Convention Equilibrium Still Off
We wrote a decade ago about the new convention center and where it stood in terms of national context: as Pittsburgh was expanding so too were many other cities. When the dust settled convention center square footage was up 41% among the top fifty markets. Convention demand, on the other hand, fell rapidly and was up less than 2% per year.
Clearly those trends have not abated: a recent study by the Manhattan Institute found that "In 2010, conventions and meetings drew just 86 million attendees, down from 126 million ten years earlier. Meantime, available convention space has steadily increased to 70 million square feet, up from 40 million 20 years ago." Much of the expansion-then and now-is fueled by feasibility studies and wildly optimistic projections of economic activity, nearly always accompanied by subsidies of some sort.
Those subsidies extend to convention hotels as well, as evidenced by the money the gaming bill set aside (which has since been redirected due to lack of interest) and the fact that cities like Boston, Dallas, and Baltimore have gone full bore on using public money to construct convention center hotels. There is no guarantee that convention boosters won’t come back to the public trough at some point in the future, whether it be from the pot of gaming money or some other source, saying that they really have a committed partner and need a subsidy to make the convention center hotel a reality.