Economic Development, Government, and Travel & Tourism

Area hotels are continuing strong run

Convention center posts its best-ever seven-month fiscal mark.

March 8, 2013
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Following on the heels of a record-breaking revenue year of $127 million for hotels in the county last year, Experience Grand Rapids President Doug Small reported the momentum carried over into the first month of the new year.

Small told members of the Convention and Arena Authority that hotel occupancy was up by 6 percent in January compared to the same month last year, and the average room rate for the month was the third highest nationwide among a group of comparative cities. He said only rates in Hartford, Conn., which gets a lot of corporate business, and in Pittsburgh were higher.

One explanation for that news came from a somewhat unlikely, or at least largely unconsidered, source.

“Concerts at the arena are a huge boost to our occupancy,” said Small.

So far this fiscal year, nine concerts were held at Van Andel Arena through January, and those shows brought the performers, their road crews and their fans to the hotels.

“I always knew there was a correlation between concert activity and the hotels. I didn’t know it was that much,” said SMG General Manager Rich MacKeigan, also CAA executive director.

At the seven-month mark of the fiscal year, the arena had a surplus of $525,000; concerts had recorded half of the building’s total event income. A year ago at the end of January, that surplus was $499,000.

But the big fiscal news belongs to DeVos Place.

Experience GR Executive Vice President George Helmstead said the building hosted 353 meetings in 2012, up from 311 in 2011, and six of those months belong to the convention center’s current fiscal year.

More than 243,000 delegates attended those meetings last year, a 40 percent attendance increase over 2011.

“Doug (Small) is cracking the whip, and we’ve got higher goals for this year,” joked Helmstead.

That performance helped the convention center finish its best seven-month financial performance in its nearly 10-year history. The building closed January with a deficit of just $8,884. In comparison, at the same time last year the building was $413,800 in the red.

SMG Director of Finance Chris Machuta said it wasn’t only that the building has hosted more meetings and conventions. He said the financial turnaround also was due to those clients using more areas of the building for their gatherings. In addition, he said, clients are spending more on ancillary services such as food, decorations and electrical services than five years ago when the recession shrunk many meeting budgets.

He added that the building is becoming more entrenched with regional and national conventions. Most of the convention center’s past business came from state groups.

Machuta said the remaining five months of the fiscal year looks fine for DeVos Place. He said the year could turn out to be the convention center’s best financial showing since it held its first meeting in December 2003.

The most startling outcome, of course, would be if the building ended the year in the black. If so, it would be a first.

“It’s the best seven months it’s ever had,” said Machuta of the July through January run. “I don’t foresee that we’ll get to the black, though.”

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