It’s quite an understatement to say that the Salt Lake area convention and meetings situation is rosy.
After all, it’s on a path to top 2015’s records, officials are working to extend the contracts for the huge Outdoor Retailer trade shows, and work continues on developing an 850-room convention center hotel at or near the Salt Palace Convention Center.
“All of our events had strong, strong attendance,” Scott Beck, president and chief executive officer of Visit Salt Lake, told the Salt Lake Rotary Club last week about the 2016 conventions and meetings. “I think a lot of that is due to the economy. The economy is very strong. Travel is sort of a canary in the coal mine. We’re the first or the second to be hit, the last one to come back. When we come back, we come back strong, so it has been a very, very good run for us.”
The year 2015 saw record revenues from hotel rooms, restaurants and rental cars. Hotel revenues alone were $465 million. When rental cars and restaurants are added, the figure was about $4.4 billion. This year likely will see a slight increase, perhaps 3 percent, Beck said.
“We have completely recovered from the Great Recession, and have set all-new benchmarks,” he said.
Not only did 2015 top the marks set during the 2002 Winter Olympics, it also saw record attendance at the Salt Palace, where about 349,000 gathered for conventions and meetings.
The biggest convention economic wallop comes from the Outdoor Retailer winter and summer trade shows. The most recent show attracted 27,000 attendees using 1.2 million square feet — a long way from the 5,600 attendees using 100,000 square feet when the show moved from Reno to Salt Lake City years ago.
“I get asked all the time, ‘Are they going to leave because of our state’s lack of leadership in use of public lands or because of the fight with the federal government over public lands?’ And I can tell you no. Clearly there are members of the outdoor community that aren’t in love with our land-use policy, but they are in love with our city and our state in terms of doing business here,” Beck said.
“The same reasons that companies locate here make this the ideal location for conventions. So they can do this convention — which is a business experience — and they can do it efficiently, effectively and they do it very well in Salt Lake.”
Visit Salt Lake officials are working with the Outdoor Retailer ownership to extend its contract and make other improvements, and Beck said they like that their event is in what has been repeatedly recognized as the best state for business.
“It is not lost on the owners of the trade show that this is a business,” he said. “The trade show is a business-to-business experience. While it is wonderful to have the mountains so close and to have the snow so good, this is about people doing business, and so I’m very confident that we will continue this relationship. …”
Work also is proceeding on the development of the convention center hotel, which Beck said will “grow the impact” of the Salt Palace. It would help Salt Lake overcome its biggest hurdle in attracting conventions and meetings: the lack of suitable hotel packages. Beck said a convention of 5,000 to 7,000 attendees in Salt Lake requires organizers to deal with 21 hotels. In Denver, they’d deal with only nine.
Salt Lake City, by the way, has 700 fewer hotel rooms now than it did during the 2002 Olympics year.
The new hotel will not be unusual in size — the Grand America has 750 rooms and the Little America has 900 — but it will have a unique location and an inventory specifically designed for conventions. Three sites are being considered by the developer: Arrow Press Square and sites on the south and north ends of the Salt Palace site. Legislation calling for a public funding mechanism to construct the facility requires that it be within 1,000 feet of the Salt Palace.
The Salt Palace is about the same size as Denver’s convention center, despite Denver being 3.5 times larger in population, economy and the number of hotel rooms.
“So we have a facility that’s much bigger than our market is,” Beck said. “Therefore, we sort of compete out of our weight class. We’re competing against cities that are quite large in terms of their populations and their economy, yet we do very well.”
The new hotel boosts the chances that more Salt Palace space would be used. Beck said it currently has a poor 54 percent occupancy rate, buoyed by the ballroom’s 85 percent rate but hampered by the 40 percent rate of the building’s exhibit space.
“We have this ability to expand the impact of the convention center, add new inventory — and, remember, we’re 700 [rooms] fewer than the 2002 Olympics — so we think we have the right time, the right size and right means to do this,” he said.
He acknowledged that not all hotel owners like the idea of the new convention center hotel in town. About half of the hotel community loves it, while others see it as unfair, government-supported competition.
“But,” Beck said, “they also know that without it, we’re going to begin to further lose our market share.”