CVB Seeks Center Reality Check

February 27, 2004
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GRAND RAPIDS — The Convention and Visitors Bureau soon will meet with an industry consultant based in Georgia to set the bureau’s long-term sales goals.

Bureau President Steve Wilson told the Convention and Arena Authority Operations Committee that the CVB has hired Strategic Advisory Group LLC (SAG) of Duluth, Ga., to help establish realistic revenue expectations for DeVos Place, the city’s new convention center.

“We need to set a reality gauge on the economic impact as listed in the Deloitte & Touche report,” said Wilson.

That report, commissioned by the Grand Action Committee and released by Deloitte & Touche in June 1997, said an expansion would “nearly double” the economic impact of the Grand Center in five years.

In the report, Deloitte & Touche said the Grand Center was worth roughly $46 million in direct expenditures. If the projected revenue that DeVos Place would generate were added to that figure, it would mean that the local convention industry would have an economic impact for the metro area of $91.3 million in five years.

But that number may be more than a bit overstated.

“We need to manage expectations because there really isn’t a huge amount of new business coming here,” said Wilson.

It’s not that the CVB is finding DeVos Place to be a tough sell. The bureau’s sales staff, led by George Helmstead, booked 133 conventions last year and topped its sales goal by 12 percent. But the bureau reported that those conventions would be worth about $27 million in direct expenditures.

At least 27 groups will meet at DeVos Place this year and those gatherings have been estimated to be worth $10.5 million.

Ninety-five conventions and trade shows are booked through March 2010, while another 62 are tentative for that period. The signed-on-the-dotted-line conventions are estimated to be worth about $37 million to the local economy, while the maybes are valued at $20 million. Both are lucrative figures, but fall far short of the 1997 forecast.

The report also noted that the city offered the lowest ratio of prime exhibit space to hotel rooms in a comparison of 13 regional markets, and that Grand Rapids tied for seventh place among those cities in number of hotel rooms. Perhaps the city needs more hotel rooms in order for DeVos Place to reach the report’s projected economic impact.

SAG has been in business since 1998 and consults for both the private and public sectors. One of the firm’s core service areas is convention center feasibility studies, which includes industry and economic trends, assessing current facilities and economic impact analysis.

SAG conducted the feasibility study for the possible expansion of Cobo Hall and Convention Center in Detroit. The study, done in 2000, concluded that there wasn’t enough market support for expanding Cobo or for a new 1,200-room convention center hotel to be built downtown.           

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