Convention officials say funds paid off Budget increase credited for spike in bookings for center

'Still a long way to go'

Even with increase, numbers fall far short of projected gains

Downtown

November 10, 1997|By Gary Gately | Gary Gately,SUN STAFF

Baltimore's convention bureau, which scrimped for years on a fraction of what competitors spent to lure business, says a long-awaited budget increase is paying big dividends -- hundreds of millions of dollars in bookings.

But even with $650 million in convention business booked last fiscal year -- a $270 million increase -- bookings still remain far short of projections used to justify the Baltimore Convention Center's publicly financed, $151 million expansion.

Leaders of the Baltimore Area Convention and Visitors Association attribute the spike in bookings to a spending increase that doubled its budget to $6 million, significantly narrowing the gap between Baltimore and competing cities.

"This is all a direct result of, number one, the additional funding," said Carroll R. Armstrong, president and chief executive of the convention bureau. "Instead of providing a lot of lip service and hype, I like to look at results, and these numbers certainly demonstrate that we're on the right track."

With the increased funding, the convention bureau has launched its first national advertising campaigns, created new sales and research positions and increased sales blitzes and calls on influential meeting planners.

Armstrong pointed to bookings for fiscal year 1999, beginning July 1, which rose from about 108,000 to 207,000 hotel room nights generated by convention center business. (Hotel-based gatherings booked by the nonprofit agency account for 42,000 more room nights, for a total of 249,000).

But he acknowledged that bookings still fall far short of projections. The bookings for fiscal year 1999, for instance, would generate less than half the annual $340 million in direct spending, and accompanying $30 million in tax revenue, projected with the expansion's completion last spring.

Convention business drops off precipitously from 2000 to 2002, intensifying fears that, barring a dramatic rebound, the expansion is at risk of becoming a costly, publicly financed failure.

The most critical missing element, in the view of Armstrong, tourism experts, business leaders and state legislators, is a large headquarters hotel near the convention center.

"We won't get there without a headquarters hotel that is in close proximity to that convention center," Armstrong said.

To make his case, Armstrong looks no farther than Philadelphia, where a 1,200-room Marriott adjoining the Pennsylvania Convention Center has helped make the city a choice destination among those who book gatherings in the $83 billion-a-year meetings industry.

"Philadelphia is going to eat our lunch, and that's a shame," Armstrong said. "They have had the business they could never get because of that center and the 1,200-room Marriott. We've got to get busy building a headquarters hotel here."

The best site for the hotel, he said, would be city-owned parking lots across from the convention center, where Orioles owner Peter G. Angelos wants to build an 850-room Grand Hyatt linked by walkway to the convention center.

The bureau has scrambled to play catch-up: It scrimped for years with no advertising and bare-bones marketing, spending only a half to a third of what competitors spent, until the General Assembly intervened with a one-year emergency measure doubling its budget last fiscal year.

The convention bureau got a permanent funding boost when Mayor Kurt L. Schmoke agreed to a compromise in January that funnels 40 percent -- or about $4.6 million this fiscal year -- of annual city hotel tax revenues to the bureau. With a state contribution of $700,000 and convention bureau members' fees, the bureau's budget remains about $6 million. The annual budget will now be directly tied to hotel tax revenues.

But in its attempt to fill gaps for soft future years, the bureau has resorted primarily to smaller meetings with 500 to 1,500 delegates because of the lack of a large headquarters hotel near the center and, more broadly, a shortage of rooms downtown available for conventioneers, particularly during peak season.

Most of the larger conventions are already committed: They typically book at least three to five years in advance.

The controversial $132.6 million Wyndham Inner Harbor East, with 750 rooms, would provide much-needed downtown hotel space for conventioneers, Armstrong said, but would not fill the need for a headquarters hotel many meeting planners demand.

Del. Howard P. Rawlings, chairman of the General Assembly's powerful House Appropriations Committee who played a pivotal role in the center's expansion and funding for marketing, said the new bookings demonstrate the importance of marketing. But he added that the lack of a headquarters hotel jeopardizes the taxpayers' investment in the convention center expansion.

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