|By Douglas Hanks III, The Miami Herald
Knight Ridder/Tribune Business News
Mar. 28, 2006 - Adding a $50 million banquet hall to the Miami Beach Convention Center would bring only a minor boost to bookings because hotel room rates are still too high for most conventions, according to a survey released Monday.
The findings contradict the long-standing argument by hotels and tourism leaders that Miami Beach consistently loses convention contracts to other cities because it can't offer a hall appropriate for large speeches and 1,000-seat dinners.
"For half the year, no matter if you built a 100,000-square-foot ballroom, you're going to have this challenge" of high room rates, Jeff Sachs, a partner in Strategic Advisory Group, told city commissioners at a four-hour session dedicated to the convention-center debate.
Miami Beach hired the Duluth, Ga., company to conduct the study as city commissioners debate the first major upgrade of South Florida's largest convention center since 1991.
With $55 million in county funds available, the debate has focused attention on broader changes in South Florida's tourism industry, which this decade has attracted a wave of luxury hotels from Fort Lauderdale to Key West.
Fueled in part by sales of condo-hotel units, the influx of pricey rooms has left Miami as one of the most expensive hotel markets in the country and led to warnings that the high rates will scare off conventioneers.
Conventions last year posted their best performance in Miami Beach since 2001, though that only amounted to six large conventions at the center. The majority of the convention center's bookings come from trade shows and consumer events, which generate a relatively small number of hotel rooms.
Backers of the proposed 50,000-square-foot banquet hall rejected the SAG study for being conducted in only two weeks and making conclusions based on Internet questionnaires completed by only 50 meeting planners.
They pointed to an existing study showing 20 other convention cities offering banquet halls ranging in size from 40,000 to 120,000 square feet -- plus amenities, they said, which put Miami Beach at a severe competitive disadvantage.
Unlike the cavernous exhibit halls available at the Miami Beach Convention Center, a ballroom typically offers chandeliers, carpeted halls and other finishes meeting planners want for large meals and speeches.
"This is fairly stark to me," said John Kaatz, whose Minneapolis company, Conventions Sports & Leisure, was hired by the Greater Miami Convention & Visitors Bureau to study the ballroom issue. "I can put up the 15 or 20 cities you compete with, and every one of them has a ballroom."
NOT ON WISH LIST
The SAG survey found only 12 percent of meeting planners put a new ballroom at the top of their wish list for the Miami Beach Convention Center, while 40 percent most wanted either more hotel rooms closer to the facility or cheaper rates.
About 85 percent of the planners surveyed said they would use the Miami Beach facility without a new banquet hall. Though costly, conventions often convert one of Miami Beach's exhibit halls into a banquet facility.
The survey also found that convention demand peaks in April, the third priciest month for Miami Beach's largest hotels. Another heavy demand time, September and October, comes at the height of hurricane season.
Copyright (c) 2006, The Miami Herald
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