A reader named RichW has taken me to task for criticizing the convention center. This is my attempt at a point-by-point response to the first of his complaints.
RichW’s email address indicates that he is from The Westerfield Group and affiliated with the “Trade Show Marketing Institute.” The two organizations share the same Pittsburgh Address, and I can only assume the the RichW in question in TSMI president Rich Westerfield. A bit of research shows that Mr. Westerfield is engaged in marketing and promoting trade shows at places like the convention center. Go to the links for a more detailed description of his business.
At any rate, RichW is taken aback by my criticism of Mayor Murphy’s spokesman, who said that “we are told” the city’s convention center needs a new hotel nearby. As RichW helpfully points out, I wrote:
"I also like his use of 'We are told...' By whom? I bet it's the people who design and build convention center hotels. Hint to the Mayor's office: Get a second opinion. And while you're at it, get a second opinion about the convention center."
RichW responds:
Seems you are the prototypical voice of Pittsburgh, railing against whatever, with no sense of facts nor inclination for progress.
So the prototypical Pittsburgher rails against "whatever," with no sense of facts? Geez. That’s the prototype? I am surprised that you even bother to market a city of such misinformed naysayers.
At any rate, I disagree. I think people in the city, as prototypically factless as they allegedly are, have grasped a lot of things. One of them is that after 50 years of immensely expensive, centrally planned urban redevelopment and revitalization, the city’s core is neither developed nor vital. As for progress, perhaps you are talking about the Hill District and East Liberty. Skybus? Half the population is gone, looking for work elsewhere. Planners keep promising that Gateway Center/Point State Park/convention center/you-name-it is going to save the day. The day has not been saved. That’s a fact.
To be fair, none of my plans have revitalized the city, either. Then again, they have not cost hundreds of millions of taxpayer dollars.
I'm in the convention business, although in no way affiliated with the Lawrence CC or any local political apparatus. As part of my job, I'm often asked to recommend cities to clients who are looking for the right "fit" for their events.
So it's with that experience that I can tell you the "whom" of which Cox speaks are meeting planners, operations managers and CXOs at companies that might bring their events here.
So I guess I was wrong. The mayor is getting advice from people other than those who design and build convention centers. Namely, from people like Mr. Westerfield, who promote and market them. This is not to impugn Mr. Westerfields character. The fact that he works in the industry does not make his views invalid. I will assume that he does not support convention centers because he is in that line of work, but rather that he is in that line of work because he believes convention centers to be valuable institutions. I have similar concerns regarding Mr. Westerfield's suggestion that the mayor is getting opinions from "operations managers and CXOs at companies that might bring their events here." Seems to me that this class of people would have a vested interest in securing subsidies for a convention center, in that said subsidies would filter down to lower rates, grander designs, etc. I am sure that loyal Chrysler fans lauded the government bailout when that company went bust. Great. But maybe they would not have been the best people for the feds to consult when making that decision. Still, does anyone expect such people to counsel against plans that promote conventions centers as a critical part of urban planning? Mr.Westerfield is "in no way affiliated with the Lawrence CC," but he clearly has an interest in promoting and marketing it. And he thinks a hotel would make that easier. Well, maybe I think that the city should subsidize blogging to make that easier. I eagerly await a call from the mayor's office.
You can have a legitimate arguement about whether the hotel should be publicly funded, but not the concept of having one next to the convention center. That argument has no basis.
The reasons for a connected hotel are many: exhibitors demand convenient hospitality suites and walkable offsite meeting rooms. They also prefer the ability to get back and forth to their rooms quickly. And they don't want to have to walk through a casino every single time they come or go.
Well, forgive my impertinence, but I do, in fact, have an argument that goes beyond public funding. And I am not the only one. See all those hotel companies out there? The ones that are not building a hotel next to the convention center? They seem to have doubts about the viability of a hotel there, too. Sure, I can see the reasons for it. People don't like to walk all that way. And they want to get back to their rooms quickly. But do they want those things bad enough that they will spend sufficient marginal cash to justify the $105 million it would take to build it--and provide investors, public or private, with a reasonable return? Marriott doesn't seem to think so. Neither does Holiday Inn. Nor The Four Seasons. Seems I am not alone in my assessment. Strange that is "has no basis."
