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Convention and Tourism Marketing Falling Short in Columbus, Ohio;
For First 7 Months Columbus Hotels Ran 56% with RevPAR at $43.75

By Marla Matzer Rose and Elizabeth Gibson, The Columbus Dispatch, OhioMcClatchy-Tribune Regional News

September 19, 2010 --In a central Ohio tourism industry that generates $7 billion annually, convention business is king because big groups tend to stay longer and spend more than individual business travelers or tourists.

The people charged with bringing meetings, conventions and sports events to town are seeing some improvement, but the picture remains mixed because of the deep downturn nationwide that is still being unwound.

On the one hand, there's good news: Convention bookings are up, and so is revenue from Columbus bed taxes -- the charge on top of sales taxes on hotel rooms.

The bad news is that bed taxes are up only because the number of people traveling has increased slightly. With a still-weak economy and price-sensitive groups such as state associations making up a large portion of Columbus' business, local hotels haven't been able to raise rates, which they must do to be profitable.

The board of Experience Columbus last week reviewed numbers for the first seven months of the year just released by Smith Travel Research. The data show that compared with "competitive" cities, Columbus is in the middle of the pack in terms of occupancy, with a rate of about 56 percent, but the city is dead last in the amount of money hoteliers make on each room.

At $43.75, Columbus' revenue per available room is weak compared with Pittsburgh ($62.61), Nashville, Tenn., ($51.92) and Milwaukee ($48.69).

"I'm scared to death. It's the worst report I've seen in years," said Charles LaGarce, president of Columbus Hospitality Group, which oversees several Downtown hotels.

There are more clouds on the horizon because in two years, the Hilton Columbus Downtown, a new, publicly financed hotel, is scheduled to open across from the Greater Columbus Convention Center. It will add 532 rooms and could further hurt existing hotels if new business isn't brought in.

"When a major new hotel comes into a community, you really have to be selling the entire new package the city has to offer three years in advance," said Paul Astleford, CEO of Experience Columbus, the former Greater Columbus Convention & Visitors Bureau. "We're already a year behind."

It's not that local convention promoters have been sitting on their hands. Because of budget shortfalls, Experience Columbus has held off on replacing its former marketing chief this year, although the group now hopes to bring on a replacement by November.

The concern about a lack of funding to market central Ohio's assets to conventions and events has been swirling for some time.

"My biggest fear," LaGarce said, "is that there is supposed to be a substantial increase in the dollars being spent to bring in new business. We haven't seen any of that yet, nor is anyone saying that it's coming."

Experience Columbus' appeals to local politicians to come up with more marketing money have taken on new urgency this month. Astleford said the emphasis is on persuading city leaders to devote more money to Experience Columbus in this budget cycle, possibly by looking at the allocation of bed taxes that flow through the city.

The bed tax is 10 percent, with slightly less than half going to the Franklin County Convention Facilities Authority, which operates the Greater Columbus Convention Center and owns the land on which the new Hilton is being built. The rest of the revenue from the bed tax is funneled through the city of Columbus.

No one is talking about raising the bed tax because Columbus already has one of the highest levies in the country when combined with the state and local sales taxes.

Columbus' effective 16.75 percent tax, which includes the 6.75 percent sales tax, trails only Cincinnati's 17 percent among competitive cities; Minneapolis and Milwaukee have rates of less than 15 percent, while Cleveland and Charlotte, N.C., are both at 15.25 percent.

The convention facilities authority has increased financial support to Experience Columbus. It pays for half the cost of its one-person Washington sales office targeting national association business and has increased to $250,000 per year its support to the Columbus Sports Commission, which was spun off from Experience Columbus to focus on attracting sporting events.

Experience Columbus executives and board members say their share of the bed tax has been diluted over the years in ways that never were intended. A good chunk goes directly to the city general fund, with smaller amounts going to specific human-services initiatives.

A big slice also goes to the Greater Columbus Arts Council, which in turn distributes grants to arts groups across the city such as the Jazz Arts Group. The group's executive director, Bob Breithaupt, sits on the Experience Columbus board.

He said last week that his colleagues in arts administration are "cautiously optimistic" that a solution can be found to Experience Columbus' funding problems that does not take away significant funds from Columbus arts groups, many of which are struggling financially.

Astleford is quick to add that Experience Columbus isn't looking to take money from anyone else.

"All the work being put into the new hotel and the surrounding marketing effort is for one purpose -- to make the pie bigger for everyone," Astleford said. "That means income taxes, property taxes, money to human services."

Even as Experience Columbus operates on a deficit, its event bookings for the year through August are up 4 percent, to their highest level since before the recession began in 2007.

For the first eight months this year, the group booked groups representing 156,035 future room nights. That compares with 144,288 for the same period last year and 133,556 for the first eight months of 2008.

Tourism leaders agree that the challenge for Columbus these days isn't what the city has to offer visitors but the money to market it.

"We've got a nice product. We've got a great convention center and other venues," LaGarce said. "Where we don't compete with comparable cities is that we're $3 (million) or $4 million below them in marketing dollars. If something doesn't start happening today to change that, our trends will be off the chart in the wrong direction."

Out in the suburbs, convention and visitors bureaus have had similar concerns in recent years. They have had to rethink their priorities and find new sources of revenue to keep hotel beds full.

Although they seem to be doing better this year, bed-tax collections in Dublin, which has the largest visitors bureau outside Columbus, fell about 17 percent last year, said Scott Dring, executive director of the bureau.

Dublin's hotels relied heavily on corporate travel, which took a hit during the recession.

In response, Dring's agency has turned more to youth sporting events, bus tours and small groups. It hired a new sales representative last year to focus strictly on small events for social, military, education, religious and fraternal groups. It also started providing incentives, such as a free trip to the Hocking Hills, to residents who give the agency leads on potential events that could be brought to Dublin.

Smaller suburban bureaus have felt the economic slump to varying degrees. Some rely entirely on bed taxes, while others receive money from events and grants.

The Gahanna bureau had to cancel its annual holiday parade this year to avoid cutting other programs. It already had been struggling to raise money for the event, and then city officials decided they couldn't donate city services such as police for security because the city budget was tight.

In Reynoldsburg, lawyers have been volunteering to help their visitors bureau apply for grant money, and nonprofit groups have been springing up to help pay for events that traditionally were run by the city and the Reynoldsburg Visitors and Community Activities Bureau, said Mary Hudson, director of the bureau.

The Grove City Visitors Bureau has had to rework its advertising. Where it might have bought a large newspaper ad before, now it might buy an ad half the size or at lower last-minute rates, Executive Director Jim Hale said.

Although some things have had to go, the situation isn't dire, Hale said. He's still launching new marketing campaigns, hoping big-impact events can compensate until the hotel industry recovers.


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