Kansas City Considers Convention Hotel To Power Demand

A proposed convention hotel and the new Power and Light District should help Kansas City, Mo., which has seen its share of highs and lows since the heyday of its corporate and association meeting scene, when it was consistently in the country's top 10 meeting destinations and hosted the 1976 Republican National Convention, through the current leaner times.

"While many groups still come to Kansas City, overall demand for meetings is down this year, notably over the last three months. It had been pegged as a poor year and we're in a stall right now. During the last six years, 2009 was the one that was a little soft," said Kansas City Convention & Visitors Association president Rick Hughes. "2010 should be a banner year, with 2011 a good one and 2012 a bit soft also; but our bookings are ahead of pace, our future is well ahead of pace, based on our projected averages, and overall we're tracking above our historical average. And, of course, geography doesn't change; we're still in the middle of the country, accessible from both coasts."

People are being a bit tentative now, he said. "Many are holding out on their meeting plans for 2009, even though there are deals here because our hotel negotiating stacks up pretty well for groups, but the bottom line is people have to feel good about the economy," Hughes said.

A bit of news that could help lure planners to Kansas City is a proposed new $350 million convention center hotel, still in its early stages and controversial locally, Hughes said, because of the state of today's economy.

"This is big: a 33 percent boost to rooms downtown, where density was missing, but there are 31,000 hotel rooms in the metro area. The impact on meetings would be enormous, but as everyone knows, how do you get the thing financed? A steering committee that is meeting soon will set the entire process more in motion. We should be at the bond table at the end of 2010 and breaking ground in the fall of 2013," he said.

However, he added, "we won't do it unless there is net impact and can't do it if there is undue risk to the city."

The new hotel would be part of a downtown Kansas City renaissance, along with the Power and Light District, a new $850 million, eight-block dining and entertainment venue with residences, that opened in the spring of 2008, within walking distance of hotels and the city's convention center.

"Last year was one of our best years to date," said Tricia Clement, manager of the events division of destination management firm Agenda: Kansas City. "This year has been very slow with some cancellations, and our venue reps are being a lot more flexible about dates and price."

Agenda, she said, works with a mix of local, national and international groups, who are making last-minute plans this year and opting to hold bare-bones events without a lot of extras.

"Things are looking better for 2010,"Clement said. "We're working on multiple proposals because groups are actually making calls and inquiries now for next year, as opposed to holding off as they have in 2009, so there is a lot more potential for 2010 to be better but not as good as 2008."

The negotiating climate between corporation and association groups and Kansas City's hotels remains conciliatory, according to Janice McClain, owner of Kansas City-based meetings management company J.M. McClain and Associates.

"My clients, who are agricultural and pharmaceutical groups of 15 to 500 attendees, prefer to keep their relationship with the hotels intact by not taking advantage of them now," McClain said. "They don't want to turn into monsters by gouging during these leaner times. Yes, we want to see a good rate, but don't want to see the level of service suffer."

"Meeting demand is down," McClain said. "I work with a lot of groups that, while their business climate is good, their subsidiaries are suffering, and that's affecting demand. As a result, bookings are more short-term, from 45 days out to no more than six months to eight months right now," she said.

"For the first time, we're including minimum staffing clauses into our contracts. My groups could demand $250 a night vs. $350, but at banquets, for example, they don't want to see a reduction in food and beverage service. It's very much a win-win situation," McClain said.

She said her hotel counterparts are holding their own, not "dying on the vine," and expect the third quarter of 2009 to be strong.

"I expect the economy to turn around slowly, more like a cruise ship versus a speedboat," said McClain, who in April booked a $1.5 million Kansas City meeting for January 2010. "That's huge," she said.

Norma Cordes, president of Kansas City-based Blue Ribbon Arrangements and Tours, said "2009 is down 25 to 30 percent, so we've had to cut our profit margins quite a bit to stay in the ball game, and with demand down the hotels are hungry and willing to negotiate."

Group size is smaller overall, Cordes said, but there have been "very few cancellations and they've been mostly from our smaller clients, with none from associations."

Cordes said she expects a bounce back in 2010, too, as more groups—after seeing Kansas City's new Power and Light District, the $24 million College Basketball Experience, which opened in October 2007, and its new museums—book meetings and events.

Originally published July 27, 2009