Economic Development and Travel & Tourism

DeVos Place more pink than red

Hotel occupancy and room rates continue to rise from conventions.

November 10, 2012
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When the fiscal year’s first quarter ended, there was an unusual role reversal among the buildings the Convention and Arena Authority operates. This time DeVos Place was performing better than Van Andel Arena; the opposite has usually held true for the past eight years or so.

At the three-month mark, the convention center was less than $22,000 in the red. A year ago, its financial color was more crimson than red: The building had lost nearly $490,000 by the end of September 2011.

The striking turnaround is partly due to a strong September 2012 when DeVos Place recorded a surplus of $85,000 from 51 events, a dozen more than it hosted the previous year. In his report to the CAA, SMG Director of Finance Chris Machuta called the July-to-September period the “best first quarter with a very strong September.”

Machuta said good starts to the Grand Rapids Symphony and Broadway Grand Rapids seasons, along with a Midwest art show held in the building, helped to punch up direct-event income to $273,000 for the month. A year ago, that figure was less than half that, at just $125,300.

The first quarter for the arena wasn’t nearly as good. The building lost $268,000 over the three months, compared to the $213,000 it lost last year. But traffic at the arena is usually slow during July and August, and this year wasn’t any different. Only five events were held there during those two months.

Still, the arena dropped $72,500 for September from eight events. Machuta said sales for a concert from the Canadian rock group Rush were less than expected, which kept direct-event income much below the projected figure for the month.

However, SMG Regional General Manager Rich MacKeigan said there was some fiscal light at the end of the tunnel, especially for three recent concerts.

“We seem to be selling tickets earlier these days,” he said.

MacKeigan explained that early sales ease a promoter’s financial concerns about a show and also gives them confidence to book a show in the building.

Experience Grand Rapids President Doug Small told the CAA the successful run local hotels have had for the past several years continued this year. According to Smith’s Travel Research, which tracks hotel occupancy, Small said the rate for the county’s hotels this year is 62.4 percent, a figure that matches the national rate. Four years ago, he said that local rate was just 50 percent and well behind the national rate of 61 percent.

“We will consume more convention room nights than ever before,” said Small of the 136,000 room nights delegates have booked. “It’s been a great convention year.”

Small also said room revenue to the hotels was up by 10.8 percent this year. Nationally, that figure was up by 7.5 percent. Experience GR Vice President of Sales George Helmstead said his crew booked 22 meetings for the convention center last month.

Small added that his organization was putting together a national ad campaign with Pure Michigan, the state’s tourism agency. As far as what the ad will highlight about Grand Rapids, Small said, “Pure Michigan has the final say on content.”

West Michigan Sports Commission Executive Director Mike Guswiler told the CAA his organization hopes to begin work on the Art Van Sports Complex yet this year and have eight baseball and softball fields ready for youth and amateur tournaments in 2014.

“We’re going to start moving some earth in 2012,” he said. “(But) much of the work will be done in 2013.”

Guswiler also said the search for a firm qualified to manage and market the complex would likely get underway soon. “We want to get someone on board as soon as possible because we want them to be part of the construction project,” he said.

Guswiler felt there is a market for what the complex will offer. He said teams are lined up and are looking for places to play, as those who have been in the sports-travel industry have told him a need exists for the type of complex WMSC is building.

“As I talk to people, they said there is no place like this,” he said. “We feel the demand out there is enough that we will create new business. Parents spend a lot of money on travel for baseball and softball. We’re also going to work within the community.”

Guswiler said WMSC will offer a baseball and softball program for kids living in the inner city, where playing fields are scarce.

“I think this is a great idea. I grew up playing baseball in an urban area,” said Floyd Wilson, a CAA board member.

“It’s been phenomenal what you’ve achieved in a short amount of time,” added CAA Chairman Steven Heacock.

Guswiler told board members the organization is just $1 million short of reaching its $7.8 million first-phase fundraising goal for the complex. He said the private sector has contributed $5 million thus far, and Art Van Furniture bought the complex’s naming rights for $1.8 million.

“As I look to the future, it looks very promising.”

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