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State Aid for Proposed $200 million Subsidy for New Convention Hotel Next
to the Boston Convention & Exhibition Center Very Risky Strategy

By Jerry Kronenberg, Boston HeraldMcClatchy-Tribune Regional News

March 22, 2011--TAXPAYERS MIGHT -- or might not -- get their money's worth out of a proposed $200 million subsidy for a new hotel next to the Boston Convention & Exhibition Center, an industry expert says.

"It's not always a case of, 'If you build it, they will come,' " said Jeff Higley of Smith Travel Research, a Nashville-based firm that follows the hotel market.

Convention Partnership, a group of officials tasked with deciding whether to expand the BCEC, is reportedly suggesting using $200 million in government incentives to attract a new 1,000-room hotel to the site. Convention center officials claim they need to expand both the convention center and nearby hotel space if Boston hopes to attract more major conventions.

But Higley called using public aid to attract a hotel "a risky proposition. "The big question is are you actually adding business to the equation, or are you just moving business around," he said.

Higley added that even with government subsidies, it's not clear the BCEC can attract a new hotel. "There has to be sufficient market demand for any hotel operator to come in," he said.

Hub hoteliers say that, while any new complex would create fresh competition, they agree that Boston needs more hotels to snag big conventions.

"As a hotelier I'd obviously prefer to see fewer hotel rooms in Boston --but I'm also a realist," said David Conner of the Westin Boston Waterfront Hotel, which received subsidies for its construction next to the convention center. "To get large events, we need to have enough hotel rooms in town."


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