Friday, March 28, 2008
When is Enough, Enough?
The oft-repeated claim that Pittsburgh needs more hotel rooms within the immediate vicinity of the convention center came back again this week. Look at how this issue has morphed: in 1997 when the region was debating the ½ percent sales tax increase, officials claimed that a new center had a lot of people interested in building hotels near the center. In 2001, a subsidy plan was hatched to build a hotel. In 2002, the SEA discussed building a hotel itself. Now gaming will provide $44 million for a hotel, but the tourism community is upset that the developer is only planning 300 rooms instead of 500 to reach a somewhat magical target number of 1,000 connected rooms.
Clearly, the arguments about what happened to the private interest, the fact that subsiding new hotel rooms only opens the door for more subsidies later, and the disadvantage a subsidy will have for other established hotels are being pushed aside. The state has stepped in and its assistance is viewed as sufficient to convince the developer that construction costs or the rate of return just don’t matter—all that does is securing the ever-so-important magic number of hotel rooms, a factor so important that planners did not bother to push for its inclusion when the center was being drawn up.
Pittsburgh is in fierce competition in the convention market (Philly is expanding its center with help from gaming money) and a shinier center with better amenities has barely nudged attendance above where it was in the waning days of the old center. In fact, bookings through 2015 are pitifully low. Will a 500 room hotel change these projections? We can only wait and see.
Clearly, the arguments about what happened to the private interest, the fact that subsiding new hotel rooms only opens the door for more subsidies later, and the disadvantage a subsidy will have for other established hotels are being pushed aside. The state has stepped in and its assistance is viewed as sufficient to convince the developer that construction costs or the rate of return just don’t matter—all that does is securing the ever-so-important magic number of hotel rooms, a factor so important that planners did not bother to push for its inclusion when the center was being drawn up.
Pittsburgh is in fierce competition in the convention market (Philly is expanding its center with help from gaming money) and a shinier center with better amenities has barely nudged attendance above where it was in the waning days of the old center. In fact, bookings through 2015 are pitifully low. Will a 500 room hotel change these projections? We can only wait and see.
