OFFICIAL - Loews Convention Hotel (formerly Hyatt)

[aknowledgeableperson]

The Marriott may have three different properties in a city with all three having different owners and managers. All three may share a booking system but a convention works with the managers of the hotel not the booking system.

[earthling]

You already said that but that doesn't mean it can't be done. We're talking in circles.

Why did Crown Center say that Sheraton and Westin have the advantage of the same parent to book conventions more easily. Booking through the parent company is apparently the key reason Hyatt converted to Sheraton. Sounds to me like it can be done with effective BPM. Maybe Marriott isn't that effective with BPM across units and their indie operators, but they should be if not. Apparently Starwood can.

[aknowledgeableperson]

Those two hotels have the same management company - Starwood. Before the two hotels had different managers therefore there was some difficulty coordinating since the two managers might have different goals and objectives. Before the two hotels acted like competitors instead of partners.

It isn't the booking system that makes it easy. It is common management that gets things done. The booking system is how the hotels keep track of their inventory.

To give an example. Say there are two Marriott properties downtown under different ownership and management. They may share the same booking system but one just cannot reserve a block of 300 rooms in the other just because the first one is trying to get a convention planner to book space in the first one.

[earthling]

All understood. However the parent company (Marriott example) could develop a business process (through the booking system) that works with the indie operators of all their different products to come up with a common package for conventions in convention districts. If they aren't attempting that, lots of missed opportunities. They tend to have various hotel products in the same district with different operators. My point is that it's a big fail if they're not doing that.

[kboish]

All understood. However the parent company (Marriott example) could develop a business process (through the booking system) that works with the indie operators of all their different products to come up with a common package for conventions in convention districts. If they aren't attempting that, lots of missed opportunities. They tend to have various hotel products in the same district with different operators. My point is that it's a big fail if they're not doing that.

This also seems like something the KC Convention and Visitors Association could/should help organize. Since they're the ones who recruit conventions anyways, why not have some sort of system that offers the hotels as a package. Would be a great sales pitch when someone asks, "Where's your 1000 room convention hotel?"

[earthling]

Downtown Marriott is already something like 960 rooms. Westin/Sheraton offers single booking and is over 1400 rooms. Would be great if KC can attract another with low incentives but is likely less risky for all parties to do multiple 200-300 newly built, especially given there are over 50 convention wannabee cities now and is not a growing industry. Distribute the risk.

[aknowledgeableperson]

That is one of the things the CVB does - help with hotel rooms. That still does not take the place of individual negotiations by the individual hotels. And by negotiations I mean how many rooms a hotel is willing to commit and at what price at a particular time. One thing to remember a hotel might have 300 rooms but may only be able to commit say 200 rooms at that particular time because of some prior commitments. Or maybe not be able to commit at all because another organization has booked space in the hotel during the time of the big convention.

It is not a software problem. Software cannot take the place of negotiations.

[flyingember]

Downtown Marriott is already something like 960 rooms. Westin/Sheraton offers single booking and is over 1400 rooms. Would be great if KC can attract another with low incentives but is likely less risky for all parties to do multiple 200-300 newly built, especially given there are over 50 convention wannabee cities now and is not a growing industry. Distribute the risk.

again, this idea is what's causing KC to *lose* conventions.

if we want conventions we have to listen to convention planners. and they don't want to work with multiple hotels

[earthling]

T
It is not a software problem. Software cannot take the place of negotiations.

Effective Business Process Management fixes those problems, and software can aid BPM. Those who say it can't be done, won't get it done. Innovative people make it happen.

http://en.wikipedia.org/wiki/Business_p ... management

And does KC really need a 3rd convention center hotel, enough to heavily fund one? Not with 50 other cities wanting to be a convention city.

[aknowledgeableperson]

For one organization that would work. But each hotel is its own organization so you are dealing in multiples. Those organizations are in competition with one another and will only cooperate so far, and only when they see a benefit to do so. Self interest is their number one concern.
A third convention hotel? The city doesn't even have one. The CC hotels are too far away to be considered. The Marriott comes close but it is a property that is not considered as such.

