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Expanding The Convention Center in Philadelphia to 1,000,000 Sq Ft on
 Budget at $786 million; Group Bookings in 2011, 2012 and
 2013 Looking Good

By Linda Loyd, The Philadelphia InquirerMcClatchy-Tribune Regional News

Jul.y19, 2009 - The expanded Convention Center rising east of North Broad Street is about 30 percent completed and slated to open in the first quarter of 2011 and on budget at $786 million.

The concrete and steel superstructure is 65 percent finished. The second phase of construction -- the interior finish -- is nearly 10 percent complete, project executive Joseph J. Resta told the Convention Center Authority board last week.

Although 23 days of rain in June delayed pouring concrete, crews are catching up, Resta said.

Extending the original Convention Center from 13th Street to Broad Street, between Arch and Race Streets, will give the facility about a million square feet of exhibit and meeting space, a 60 percent increase.

The larger center can accommodate meetings of 25,000 to 30,000, or two smaller conventions simultaneously.

"We currently lose business because two groups want to come in on the same date, and we don't have space," said Jack Ferguson, vice president at the Philadelphia Convention & Visitors Bureau.

But in this economy, are groups booking? And will they come?

"In 2011, 2012 and 2013, bookings look pretty good," said Convention Center Authority President and Chief Executive Ahmeenah Young.

What does not look so good is next year. "2010 is not looking well at all," she said.

When it became clear that the new building would not be ready in 2010, several conventions moved to future years, while other tentative bookings were lost.

Then, when the economy took a nosedive in 2007 and 2008, groups began booking closer to the date of their event.

While no major conventions have canceled, they are looking for deals, Young said. And they are sending fewer people, buying sandwiches instead of filet or chicken dinners, downsizing exhibits and trade shows, and using more video conferencing instead of flying speakers in.

"The number of people coming is smaller," Young said. "A company that may have sent two or three people in the past now sends one. If they sent four, it's two. The exhibits are not as elaborate. If you have a smaller booth, then it's less electrical work and less money to us."

Groups are hosting fewer big luncheons and dinners.

"That impacts us as well because we get a commission," Young said. "Areas that were revenue producers, we are losing because of the sheer lack of volume.

"On the other hand, we have had no cancellations."

The center sales staff and the Philadelphia Convention & Visitors Bureau are scrambling to get more short-term bookings.

"Short-term sales are really ramping up and filling in the gaps," said Stephanie Boyd, the authority's vice president of sales, marketing, and convention services. These include pharmaceutical meetings, religious banquets, exam testing.

"The early part of calendar year 2009 looking into 2010 was a scare," Boyd said. "We are all focused on filling 2010 because of the economy."

Young said groups that used to book three, five, seven years out "are not inclined to do it. Their companies don't want to commit to the money. It allows meeting planners to play cities off each other," she said. "So they will talk to us, San Diego, Baltimore. It's almost like, 'Who will give me the best price?'"

With fewer conventioneers filling hotel rooms, the Convention Center has seen a drop in hotel-tax revenue of 5 percent to 8 percent this year, Young said.

Hotel-tax receipts for the fiscal year ended June 30 were $21 million, about $1.3 million below the $22.5 million budgeted, the authority director of audit and treasury services, Carol Hunt, told the board Wednesday. That money is used to fund the center's debt service.

In June, $2 million in hotel-tax receipts was $235,000 below budget projections.

Although the city and state are currently embroiled in budget crises, the Convention Center expansion is funded out of the state capital budget.

"It comes from a different source than the general operating budget," Resta said. "These are funds that were legislated in 2004 and 2006. The money is already there. It's set aside. We get our draw every month from the state."

With less money from hotel-tax receipts, food and beverage sales, and electrical work for trade shows and fancy exhibits, the Convention Center has had to tighten its belt.

"We are not hiring. About two months ago we laid off six people," Young said, adding, "We are certainly being impacted by this economy, and I don't know who isn't. Everything is off."

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Contact staff writer Linda Loyd at 215-854-2831 or lloyd@phillynews.com.

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To see more of The Philadelphia Inquirer, or to subscribe to the newspaper, go to http://www.philly.com/inquirer.

Copyright (c) 2009, The Philadelphia Inquirer

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