Any city can tell you that. Well, except Cleveland. The downtown Cleveland convention center is an industry joke at this point because of its run-down condition, which is where our old convention center was headed. I have told clients to consider downtown Detroit over downtown Cleveland, which should give you an indication how bad it is. And Cleveland's I-X Center by Hopkins is often not under consideration because there is no attached hotel. Major exhibiting companies don't want to do business there. And attendees simply don't want to get on shuttle buses at the end of a long day if they can avoid it.
Again, I only care if they want these things so badly that they are willing to spend enough money to make a convention center hotel viable. Doesn't the lack of private funding suggest otherwise? I mean, it's not as if private hoteliers have abandoned the city altogether. They are talking about funding other projects.
As to the hotel occupancy rates - for that I blame the CVB for booking too many SMERF (Social, Military, Educational, Religious, Fraternal) meetings at Lawrence. Yes, you need to keep the center full, but many of these SMERF groups won't pay more than $49 per night, and they'll happily stay in Cranberry at the Super8. Seems to me that rather than spend more time selling to the best mix of events, our CVB has simply taken whatever events were interested in coming here. Pittsburgh insecurity again?
This is where things start getting strange. Look, in cities across America, people pitch these convention centers as powerful economic development tools. Build one, they say, and it will draw substantial investment downtown. The simple equation is:
public expenditure on convention center = revitalization through private investment
But that's not what people are discussing after years of failure. The argument morphed from, "build a convention center to save the city," into "build a hotel to save the convention center."
Sure, we can discuss why the center isn't drawing high-dollar conventions. Mr. Westerfield has his opinion. He knows a lot about such things, so I am assuming it has a lot of validity. But maybe it's just that there are too many of these things. That the market is glutted. Washington, DC, just abandoned their old one in favor of an embarrassingly expensive new one. And they are having a problem doing what? Securing a hotel.
I think it is hard to dispute that across the country, these facilities have failed to live up to their promise of redevelopment. In fact, rather than adding to city coffers, the people who run them continue seeking even more public funds. Mr. Westerfield doesn't like the Baltimore example, but there it is. That particular area has amenities that urban planners across the country would kill to have. And still, no one will build a hotel. Is it because there are already too many hotels in the area? Then why do the people running the facility say they need more rooms to make the center viable? Seems that no matter what the case may be, Baltimore or Washington, etc, that the answer is always the same. "We just need a little more investment and this will really take off." How long until we call them on it?
As a side note, if Oronato is seriously considering the idea that a casino hotel will help the convention center, then he must be considering only the Mellon Arena site, because no other site would have any impact whatsoever to meeting planners who do the shopping for venues. At least the Mellon site is a walkable distance, albeit not a particularly pleasant one at the moment.
I have no idea what Onorato's plans include. Nor do I know if convention-goers will stay at the Mellon site. Either way it's worth asking:
Can Pittsburgh compete in the high-dollar convention market? With New York and Chicago and LA and New Orleans and Columbus and Cleveland and Detroit and Miami and Houston and San Francisco and Baltimore and Washington and Toronto and Philadelphia and San Diego... well, you get the point. Maybe a new hotel would make the difference. Obviously, the people who build hotels don't think so.
I am sorry if Mr Westerfield thinks that no reasonable person can make that argument. I think a reasonable person can. And I think a reasonable person can disagree. What I think is unreasonable is even the notion of public funding for such a thing. We spent millions to build a convention center to revitalize downtown. Didn't work. It's throwing good money after bad to use millions more revitalize the convention center by building a hotel.
UPDATE: That was a long post and I wanted to get it up. I have some font issues I need to deal with. But also, I wanted to thank RichW for the comments. I think this exchange, which is far too long for an op-ed page or elsewhere, helps show the value of this format.
Sam,
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.
Posted by: RichW | July 21, 2005 at 04:58 PM
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.
Posted by: Sam MacDonald | July 22, 2005 at 04:02 AM