[pash]

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[flyingember]

tourism returns 4-5 dollars for every dollar spent on advertising an area. (they're statewide numbers, I'd have to really dig to find the report)
as they're concentrated, conventions cost less money to bring the same number of people.

a single large convention can give the city hundreds of thousands to millions in dollars in profit, not from the event itself but all the taxes on rooms, airline tickets, meals, etc

[mean]

You sure about that? The main reason Hyatt in CC went to Sheraton is because Westin next door has same parent as Sheraton, so one entity to book both hotels for convention planners.

That's the excuse given by CCRC representatives. I have an extremely credible source in a position to know, who claims that the real reason is Hyatt was demanding some $200 million in renovations to maintain corporate standards, CCRC balked, and Starwood settled for (I think) something like $25 million in renovations.

[flyingember]

You sure about that? The main reason Hyatt in CC went to Sheraton is because Westin next door has same parent as Sheraton, so one entity to book both hotels for convention planners.

That's the excuse given by CCRC representatives. I have an extremely credible source in a position to know, who claims that the real reason is Hyatt was demanding some $200 million in renovations to maintain corporate standards, CCRC balked, and Starwood settled for (I think) something like $25 million in renovations.

I'm sure the money mattered, but I bet the chance to have one entity to deal with didn't hurt when that became true.

[pash]

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[aknowledgeableperson]

Someone remind me why conventions are so important to Kansas City.

Reason #1 - JOBS.
Reason #2 - JOBS.
Reason #3 - JOBS.

To start there are the various jobs in hotels. And depending on catered functions there are jobs for servers, cooks, etc. With that don't forget the food purchased locally. At the convention center or at the hotels jobs to set up and tear down exhibitor space plus the various rentals that go with exhibits. Don't forget the stores and restaurants convention goers visit as well as the sightseeing visits.

I would like to see numbers on convention economics, if anyone can point me at some.

Numbers are numbers and can be adjusted every which way but there are some of the sources for tax money.
Hotel/Motel Tax plus the surcharge for the SC
Restaurant Tax - of course that helps pay off the CC bonds
E-taxes for hotel workers, caterer staff, and other workers
Sales taxes at various places
Car Rentals taxes which also help pay for the SC
And I am sure there are other revenue sources such as those generated at the airport.

[flyingember]

a single large convention can give the city hundreds of thousands to millions in dollars in profit, not from the event itself but all the taxes on rooms, airline tickets, meals, etc

It would have to be a massively large convention to generate hundreds of thousands or millions in revenue for the city. If 1,000 people show up and spend $1,000 apiece, the city takes in roughly $10,000 in total taxes.

I would like to see numbers on convention economics, if anyone can point me at some. I can believe there may be a net gain to the city as a whole, but I'm skeptical conventions make money for the city government after considering all the costs. ...

you're way underestimating, do you know what the tax rates are?

the hotel *fee* is $1.50/room/day. that's $3000 for 1000 rooms for a three day event
the tax for the same rooms is 7.5%. if room average $100 per night (crazy low) that's $15,000 for a three day event
a car rental has $40 in taxes for a week. say $20 for a weekend to round down. If 200 cars are rented for the convention that's $4000 in car taxes
if all 1000 people spend $100 on food roughly 3% goes to the city. that's $3000

we're up to $25,000 right there

part of the airfare goes to KC too, can't find good info on it though

[pash]

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[FangKC]

Well, there is more than the direct taxes from hotels, restaurants, and car rentals. All the vendors that deal with hotels, restaurants, entertainment vendors, etc. collect sales taxes ranging from outsourced laundry to caterers. All the people employed by all related activities also pay earnings taxes. The convention industry helps support these people. The hotels, restaurants, and entertainment venues have to buy supplies to serve the convention visitors. There are taxes collected on those supplies.

Visitors help subsidize our airport with their additional numbers, and the fees they pay to travel here.

Almost every time a dollar is exchanged from hand-to-hand for a service, sales taxes are collected. It's a multiplying effect all through the local economy. A conventioneer pays $20 for dinner. Sales taxes are collected on that. The restaurant buys food and cooking supplies. Sales taxes are collected on those. The restaurant pays a vendor for clean linens. Sales taxes are collected on that. The restaurant pays employees. Earnings and income taxes are collected by the city and state. A visitor pays to have dry cleaning done. Sales taxes are collected.

The visitor gases up a rental car. Gas taxes are paid.

