September 1, 2012

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An examination of four divisive issues. WHICH SIDE ARE YOU ON?

Di Lewis, Heather Stewart, Sarah Ryther Francom

September 1, 2012

“Particularly in Utah, where we have the youngest population per capita in the nation, our greatest resource is this young population to maintain and run the economy,” he says.

In the end, not only is it Utah’s right to control its own lands, Ivory says, but the state would do a better job taking care of the lands and would effectively use the money gained from them.

By Sarah Ryther Francom

“It is very clear that a convention center hotel is needed in Salt Lake,” says Scott Beck, CEO of Visit Salt Lake, the city’s convention and visitors bureau. Beck believes the development of a 1,000-room convention hotel would help draw additional conventions to downtown Salt Lake. And more conventions would lead to more out-of-state attendees and their dollars coming into the state, resulting in a major economic impact.

The proposed convention hotel would serve as the primary accommodation space for the Salt Palace Convention Center, which is currently operating at 43 percent occupancy—a rate that Beck believes is sure to increase if a mega-hotel is developed. 

“If you look at the convention business we’re losing, the number one issue is hotel inventory. We are doing conventions of 2,000 to 4,000 people in a building that is built for 8,000 people. It is clear that we need to double the size of most of our conventions, but you can’t do that without appropriate hotel inventory,” Beck says. “So far this year, we’ve lost right around 85 conventions to other cities. We lost 34 of those because we didn’t have a convention hotel.”

While some argue that building a convention hotel doesn’t automatically equal more convention business, Beck points to comparable markets like Nashville, Indianapolis and Denver, which have seen dramatic upticks in their convention business upon building convention hotels.

“Numerous studies and market analyses have been done to determine what a hotel like this would do to Salt Lake,” Beck says. “There’s very little argument that there’s a need and there’s very little argument that it’s not going to affect Salt Lake in a positive way.”

Beck also believes that while the mega-hotel might initially lure business away from other hotels, the development would eventually boost the entire industry. “All ships would rise with a high tide,” he says.

Beyond bolstering the state’s convention industry, the economic benefits would eventually trickle down to all Utahns, Beck says. “Convention [attendees] bring an average of $923 to Salt Lake and then they go home—we don’t educate them, they don’t drive on our roads, they don’t use our public services,” he says. “Money spent by tourism, conventions and meeting attendees in Utah decreased the average household tax burden by $1,012 last year because visitors came here, they spent money, paid sales tax and then went home. Those visitors inject money in our economy—and it’s the best money out there because it costs us nothing.”        

At this point, Salt Lake City and Salt Lake County are sponsoring a financial feasibility study to determine how the massive project could potentially be funded, including the use of tax dollars for portions of the hotel. Beck says regardless of whether public monies are used, it’s only a matter of time before the mega-hotel becomes a downtown fixture.

“A convention hotel would not help Salt Lake,” says Rich Rosa, vice president of operations at Utah Hospitality, a private hotel development organization.

Rosa believes that Salt Lake does not need a convention hotel—at least not right now. With the downtown Salt Lake hotel market running 64.8 percent occupancy from May 2011 to May 2012, Rosa argues that it is evident that Salt Lake has plenty of hotel inventory to accommodate convention and meeting attendees. 

Though Rosa agrees that Salt Lake has likely lost some conventions due to the lack of hotel inventory, he argues that the number of conventions the city could potentially attract with a mega-hotel is not substantial enough to justify the convention hotel’s development.

“According to data received in 2007, 107 of the state’s convention bids were rejected. To break this down further, 23 of these bids were rejected due to lack of a convention hotel. Say we had the hotel, and we were up against all those cities that also have a hotel—we’re not going to get 100 percent of the conventions. I doubt that we would get 50 percent. We’re going to get maybe 20 to 30 percent, which is about six to eight more conventions a year. Is that a large enough impact to make it work?” Rosa asks.

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