T5 Presentation


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  • I want to introduce a new strategic mission for our organization
    Boston’s position as a leading meetings and convention destination is strong, but to remain competitive much work is required.
    Defined as TOP 5
    What I mean by Top 5 is:
  • We know the story of the past four plus years:
    Boston hosted its 1 millionth BCEC-generated hotel room night in 2008
    BCEC events generated more than $522 million in 2008, a 9 percent increase over 2007
    BCEC has generated an estimated $1.7 billion in economic impact for the Commonwealth in just four years
    BCEC has made TSW’s Top 10 list for 4 years
    Named 2007 Convention Center of the Year
    Key events support Massachusetts’ economic development strategies
    Both the BCEC and the Hynes are consistent economic impact generators, but if we sit here “fat, dumb, & happy” will we continue to succeed? Will we be listed in the top 10?
    What opportunities are we missing? What are the Top 5 cities getting that we aren’t?
  • Top 5 is defined as increasing market share and enhancing economic impact as a result.
    Defined by Trade Show Week as “The number of meetings, conventions and tradeshows utilizing 5,000 or more square feet of exhibit space hosted by a destination.”
  • Achieving this shared vision requires not only BCEC Master Plan Expansion, but a shared and strategic approach to substantially increase Boston’s market share while maximizing the economic impact to the City of Boston and the Commonwealth.
    $936 million in investment by the Commonwealth [$850 million initial investment + $86 million operating and capital investment from 2004 – 2008] has produced over $1.7 billion in economic impact in just four years.
    We will demonstrate in this presentation that additional opportunity exists and that Boston and the MCCA is well suited to seize a large share of it.
    The Commonwealth has made significant investment in these facilities and the convention area to date
    If we don’t choose to capture these dollars other cities will
    Our responsibility is to be ready to take advantage of these opportunities and to do that we need to start now
  • Massachusetts’s Bermuda Triangle
  • Cost Constraints:
    Transportation & shuttling costs for the BCEC.
    In some cases the transportation cost can exceed the building rental costs
    The destination may be able to survive these costs for a first or second visit, but eventually planners will consider it prohibitive
    Boston room rates are double the national average
    National Average: $100.54
    Boston: $211.40 (Source: Smith Travel Research)
    Current hotel RFP conducting a market demand analysis.
  • What’s Coming up the Pipeline:
    2,200 rooms under development
    Likely to be small and 4-5 star based on high development costs
    New construction is expected to proceed at a slow pace
    These proposed new hotels do not meet our current requirements
    Expansion will require additional hotels
    With expansion we need 2,000 more rooms for a total of 6,000
    Part of that development needs to be an additional 1,000 room headquarters hotel
    Mid priced inventory is necessary elsewhere in Boston
    Hotel Financing Options:
    Public – Private:Indianapolis, Washington D.C. *, Los Angeles, San
    Diego, Boston
    Tax Exempt Financing:Denver, Houston, Austin, Baltimore, Sacramento,
    * = In Planning Stages
    Current MCCA RFP: “on hotel financing and market demand” underway.
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  • T5 Presentation

    1. 1. For Policy Discussion Purposes Only DRAFT James E. Rooney Executive Director Massachusetts Convention Center Authority Massachusetts Office of Travel and Tourism T5 Presentation
    2. 2. For Policy Discussion Purposes Only DRAFT MCCA Overview Economic Impact:Economic Impact: (in millions)(in millions) FY 2009FY 2009 $525.4$525.4 FY 2008FY 2008 $586.9$586.9 FY 2007FY 2007 $515.0$515.0 FY 2006FY 2006 $439.9$439.9 FY 2005FY 2005 $337.4$337.4 TotalTotal $2.4 Billion$2.4 Billion Facilities:Facilities:  Boston Convention & Exhibition CenterBoston Convention & Exhibition Center  Hynes Convention CenterHynes Convention Center  Boston Common GarageBoston Common Garage  MassMutual CenterMassMutual Center The Massachusetts Convention Center Authority's (MCCA) mission is to generate significant regional economic activity by attracting conventions, tradeshows, and other events to its world-class facilities while maximizing the investment return for the residents and businesses in the Commonwealth of Massachusetts. MCCA MissionMCCA Mission
    3. 3. For Policy Discussion Purposes Only DRAFT MCCA: Demonstrated Success Over the last five years the BCEC and the Hynes have more than doubled their return on investments:  Initial BCEC investment $850.0 Million  Operating & capital investments $118.7 Million  Tax Benefits $129.3 Million  Economic Impact $ 2.4 Billion Demonstrated Success (FY2005 – 2009) Key Event Indicators BCEC HYNES Events 634 609 Room Nights 1,349,602 1,280,705 Attendees 1,838,449 1,736,878
    4. 4. For Policy Discussion Purposes Only DRAFT Demonstrated Success Over the past five years, the BCEC and the Hynes have generated over $2.4$2.4 billionbillion in economic impact (2004-2009). More conventions are coming to Boston in next three yearsnext three years than at any time in history (2010-2012). To t al Eco n o m ic Im p act in Massach u set t s $0 $100 $200 $300 $400 $500 $600 $700 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 Proj. FY11 Proj. FY12 Proj. FY13 Proj. $inMillions Hynes BCEC
