|By Kevin Collison, The Kansas City Star,
Mo.McClatchy-Tribune Regional News
Oct. 1, 2009--The annual Sam's Club meetings are heading back to Arkansas, draining $7.4 million a year from the Kansas City economy and continuing a string of setbacks for the convention industry.
Organizers of the twice-a-year convocations, which brought 5,000 store managers to the Bartle Hall Convention Center in February and 2,000 in August, are shifting the gatherings in a cost-saving move to Bentonville, where Sam's Club has its headquarters.
The Sam's move means Kansas City in short order has lost its top three conventions, ranked by their number of hotel room-nights booked. Wal-Mart last year said it was moving its annual managers convention to Orlando, Fla., and SkillsUSA will move its big annual gathering to Louisville, Ky., beginning in 2015.
"They're huge body blows, and those conventions will be difficult to replace given the current economy," Bill Lucas, chairman of the Kansas City Convention and Visitors Association, said Wednesday.
The losses also come at a time the city thought it was getting its convention act together, providing fresh places to meet, by renovating and expanding Bartle Hall; to play, by building the Power & Light District; and perhaps to stay, with discussions under way for a proposed 1,000-room hotel.
But the man in charge of the business most directly affected by the convention defections, the Kansas City Marriott Downtown, said that despite the new physical improvements, marketing changes were needed.
"The downtown amenities we have now are the best we've had in a generation and a half," said Kevin Pistilli, president of the Raphael Hotel Group. "We need to work together as a hospitality community to be sure we're marketing to the right customer.
"We need to produce with what we have; other cities have constraints too."
Pistilli said the Marriot expects to lose 11,000 room-nights annually because of the departure of the Wal-Mart-related events. Sam's Club is a subsidiary of the retailing giant. The losses are particularly tough, he said, because the winter months, when Wal-Mart and Sam's Club had their meetings, are slow times in the hotel industry.
Rick Hughes, president of the Convention and Visitors Association, said that the combined losses totaled 42,000 hotel-nights, and estimated that the Sam's Club decision alone would cost the community $7.4 million in annual business.
Lucas added that the losses of Wal-Mart, Sam's Club and SkillsUSA were particularly hard to take because none of the groups had any beef with their Kansas City experience. The Wal-Mart and SkillsUSA events had outgrown the downtown hotel supply, and Sam's Club is trying to save money.
"These are issues where we didn't drop the ball," said Lucas, who's also president of Crown Center Redevelopment, the home of the Hyatt Regency Crown Center hotel and Westin Crown Center hotel. "They felt good about the service, which is even more frustrating."
Susan Koehler, a spokeswoman for Sam's Club, confirmed that her company enjoyed Kansas City, where it has met since 2000, and would strongly consider returning. But a new corporate building in Bentonville that includes an auditorium for 950 people can handle the meetings at less cost "and northwest Arkansas has added hotels and restaurants," she said.
The Sam's Club decision also is a blow to the city treasury.
Oscar McGaskey, director of convention and entertainment centers, said his department had budgeted $800,000 in revenue from the two Sam's Club events, and the Wal-Mart decision had eliminated $600,000. SkillsUSA receives free rent for its event.
"We need to hustle and figure out a way to fill that gap," McGaskey said.
In spite of the downturn in convention business, advocates for a new hotel said the estimated $300 million project, which would require substantial public assistance, still made sense. A consultant is expected to be hired by the city by the end of October, and a decision could come as early as next spring on whether to move forward with the project.
McGaskey pointed out that Wal-Mart's decision to move to Orlando was based on a lack of downtown hotel rooms.
"They didn't want to keep people in Overland Park," he said.
Lucas pointed out that many of the cities competing for business with Kansas City recently had opened or were building large convention hotels.
"This reinforces the argument for a new hotel," he said. "You have to do everything you can to be a competitive destination."
Pistilli said that also meant being smarter about marketing Kansas City.
"We need to explore new, creative ways to market our city as a convention destination," he said. "That doesn't mean we wait for a large hotel. We have a wonderful product today."
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