Conference center analysis in the works
The economic potential of Vail’s proposed conference center will be analyzed by a consulting firm that has previously judged the prospects of similar facilities in resort areas.
Vail is close to signing a contract, worth up to $100,000, with a global hospitality consulting firm – HVS International – which will analyze the Lionshead conference center’s economic potential, says Vail Town Councilman Rod Slifer.
“They’re going to tell us whether or not we ought to build a conference center,” says Slifer, chairman of the nine-member town committee formed to oversee development of the facility. “We have told them we think it ought to be about this size and they, after doing a market study, will say to us we agree or it should be smaller or it shoulder be bigger.”
Town voters already have said – albeit by a narrow margin – Vail should build a conference center to attract conventions and large corporate gatherings. The theory is that those visitors would fill up Vail hotels and spend plenty of money, particularly during the summer and off-seasons.
A tax on hotel rooms was increased by a ballot measure in November and the town has been collecting money for the conference center ever since. A decision also was made to build the facility between the Lionshead parking garage and the Dobson ice arena, with Vail Resorts helping to build another level on the parking structure.
The early concept is for the size of the conference center to be between 35,000 and 40,000 square feet at a cost of approximately $40 million.
Prospects for success
HVS International’s role is to assess the conference center’s prospects for success, says Paul Sajovek, a Chicago-based senior vice president at the firm, which has offices around the world.
“It’s our job to determine what the level of potential demand is,” Sajovek says.
The analysis of Vail’s conference center, as with the other studies HVS has done, probably won’t result in a “”yes’ or “no’ answer,” Sajovek says.
“We’ll say (to the client), “We understand you’re thinking of doing this and we think you may want to down-size it or hold off, or fix a couple of other things first before thinking about building the facility,'” Sajovek says.
HVS has worked in several resorts and tourist areas, such as San Juan, Puerto Rico, where the firm studied the feasibility of a conference center, Sajovek says.
“We get hired in a lot of cities that don’t have nearly the destination appeal that Vail does. Sometimes their appetite for conference and convention facilities might exceed the demand potential, because they’re not viewed as attractive destinations,” he says. “We have a pretty good understanding of the specific demand implications involved in a resort location as opposed to more typical municipal location.”
Slifer says the committee expects the firm will do an objective analysis.
“We asked the question: Have they ever recommended not to build a facility? And they said, “Yes,'” Slifer says.
The analysis, expected to be completed by the end of the year, will be fairly detailed, even suggesting the size of the center’s main meeting room, as well as the smaller conference spaces. The size will be determined, in part, by how much demand is projected for the center, Slifer says.
“After they’ve made a determination there’s a demand, they then come up with the economics of what it would cost to operate, what it would produce in revenues and what the impacts would be,” Slifer says.
The final part of the analysis will be a business plan for the center.
“If all the (other) things make sense,” Slifer says, “then the business plan tells you how to operate it.”
Matt Zalaznick can be reached at 949-0555, ext. 606, or via e-mail at email@example.com.