January 19, 2005

The Brookings Institution, a prominent think tank, has issued a report critical of the ongoing "arms race" between competing cities to build convention infrastructure at a time when convention business is actually shrinking. The study, "Space Available: The Realities of Convention Centers as Economic Development Strategy," says its conclusions "should give local leaders pause as they consider calls for ever more public investment into the convention business." Among the report's findings: Attendance at the top 200 trade shows has sunk to 1993 levels. Despite the decline, localities are investing massive resources in facilities intended to lure such events. Over the last decade, public capital spending on convention centers has doubled to $2.4 billion annually, with a 50 percent increase in exhibition space, the report finds. Furthermore, 44 new convention centers are now being planned or are under construction. "The overall convention marketplace is declining in a manner that suggests that a recovery or turnaround is unlikely to yield much increased business for any given community, contrary to repeated industry projections," the report states.


In San Jose, Calif., convention center-area hotels are considering forming a district of their own, hoping to impose a tax hike on their own rooms to fund expansions of the San Jose McEnery Convention Center. Although a ballot measure for higher room taxes failed to pass when it was proposed three years ago, the new plan might saddle convention center hotel guests with the same increase (4 percent) that was denied initially. "We got 65.3 percent of the voters on our side last time we rallied for a tax increase," just shy of the two-thirds majority needed, said Dan Fenton, president and CEO of the San Jose Convention & Visitors Bureau. "We're not concerned with going against the political will of the people. This is a popular item."


Meeting Professionals International's annual survey compiled with American Express, titled FutureWatch 2005, predicts planners will see an average budget increase of 5 percent this year, following a 3 percent rise in 2004. Suppliers are expected to increase revenues by 13 percent in 2005; their revenues rose by an average of 10 percent last year. Looking at planners' sourcing practices, 57 percent of the respondents said they have in place or are planning to implement purchasing policies; 50 percent already have or are creating preferred-supplier programs; and 48 percent recently have installed or are installing new technology solutions for meeting planning. For the full report, visit www.mpiweb.org.


Rental-car company Hertz has announced a new meetings program. The features include site-inspection discounts; a meeting services coordinator to take care of attendees' rental needs; a reward program for meeting planners; and free customized flyers to send to attendees. Guaranteed event rates can apply for a week before through one week after a meeting.


In New York City, a long-term lease has been signed for a cruise terminal on the Brooklyn waterfront. The Port Authority of New York and New Jersey will construct a $30 million terminal, to open at the end of this year. According to the New York City mayor's office, Norwegian and Carnival cruise lines have committed to use New York City cruise ports exclusively as their northeastern U.S. port of call until 2017.


The 2,000-room Orlando World Center Marriott Resort & Convention Center Marriott's largest property has begun a major expansion of its function space. The 214,000 square feet of space will be doubled to more than 400,000 square feet, including the new, pillarless 105,000-square-foot Cypress Ballroom. When work is finished (no date has been announced), the hotel will have 73 meeting rooms.


Last week, Southwest Airlines and bankrupt ATA Airlines announced a code-sharing agreement on routes connecting through Chicago's Midway Airport. Under the plan, the first code-share deal between two low-cost carriers, the airlines will sell seats on each other's flights and split the proceeds; passengers will be able to connect between ATA and Southwest flights in Chicago with one ticket and seamless baggage handling. "Our new code-share partnership allows us to offer our reputation for friendly customer service and the kind of everyday low fares both companies are known for to many more markets across the country," said J. George Mikelsons, ATA's chairman, president and CEO.


The 196-room Kapalua Bay Hotel in Maui, Hawaii, will be demolished and replaced by a new, larger resort, according to parent company Kapalua Bay LLC, a partnership between the Maui Land & Pineapple Company, Marriott International and Exclusive Resorts. The $300 million project, to open in spring 2008, will include condominiums, approximately 150 hotel rooms, a spa and a beach club.


The Ritz-Carlton Hotel Co. plans to open a 300-room hotel in Hong Kong. The property, to open in 2009, claims it will be the highest hotel in the world, occupying the top 13 floors of a 100-story tower in the city's Kowloon Station redevelopment. Plans call for 300 guest rooms, approximately 12,000 square feet of function space including a 6,400-square-foot ballroom, an indoor pool and a spa.