Looking for Conventions, Cities Add Hotel Rooms
September 15, 2015

When Kansas City failed to make the cut for the 2016 Republican National Convention, some officials chalked it up to politics.

What wasn’t to like? Over the last 25 years, $6 billon has poured into downtown to build an entertainment district, the Kauffman Center for the Performing Arts, Sprint Arena, Bartle Hall Convention Center expansions, housing and other amenities...

With a few exceptions, public money is flowing into the convention hotels. Either local government authorities own the properties, for example, or private developers are tapping citywide occupancy or tourism-related tax revenue, future property and sales taxes generated by the hotels’ operations, and other sources.

Such subsidies typically set off debate over whether public financing of hotels is a good policy. But cities that have invested heavily in convention centers and supporting amenities — often to foster urban renewal — have few alternatives if they want to stay on the radar of a group that selects its locations years in advance, says Tom Baker, corporate managing director for the hospitality group at Savills Studley, a real estate services firm in McLean, Va.

“It becomes almost a dog chasing his tail: How do you keep up with the demands of the clients to ensure your spot in the rotation?” he said. “There need to be incentives that goose the returns for these projects, or they won’t pencil out financially...”

Looking for Conventions, Cities Add Hotel Rooms

Related Stories

EB-5 Investment and the Impact on Commercial Real Estate
National Office Sector Report (Q2 2015)