In the case of second-tier gaming spots—destinations and individual properties alike—the "if you build it, they will come" mantra has not always proved true. There is stiff competition out there, both from first-tier gaming meccas like Las Vegas, and even from non-gaming venues that provide alternative appeal.
But now, several second-tier destinations that host gaming are sweetening the pot by taking what is normally the role of city tourism organizations into their own hands: They are building and operating convention centers. Taking a page out of Vegas' playbook, where several individual properties in recent years have opened convention halls that they now run a number of independent facilities around the country are getting set to trump their competition as they plan big convention centers or have recently opened such facilities. And at least one gaming city, Detroit, is considering either expanding its existing convention
A NEW GAME
"Casino hotels are realizing that they can make a lot of money by offering convention centers or ancillary services to groups," says Jon Kaatz, partner-in-charge of convention services at Minneapolis-based Conventions, Sports and Leisure International. "Previously, we were seeing discounting on rooms so that the hotels could get the gaming revenue. But now, if these properties have other things to offer, they're collecting $185 to $220 room rates as well as ancillary revenues, like food and beverage spend."
Adds Larry Alexander, president and CEO of the Detroit Metro Convention & Visitors Bureau, "If a private developer steps forward, there's no question that having a combined hotel, casino, and convention center would give us a top-caliber, new experience to offer that would attract attention."
The city has a lot of competition throughout the Midwest, Alexander admits, but "we're a very affordable destination and the added convention space would be another valuable piece of the puzzle."
Foxwoods Resort Casino, in Mashantucket, CT will break ground this summer on a new $700-million resort that will include a 145,000-square-foot expansion of the property's function space and Casino Windsor, in Windsor, Canada, just announced plans to add 100,000 square feet of meeting space.
In Detroit, Windsor's close American neighbor, casinos have expressed interest in opening a convention facility but, if that doesn't pan out, the city is mulling an expansion of its Cobo Conference & Exhibition Center. And Turning Stone Resort and Casino completed an expansion last December.
At Foxwoods, where a new golf resort slated to open in May was already under construction, the newly announced resort will include a 50,000-square-foot ballroom and a 5,000-seat theater, which will have a 50,000-square-foot floor for trade shows. The new project, slated for completion by 2008, will also have breakout space and a junior ballroom totaling 30,000 square feet, a 15,000-square-foot pre-function area, an 825-room hotel and a new 21,000-square-foot spa. Four restaurants and retail stores, as well as additional casino space, are part of the project too.
DOUBLING DOWN
With the planned event space, says Joan Esneault, Foxwoods' executive director of resort sales, "we'll be able to more than double the capacity of our group business. I'll be able to add 500 to 600 booths to the 200 to 300 I can fit into our trade shows now. Many clients have called and said we aren't big enough. We want to tap more into their markets."
For customer Jim Saia, Andover, MA-based senior director of independent sales, east coast, of C&S Wholesale Grocers Inc., the expansion is welcome news.
"We're Foxwoods' second largest show and we're busting at the seams. We could probably expand by another 30 booths," he said. "As soon as the space is built, I'm sure we'll expand."
Windsor, a spot that Detroit-based groups sometimes visit, is about to completely change its competitive position. Casino Windsor, a privately operated facility owned by government interests, would be bolstered in 2007 by a 400-room hotel, the new convention space — including a 5,000-seat auditorium — and renovations to the existing facility that will revamp the property's public spaces.
"We had been the fifth largest convention center in the Ontario province, now we'll be the second largest," says Gordon Orr, managing director of the Convention & Visitors Bureau of Windsor, Essex County & Peel Island. "For the first time, we'll be able to host multiple conventions simultaneously. This also will allow us to host international events and large national conferences."
Detroit officials, who've been considering upgrading their convention facilities for several years now, are open to whatever it takes to get the job done. "Our charge is to figure out how Detroit can secure a world class convention center, and there's a consensus that private investment is desired," says Jim Townsend, executive director of the Tourism Economic Development Council and member of a task force studying convention center enhancement.
"A number of casino investors have, over time, been in discussion with city officials about building a convention center. If there's a public/private partnership and the private entity is the majority partner, it's a much easier pill for the region to swallow," he said.
Involving private interests in convention center development works well, says analyst David O'Neal, chairman of Conventional Wisdom Corp. in Orlando.
"Local governments are showing intelligence in working with the private sector because convention centers need a headquarters hotel, dining, retail or other amenities to be successful."
Private entity Turning Stone, in Verona, New York, expanded on its own last year when it opened the Event Center, a facility with almost 26,000 square feet of meeting space as well as an exhibit floor of more than 29,000 square feet. The new building now accounts for more than half of the property's total function space.
"Now, we can offer meeting and exhibit space to the same organization, instead of just providing one or the other," says Elaine Jackson, director of sales. "Before, our market was just central New York but now we compete with the Mid-Atlantic and all of the Northeast, including Atlantic City, as well as Las Vegas."
Scott Jackson (no relation to Elaine), director of education at the Albany-based New York State Health Facilities Association, which is required to have its meetings in New York, says Turning Stone's expansion changed his options considerably. "Before, there really wasn't a gaming destination with meeting space," he says. NYSHFA, which will have its annual convention at Turning Stone for the first time, has gone to upstate resorts in years past such as The Sagamore and Lake Placid. "This time," Jackson says, "I'm hoping the gaming is a hook."
SIDEBAR
Private Property Pros
The private convention center business is a rousing success in Las Vegas. Even its competition says so.
"It gets hotel rooms occupied and fills our restaurants," says Chris Meyer, director of convention center sales at the Las Vegas Convention and Visitors Authority, which sells space at the Las Vegas Convention Center. "It has helped us tremendously because it gives show producers the space and dates they need that aren't available at the city's convention center."
Mandalay Bay, the Venetian, and the Rio All-Suite Hotel & Casino are just some examples of Vegas properties that have their own convention halls. Operators of these private facilities are thrilled to offer meeting and convention organizers more than a run-of-the-mill gaming facility.
"We can now accommodate almost any market segment, from a meeting of 10 people to a trade show for 10,000," says Danielle Babilino, vice president of hotel sales at Mandalay Bay. "That allows us to do business with more groups. It also helps us with forecasting because we can build a base of business with associations and trade shows, and then fill in with corporations and small meeting business."
There's much to be said for the captive-audience effect gained by having the hotel, entertainment, and meeting space all in one spot, says David Ingemie, president of SnowSports Industries America, a snow sports association in McLean, VA that met at the Las Vegas Convention Center every year since the 1970s until Mandalay Bay opened three years ago.
"It costs a lot more but it's worthwhile to have our group stay contained because that gives us the chance to influence our attendees 24 hours a day. When we were at the convention center, everyone jumped in a car at 5 o'clock and said 'See you later.' "
By contrast, he says, "now when we walk down the building corridor to a bar or restaurant, we can have sales meetings, exhibitor meetings, or even meetings of attendees," said Ingemie. "There's no loss of people like there might be if they were saying, 'OK, meet you at the Marriott at 6 p.m.,' and 10 out of 20 people show up. Mandalay Bay has an advantage on that front."
This is a successful set-up for many groups, says convention center consultant Jon Kaatz, partner-in-charge of convention services at Minneapolis-based Conventions, Sports and Leisure International. "There's a market for these self-contained properties. Some people say they're claustrophobic and they would rather stay in an exciting downtown area, but others find having the control over attendees' time perfect for conducting business."