Are new convention centers worth the cost?

A proposed downtown event center in Albuquerque and 550-room headquarters hotel project has ignited a long-standing debate: if you build, will they come?
 

The Albuquerque Convention & Visitors Bureau claims to have lost about US$218million in direct spending from meetings that went elsewhere because of a lack of hotel rooms near the existing center, reported the New Mexico Business Weekly.
 

Dale Lockett, president and CEO of the Albuquerque Convention & Visitors Bureau, said a petition circulating around the business community has garnered more than 200 supporters.
 

Some vocal opponents have emerged as well, citing what they say is downtown’s waning vitality. Lockett counters that a new event center would lure locals downtown again, along with bringing in meetings and leisure travelers.
 

“If a city is not willing to reinvest in itself and take the lead, why would the private sector want to risk its own capital?” he said.
 

The newspaper points out that most convention centers operate at a loss, and Albuquerque’s is no different.
 

“The argument for building them is that the investment brings in far more revenue — through visitors staying in hotels, eating in restaurants and spending money in other venues — than cities expend in supporting them. They also encourage more private investment, supporters say,” according to the newspaper.
 

The article quotes Heywood Sanders, a professor who is perhaps the country’s best-known critic of publicly funded centers.
 

“The problem is, literally every city says ‘If we expand and if we build a hotel, we’ll succeed. We’ll get this big influx of visitors and big economic impact,’” he said. “Are all these cities succeeding? Are they all seeing more business, and will all of them see increased convention business?”
 

The article cites both successes and failures.
 

Jim Wood, president and CEO of the Greater Louisville Convention & Visitors Bureau, said his city’s downtown has been transformed since the $72 million expansion of the Kentucky International Convention Center in 2002. A new arena is under construction, and an ailing pedestrian mall has been transformed into a major entertainment district with an $80 million complex called Fourth Street Live. The number of conventions at the center rose from 15 in 1998 with 41,300 room nights to 51 in 2009 with 172,991 room nights.
 

Wood added, however, that the city has seen a decrease in the number of attendees at conventions.
 

“Such concerns have not stopped cities from rushing to join the race, although some projects have been stalled by the recession,” the newspaper said.
 

By David Wilkening