Every time a bottle of liquor is opened, sales and liquor taxes are collected. They buy a pack of cigarettes, excise taxes are collected.

Even museums benefit from visitors frequenting their exhibits. The casinos benefit.

Kansas City residents benefit from better amenities because of conventions. We have a big auto and home and garden show at Bartle. We have a great ballroom for local events. Conventioneers help subsidize the Power & Light District, and help keep the bars and restaurants open for locals to frequent and downtown workers for lunch options. The KC Rep. theater moved into Copaken Stage, adding more entertainment options for locals.

Local banks collect ATM fees from visitors.

Because P&L was built, more apartments have been developed downtown for local residents. There's a grocery store open, a movie theater, and a downtown swimming pool. The Midland got renovated, and booked with more shows. A new YMCA may be built downtown. More concerts come to KC because Sprint Center was built. The City gets a few million from Sprint Center every year. Some of this wouldn't have happened without P&L being built.

Remember that P&L was pushed through because of complaints by the convention industry that there was nothing for visitors to do downtown. Now that it exists, local residents and businesses benefit in a variety of ways.

While it cannot be calculated, we really don't know how many companies and businesses would have abandoned downtown without the public investments that have been made. Several companies decided to move downtown, or stay put--like Sporting Innovations. Would Populous and J.E. Dunn have built a new headquarters building? Would Trozzolo and Barkley have invested in renovating an old one? Would UMKC be considering creating an arts campus?

The City might have lost the President Hotel. The Phillips and Aladdin might not have been renovated, the Ambassador might not be open, and we would have three more empty buildings, and another vacant lot.

Sure this is an alternative universe situation--like one sees in old movies when the premise is how lives would be changed for the worse if a character had not lived, or done a specific thing. It's a cascading ripple effect.

But the reality of life is such that decisions are often made solely on the decisions others have made.

One of the things about healthy cities is that they continue to reinvest in themselves, and make improvements. Others look at the City and resident's commitment to themselves, and they also make judgments about whether they will take a risk to invest there. Investors are more willing to place a bet on a person or City that is willing to make an investment in themselves.

The convention industry also has another effect. It introduces visitors and business people to Kansas City, and it may very well change their preconceived notions and perceptions about our city.

I never once thought I'd ever like in New York City. They I went there to visit a friend for a week. A year later, I moved there, and lived there for 10 years. Visiting a place can change one's mind. We don't know how many people have moved to Kansas City after a visit, and discovered that we had the amenities I've mentioned, as well as having good restaurants, a symphony, ballet, opera, a theater scene, and an arts district. That this is a pretty city with architecture, good museums, fountains, art, and boulevards. That we are not some cow town out on the prairie, but a city of rolling hills and tree-lined streets.

[flyingember]

OK, I think I underestimated the scale of travel taxes a bit. (But you also don't get 1,000 car rentals and 1,000 hotel rooms out of a conference attended by 1,000 people. I bet the actual tax revenue is in the $15,000–20,000 range for a large conference.)

Still, you're off by roughly a factor of ten for "hundreds of thousands" in tax revenue, or a factor of a hundred for "millions". Now consider the substantial costs of running a convention bureau, building and maintaining a convention center, and subsidizing hotels—someone on KCPT's local talk show pointed out this week that one of the downtown hotels already costs the city a million dollars a year in direct subsidies, over and above TIF—and is it at all obvious that the convention business should be a priority for this city?

I gave 5 examples and still under estimated the scope

How about transportation alone for what's taxes

Taxi fares. I saw one convention with more than 50 taxis waiting (I counted)
shuttle van staff
Valet drivers at hotels wages
Delivery drivers wages
Parking attendants wages
Parking fees
City bus fares
Gasoline taxes
Maintenance expenses for vehicles to get them ready, cleaning, oil change, etc
Staff for maintenance wages
Rental counter staff wages
Parking meter attendants
Bcycle staff
Parking enforcement staff (some people will illegally park)
Wages for city staff- cops to direct traffic
Airline pilots wages
Airline ticket prices
Train tickets
Train engineers
Support staff at airports, stations and bus company

Imagine the scale there for a 1000 person convention and just how many times people make taxable purchases just for transportation or involve taxable wages to support transportation