-pops lose their businesses to eminent domain, only to be replaced by people who have the political pull to score the preferred locations: the developers. When was the last time you heard a pitch for a convention center that went like this: "Taxpayers, we need your support so we can knock down some houses, build some new chain restaurants and build a convention center that will draw people to those new restaurants"? No. The pitch is, "This convention center will be a seed for a an enormous amount of private investment, which will provide an enormous amount of jobs and revitalization all across the region."

This is not asking a rhetorical question: Is there an example of a convention center that has gone in and spurred substantial, privately-funded redevelopment on the fringes, as promised? And have those immediate fringes spurred more substantial privately-funded development further out? Development that has benefited existing homeowners and businesses rather than builders and developers? I am serious: What city is considered the model of success? Last, do most convention centers approach this kind of success, or is it a one-in-ten shot? One-in-three? Even odds? Better?

You also write: "So perhaps the question we should be asking is why aren't we drawing better quality events. If we did that, demand would likely take care of itself."

This is what so often turns into what I called, perhaps uncharitably, a shell game. We build these enormously expensive facilities in hopes of saving cities. Then the developers ask for a hotel to save the convention center. In this case we say, we built the center to draw quality events. But it is not doing that. So it's failure? "No," so the answer goes, "we just need a hotel. Just build a hotel and the convention center will be viable, which will make downtown vibrant again."

But the convention center was supposed to be viable already. So viable, in fact, that it would draw substantial private interest in funding a hotel. It didn't. It simply did not do that.

If a hotel was needed to make it viable in the first place, the planners should have been sold it as such and included it in the price of the convention center. That would have been a harder sell.

So why isn't the thing drawing quality events? I don't know. I do not design and build convention centers. The people who designed and built this one claimed to know something about it, though. They said that the design, as finalized, would draw quality events, which would in turn draw interest in a hotel. They were wrong.

Last, you wrote: "My main argument to your original post stands. The idea of a convention center hotel is not a bad idea. It's actually a good one that should not be dismissed out of hand."

I am not dismissing it out of hand. People who study where to build hotels have looked at the city and have expressed interest elsewhere. They are the ones who are dismissing it. And not out of hand. They are doing so after a careful market assessment. I don't see any reason to think they are wrong.

The comments to this entry are closed.