The competition for conference bookings in the Lower Mainland is about to intensify.
That’s because September 14 will mark the grand opening of the Anvil Centre, a new civic centre bringing up to “18,000 square feet of dedicated function space” to downtown New Westminster, according to its marketing brochure.
The launch of the city-owned conference space in the Anvil Centre comes at a precarious time for the convention industry.
According to a new book by University of Texas at San Antonio professor Heywood T. Sanders, centres across North America are not attracting nearly as many visitors as originally forecast when these multimillion-dollar facilities were built.
The Vancouver Convention Centre is among those feeling the pinch as nonresident-delegate days have fallen sharply over the past two years.
“There’s been this enormous space boom—from 2000 to 2013, a 37-percent increase in space in the U.S.,” Sanders told the Georgia Straight by phone. “I don’t have the Canadian numbers off the top of my head, but there’s been a parallel increase. There’s a new centre in Niagara Falls. There’s a new centre in Ottawa.”
In Convention Center Follies: Politics, Power, and Public Investment in American Cities (University of Pennsylvania Press), Sanders documents how this industry is often falsely presented as a pot of gold, justifying massive public investments in new buildings.
However, these convention centres never attract as many delegates as promised in consultants’ reports.
He suggests in the book that the major beneficiaries of these massive subsidies are nearby property owners who enjoy a lift in land value, not taxpayers who pay the bills.
He told the Straight about the Music City Center in Nashville, which cost $623 million. It was supposed to generate 442,000 hotel-room nights on an annual basis but he said it only achieved 272,000.
Sanders also mentioned that the North American city with the largest convention centre, Chicago, doubled its amount of convention space in the McCormick Place.
“They are now doing a little better than half the business they did a decade ago,” he noted.
It’s a similar story in Las Vegas, another premier convention market. Its convention centre doubled in size in 2002, yet according to Sanders, it generated less of this business last year than it did in 1997.
In another example, he cited a consultant’s report claiming that a convention centre in Boston would generate 794,000 hotel-room nights by 2012. According to Sanders, there were only about 320,000 that year.
“Last year, they did 249,631,” he said. “What happens? The Massachusetts state legislature just approved a billion-dollar expansion with yet another consultant’s study.”
The consequences of this glut of convention space are visible in the Vancouver statistics.
In 2011, the Crown corporation that operates the Vancouver Convention Centre, Pavco, forecast 403,000 nonresident delegates in 2012–13. The actual figure was 347,000.
The forecast for the fiscal year ending on March 31, 2014, was 313,000. According to Tourism B.C. statistics, there were only 289,298 nonresident-delegate days over the last four quarters ending in December. “They have dropped back below [where] they were in ’98 and ’99,” Sanders said.
Under normal circumstances, voters must approve large capital expenditures for civic-government-owned facilities in a referendum.
In Convention Center Follies Sanders explains how these facilities’ proponents figured out how to avoid doing this by financing them through hotel taxes and federal and state contributions.
A similar model was employed in Vancouver, where the new convention centre was initially estimated to cost $495 million by the Gordon Campbell government.
The final total was $883.2 million when it opened in 2009. Of that, $540.7 million came from the provincial government, $222.5 million from the federal government, $90 million from Tourism Vancouver through hotel taxes, and $30 million via “generated revenue”.
The City of Vancouver granted the facility a property-tax exemption in lieu of making financial contributions, boosting the public subsidy even higher. Because it’s a provincial building, there was no need for a public vote in advance.
Sanders pointed out that the original KPMG business plan [click downloads tab above] for the new Vancouver Convention Centre forecast an 89-percent increase in annual delegate days, from 395,000 to 747,000.
Nonresident-delegate days, as reported above, have fallen far short of that figure.
Beneath Sanders’s upbeat demeanour lies considerable exasperation over what he sees as a waste of public funds in cities across North America.
“I get seriously angry about the way in which the public is manipulated and misled,” he admitted.