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near the Minneapolis Convention Center , Downtown Minneapolis' Inadequate Hotel Inventory Negatively Affects Future Convention Business |
| November 30, 2004 - The results of a newly released
convention hotel feasibility study overwhelmingly demonstrate the need
for a new 1200-room hotel near the Minneapolis Convention Center. In addition,
the study says, expansions of existing hotels should be considered. This,
to secure convention business that competitive cities are luring away from
Minneapolis.
Funded by the Greater Minneapolis Convention & Visitors Association (GMCVA) and conducted by real estate and hospitality consulting firm, Chicago-based C.H. Johnson, the first phase of the study cites how downtown Minneapolis' inadequate hotel inventory negatively affects the ability to attract future convention business, and outlines how additional hotel projects will remedy the situation. The second phase will identify funding options. "We did this study to see where Minneapolis stacks up against competitors so we can plan for the future," said Greg Ortale, GMCVA president and CEO. "Going into it, we felt adding a hotel was necessary, but the results of the study were stunning." While the entire Minneapolis-St. Paul metro area contains enough rooms to meet most meeting planners' needs, it does not have a large enough downtown hotel package (a cluster of group hotels close to the Convention Center) to remain competitive. "Generating future convention business is like an insurance policy for the city. By adding a major new hotel, we attract additional convention business, as compared to building small hotel properties, which slices the existing market thinner," said Ortale. Based on the feasibility study's findings, bottom line conclusions include:
The problem is not only the lack of a hotel but, in particular, not enough rooms close to the Convention Center. An adjacent room block of 3000 is needed to secure sizable conventions that the expanded Minneapolis Convention Center can accommodate with its exhibit and meeting space. Currently, there are 20 downtown hotels containing 5101 rooms. Only 2004 of those rooms are in what is considered an optimally proximate walking distance (within four blocks or 1000 feet of the Convention Center). On average, Minneapolis has 2800 fewer proximate rooms than its comparative
set.
of hotels that fall within the four-block / 1000-foot radius defined as walking distance. One New Hotel, Plus Expansion Needed A new downtown convention hotel will help make the Minneapolis meeting product "more acceptable to meeting planners ... " states the study. "Without it, the market will stagnate and existing business will move to locations across the U.S. where the convention center and hotel package is more attractive." The study recommends the following for a convention hotel development:
$821 Million in Economic Impact Already Lost Lost convention business between 2001 and 2012 because of Minneapolis' lack of available hotel inventory totals 138 events and counting. This includes 1 million lost room nights and $110 million in lost room revenue. With a total attendance of 764,000, these groups represent $821 million (Estimated using 2004's per convention delegate spending figure of $1075, calculated by the International Association of Convention & Visitors Bureaus) in lost economic impact (total spent by attendees). For nearly two-thirds of these groups, lack of hotel inventory was a deciding factor. The remaining one-third of the groups wouldn't even consider Minneapolis because of its limited hotel offerings. Sixty-six percent of the events that did not select Minneapolis (when it was among finalists) cited:
Competitive Cities Building, Expanding Hotel Inventory The largest hotels in comparable and competitive cities contain more than 1000 rooms. Minneapolis' largest convention hotel -- the Hilton Minneapolis -- has 830 rooms. Many of Minneapolis' competitors are adding more hotel inventory:
The next phase of the project will start with the presentation of funding options by a financial consultant hired by the GMCVA. This will be completed by the end of 2004. |
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| Contact:
Laura McCarthy
|
| Also See: | Minneapolis Hotels Wait for Business Rebound; Debate 1,000+ room Convention Hotel / August 2003 |
| A History of The Radisson Hotel - Downtown Minneapolis / Jan 1998 |