Rollin Stanley is the former chief planner of Calgary, where he also led three city departments. He previously led planning efforts in the Maryland suburbs of Washington, D.C., worked as the head city planner for the Mayor of St. Louis, and spent 21 years in Toronto’s planning department.
Just like struggling malls in our Amazon era, cities are overbuilding convention centres, missing all the signs of the changing marketplace, failing to grasp how people communicate and chasing a dying business model. The rush to buy into the promises of convention centres ignores that they’re all about location, more than any other factor, and that the market is saturated; there are more than 300 facilities in North America, comprising 8 million square metres of space, vying for the same business. Like Walmart parking lots, they’re only filled a few days a year.
And yet politicians and consultants continue to tell us that “if you build it, they will come.” Never mind that that hasn’t been borne out – what’s worse is that the public funding that pays for them never quite finishes the job, because when the shine wears off, boosters will say that expansion to attract big events is the only solution. It’s how it goes. Just last year, the city of Halifax revised the 10-year projections for its new facility from a surplus of $6-million to a deficit of $18-million.
Calgary is just the latest Canadian city to find itself mired in this quandary. The city supports two convention facilities – Calgary Telus Convention Centre and the BMO Centre – and despite all the evidence against spending more money on any centres, all three levels of government have announced a $500-million redo of the latter. The promise of the renovation: Expand, and Calgary will get the big conventions. And while convention-centre advocates say that facilities do not make money, business and government will. After all, they crow, convention-goers spend locally.
But will they? Worldwide tourist destinations like Las Vegas, Toronto, Chicago, Vancouver, New York, Denver, Nashville and Orlando are category killers – the cities the major conventions want to go to, since they boast all the amenities and attractions that attendees and their partners would want. But of the 42 million people visiting Las Vegas last year, only 15 per cent were there for a convention. Denver had 31 million visitors two years ago, yet the number of conventions dropped 20 per cent – reflecting how one big gathering, the kind that happens every 10-plus years, can skew results. The facility in Los Angeles only just turned a profit, and L.A. gets about 50 million visitors a year.
The Economist ranks Calgary as one of the world’s best cities to live in, higher than Vancouver and Toronto, but only the latter cities are considered tier-one locations. Of Calgary’s 7.7 million visitors last year, the business proportion has dropped from 25 per cent to just over 10 per cent due to the oil price crash – a market that suggests a less-than-propitious outlook for big conventions in the city.
The planned upgrades to the BMO facility equates to another suburban big box in a world of changing trends and demand. At the other end of the spectrum is the smaller, downtown Telus facility. There, management is looking overseas, realizing Calgary cannot attract enough big conventions away from the tier-one cities. In the growing international marketplace, the connected, tech-savvy, strategically-themed meeting destinations will win – much like Amazon won customers from brick-and-mortar retail.
The current and future oversupply in the convention marketplace should worry those responsible for the public purse. Unlike failing shopping malls and big box stores that become home to church congregations and large fitness facilities, underperforming convention centres are money pits for public debt, and lock up highly valuable real-estate for largely vacant space. Cities must ignore the consistent exaggerated predictions and stop doubling down and investing more of the public purse in a dying business model – and lining up, again and again, for the right to do so.
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