The economy of conferences
VAIL ” Supporters of the Vail conference center say it will infuse money in the town’s stores, restaurants and hotels, while opponents say the venture is a risk and the town shouldn’t be in the conference center business.
“It comes down to whether we talk pro-business or act pro-business,” council member Greg Moffet, a supporter of the project, said at Tuesday’s council meeting.
Proponents of the center say it will generate $34.1 million directly and indirectly for Vail’s economy each year. In addition, the center will add $1.4 million in tax revenue for the town of Vail, says a study by consultant HVS International.
The center would attract corporate groups, associations and meetings with an average 300 people, the report says. Vail Community Development Director Russ Forrest said the proposed building could handle conferences of up to 1,500 people and lecture-style events holding up to 3,000 people.
Former mayor Rob Ford, who opposes the center, said the conference center business is very competitive and projections that predict success may be wrong.
“This is such a huge departure from what the government has been doing for 40 years,” Ford said.
Residents will go to the polls Tuesday to vote on an increase of up to 1.5 percent in Vail’s lodging tax to help build the conference center. If voters don’t approve the tax, the project will be killed.
Galatyn Lodge General Manager Carol Alleman said it’s unfair to increase taxes for the lodging community when other parts of the business community also will benefit from the conference center.
“It’s unequitable,” she said. “It’s unfair. It’s taking advantage of our guests in an unfair way.”
Guests won’t be happy about that extra tax on their bills, she said. The funds should be coming from a sales tax, she said.
Proponents say the center will bring visitors to Vail during the off-season, thus flattening to some degree the ebb and flow of the seasonal nature of Vail’s economy.
Most of the demand for the conference center will be in the summer and in the shoulder season, the HVS report says. Hotel rates in the winter will be too high to attract large groups of people, the report says.
Occupancy of hotels dips to as low as 17 percent in Vail during the late spring and fall, the report says.
The report says the conference center will generate more than 13,000 “room nights” every year in the off-season by 2012. Out-of-state visitors will spend $183.73 a day for every night they stay in Vail during those seasons, the report says.
But Ford said he isn’t so sure the center will help in the off-season. “If it worked the way they said it would, it would be terrific,” he said.
“The data does not say that.”
Ford said getting to Vail in the off-seasons, with fewer planes landing at the Eagle County Regional Airport, is difficult. People also don’t want to come to Vail during the seasons when the weather isn’t
good, Ford said.
“You want to go somewhere nice and sunny and experience something different than you have at home,” he said.
Rob LeVine, general manager of the Antlers hotel and condos in Lionshead, said people will want to come to Vail even if it’s the shoulder season. Golf, biking, hiking, rafting and fishing are all still going on in the off-season, he said. And the more people who come, the more things there will be to do, he said.
“If people are here, those business, shops and activities will stay open,” he said.
Hotels with meeting space are significantly busier in the off-season than hotels that don’t have meeting space, LeVine said.
Opponents of the center have cited a Brookings Institution report written by Heywood Sanders, a professor at the University of Texas at San Antonio, that says convention business has declined across the country while more convention space has been built.
“The new private investment and development that these centers were supposed to spur ” and the associated thousands of new visitors ” has simply not occurred,” Sanders wrote in the article.
Sanders studied large convention centers in mostly large cities. As for cities like Vail that have major tourist attractions, he analyzes Boston and San Francisco, which have much larger facilities than what’s proposed for Vail.
But a report published by the International Association of Conference Centers says the health of the conference center industry is improving. Conference centers ” as opposed to convention centers ” are defined as specialized lodging facilities that thrive on small- to mid-sized business conferences. PFK Consulting said the industry saw a 7.5 increase in revenues last year after three years of declining revenue, and 2005 is expected to another strong year.
Jim Steinbach, vice president for sales of the Vail Valley Chamber and Tourism Bureau, said Sanders’ study addresses convention centers in places like Las Vegas and Chicago that can host mega-conferences. The Vail conference center would host events with a maximum of 3,000 people, and could hold conferences of up to about 1,500 people.
“It’s total apples and oranges,” Steinbach said.
Ford said the data on convention centers does apply to Vail. Larger convention centers are often divided up to accommodate smaller “conference” groups, he said.
Also, when you start considering conferences that host more than 1,000 people, which Vail would be able to host with the center, that enters the realm of “conventions,” so Sanders’ finding are relevant, Ford said.
Staff Writer Edward Stoner can be reached at 949-0555, ext. 14623, or firstname.lastname@example.org.