Much of Utah’s economic success can be attributed to the many ambiti...Read More
Big Shoes to Fill
Utah's Top 100 Private Companies
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Examining the Agreement
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Salt Lake Area
“I’m quite apprehensive about how this is going to work. To me right now, it’s very fuzzy. We hope they put wording in there, and we hope that it’s explained to us.”
Rosa drafted a letter to the Salt Lake County mayor and council, strongly objecting to the construction of a hotel that he believes will hurt smaller hotels by starting a price war. He’s concerned that when conventions are not in town, the larger hotel will eat up rooms that would usually go to smaller properties. And overflow rooms that are used to fill up outlying hotels in areas like West Valley City will dry up in order to keep the convention hotel viable.
He says at the end of February 2014, the occupancy rate for downtown hotels hovered just below 66 percent, with an average daily price of $103 per night.
“The existing hotels will not sit idly by waiting for the convention hotel to fill before the existing hotels get their piece of the convention pie,” Rosa’s letter states. “In part, they will seek to get their piece of the pie with incentives and lower prices. Lower prices to the consumer are good for the consumer, but they do absolutely nothing to advance the financial viability of the convention hotel. The overall effect of this will create lower than average market occupancy and lower than average daily rates for hotels.”
Rosa also brings up concerns about liquor laws, and wonders if the new hotel will get its liquor license streamlined through the system.
Upping the Ante
According to Scott Beck, president and CEO of Visit Salt Lake, 52 events were held in Salt Lake City in 2013. City-wide conventions, utilizing more than three hotels, accounted for 32 of those events, while convention center-specific affairs, such as Comic Con or the Governor’s Gala, made up the remaining 20 events.
Denver is Salt Lake’s biggest competitor in the region, boasting 13 large hotels, compared to Salt Lake’s 28 smaller properties. When associations bring in 8,000 people to a convention, it’s hard to manage a variety of hotel venues with people spread out across the valley.
“Usually one hotel gets selected as a headquarters hotel where board meetings and other official meetings are held during the convention,” Beck says. “People want to meet people. When they’re spread out over several hotels, they don’t get the density or concentration desired, and that’s a very important element.”
Many groups are bidding out their trade shows and conventions for the next decade, and Beck worries that the lack of a convention hotel in the city will mean more associations traveling to other cities for events. And fewer conventions means a steep economic loss as the city loses revenue on a large influx of tourist dollars.
He also says negative stereotypes about Utah continue to plague convention planners. For decades, the city sold its image of accessibility, value and friendliness, but now people want entertainment, nightlife and the guarantee there’ll be something to do once their meetings are over for the day. It’s estimated each attendee at a three-day event drops nearly $1,000 for a hotel room, food and entertainment.
“They visit, shop, eat and leave behind money. We don’t have to educate these people, don’t have to incarcerate them, usually, and this sales tax decreases the locals’ tax burden,” Beck says. “An association generates 70 – 80 percent of its annual revenue for its operating budget through registration fees and other convention expenses. If they see numbers drop because the convention is booked in a place with no alcohol and no diversity, they’ll stop coming here.”
He hopes that a rebranding campaign, along with the $335 million convention hotel, will convince out-of-state planners to give Salt Lake a shot. By promoting the city as “urban” with a world-class ballet, opera and symphony, plus professional sports teams, brew pubs, museums and quality entertainment, Utah’s image can get a much-needed face lift.
The Biggest Customer
Since 1996, when Outdoor Retailer moved its Summer and Winter Markets to Salt Lake from Reno, Nev., attendees have contributed nearly $470 million to the state’s economy. Produced by Emerald Expositions, Outdoor Retailer brings thousands of merchants, consumers and manufacturers together through demo events, tradeshows and platforms within the outdoor recreation industry.
The two shows attract a combined 50,000 attendees and are the crown jewel of the Salt Lake convention business. Outdoor Retailer elected to remain in Utah through 2016, but state leaders say adding a convention hotel is the only way the city can stay viable with the organization in the future.