by Cheryl-Anne Sturken | July 01, 2007

Bill Hanbury is patient. He has been waiting six long years for a headquarters hotel to support the new Washington (D.C.) Convention Center. Now, it looks like he will have to wait at least another year, while the final excruciating details of a $550 million project are hammered out. “We’ve lost business and opportunities because this hotel has not been built,” says Hanbury, president and CEO of the Washington, D.C., Convention & Tourism Corp. “Many groups have decided to take us off their radar until they see a shovel in the ground. I estimate $200 million worth of convention business has taken a pass on us over the years.”

Still, Hanbury remains an optimist. Washington, D.C., he says, can stand with any of the country’s top-tier convention destinations -- Las Vegas, Orlando, Chicago -- despite its lack of a headquarters hotel. He rattles off new hotel development projects, museum openings and various attractions. He points to the city’s 80 percent-range hotel occupancy average, its healthy convention business and the $5 billion in visitor spending it pulled in for 2005 (the latest year tracked). And yet...

It’s the emerging players waiting in the wings -- cities like Philadelphia and Indianapolis that have green-lighted impressive convention center square-footage expansions and equally hefty new hotel-room product -- that keep him up at night, Hanbury admits. “This is an incredibly competitive marketplace,” he notes. “It’s economic cannibalism out there.”

Hurry up and wait

Washington, D.C.’s experience is hardly an anomaly. The convention center industry is fraught with cities wrangling and waiting for headquarters hotels, even as they celebrate the opening of multimillion-dollar convention facilities and expansions. Portland, which enlarged the Oregon Convention Center in 2003, is still waiting. So is Palm Beach, Fla., whose $84 million facility opened in 2004. And in Virginia Beach, where the $207 million Virginia Beach Convention Center finally opened in May, the negotiations for a companion property continue.

The reality is that a convention center, no matter where or how state-of-the-art, is at an immediate disadvantage if it does not have a supporting headquarters hotel. It’s a fact recited over and over by industry insiders. Yet, centers are continuing to be built without them.