    5. 5. For Policy Discussion Purposes Only DRAFT  Boston will become a “Top 5” destination for conventions and meetings, substantially increasing its market share among North American competitors and enhancing the economic benefit to the City of Boston and the Commonwealth and be identified as the #1 destination in North America for international corporations and associations to hold meetings, conferences and exhibitions. Statement of Purpose
    6. 6. For Policy Discussion Purposes Only DRAFT A Shared Vision for a Top 5 Boston  Have Boston be continually recognized as the “BEST” convention and meetings destination in North America  Make Boston a consistent “TOP 5” destination among North American convention and meetings cities  Make Boston the leading international meetings destination in the US  Build on the direct economic benefit we currently create here at the BCEC  Host key events that support Massachusetts’ core industries  Generate 5,000 construction related jobs  Create 1,200 new hospitality and associated positions (CSL International Estimate)  Cause creation of 3,500 – 4,500 new spinoff jobs in associated Massachusetts businesses  Support workforce development across the destination A campaign to:
    7. 7. For Policy Discussion Purposes Only DRAFT Leading Cities Rank City Total Number of Shows 1 Las Vegas 232 2 Chicago 118 3 New York 116 (tie) 4 Toronto 116 (tie) 5 Orlando 100 6 Atlanta 88 7 San Diego 80 8 Denver 78 9 Boston 69 10 New Orleans 66 Source: 2009 Tradeshow Week
    8. 8. For Policy Discussion Purposes Only DRAFT How we will get there: Market Share MCCA Mission Economic Impact 1 BCEC Strategic Development Plan 8 Destination Hospitality Culture & Brand 2 Hotel Rooms 3 South Boston & the Waterfront 4 Mobility Infrastructure 5 Boston Common Garage 6 Hynes as a Congress Center 7 International Market
    9. 9. For Policy Discussion Purposes Only DRAFT Principles and ObjectivesPrinciples and Objectives Components of potential BCEC growth (hotel, ballroom, exhibit hall, auditorium, and other uses) shall be:  Massed to respect existing neighborhoods and BCEC building  Designed based on feedback and survey data from meeting planner community to meet needs of users  Sized to match projected market and program (including flexibility for expansion) and functionality  Separate to allow phasing  Planned as a “campus” rather than a “mega-building”  Constructible and cost feasible  Sustainable design (LEED) and energy efficient  Continued focus on technological innovation & capabilities BCEC Strategic Development Plan
    10. 10. For Policy Discussion Purposes Only DRAFTExpansion Analysis Full-build scenario with BRA vision for waterfront 1. Existing BCEC 2. Proposed Hotel Sites 3. New Ballroom 4. New Exhibit Halls 5. New Lobby and Meeting Rooms 6. Auditorium 7. Park and Event Lawn 8. Westin Boston Waterfront Hotel
    11. 11. For Policy Discussion Purposes Only DRAFT Potential Buildout Option
    12. 12. For Policy Discussion Purposes Only DRAFT Destination Challenges Destination ChallengesDestination Challenges  Hotel Room Supply  Transportation / Mobility  Inherent Cost
    13. 13. For Policy Discussion Purposes Only DRAFT Opportunities Lost Over the past 3 years, a total of 143 shows were lost due to Space, Dates or Rates at BCEC (Event dates ranged from 2007 – 2029)  Total Room Nights Lost: 2.07 M  Total Economic Impact Lost: $1.50 B  Total Tax Benefits Lost: $92.3 M  Over the same 3 years, 228 shows were lost at the Hynes, of which 69 shows were due to conflicts with BCEC business. Data from Jan 1, 2007 – Feb 2, 2010
    14. 14. For Policy Discussion Purposes Only DRAFT 14 Cost Constraints Am Society for Therapeutic Radiology & Oncology (ASTRO)  September 16-26, 2008  Attendance:     12,000 persons  Room Nights:    34,200 (as of cut-off)  Shuttle cost:    $750K Am College of Rheumatology  November 5-11, 2007  Attendance:     14,000 persons  Room Nights:   30,500  Shuttle cost:    Between $500-$550K   International Association of Chiefs of Police  October 14-18, 2006  Attendance:     17,000 persons  Room Nights:   28,900  Shuttle cost:    $506K Lack of hotels near BCEC results in significant transportation cost to our customers Heart Rhythm Society  May 17-20, 2006  Attendance:     14,000 persons  Room Nights:   22,900  Shuttle cost:    $214K American Association of Orthodontists  May 1-5, 2009  Attendance:    20,000  Room Nights:  23,000 (approximate)  Shuttle cost:  $245K (approximate)  Biotechnology Industry Organization  May 7-9, 2007  Attendance:    20,000  Room Nights:  31,100 (approximate)  Shuttle cost:  >$1million 
    15. 15. For Policy Discussion Purposes Only DRAFT 15 1,100 1,700 1,700 1,700 6,000 6,100 6,600 6,850 7,600 8,300 8,400 8,200 8,600 10,800 9,350 19,100 16,600 0 5,000 10,000 15,000 20,000 25,000 Chicago, IL Los Angeles, CA Boston, MA - BCEC New York, NY Boston, MA - Hynes Baltimore, MD Denver, CO Miami Beach, FL Washington, DC San Diego, CA Atlanta, GA Philadelphia, PA New Orleans, LA San Antonio, TX Orlando, FL Las Vegas, NV San Francisco, CA Number of Rooms Average = 7,570 Rooms Median = 7,600 Rooms Lack of hotel inventory is the number one constraint to BCEC Convention Business DRAFT COPY For Policy Discussion Only * Chicago has dedicated transportation infrastructure from downtown hotels to McCormick Place Comparison of Hotel Rooms Within ½ Mile of the Convention Center
    16. 16. For Policy Discussion Purposes Only DRAFT Boston Hotel Development Boston Convention and Exhibition Center ½ Mile Radius 1 – Waterside Crossing (300) 2 – Waterside Place (300) 3 – Congress Street Hotel (505) 4A – Seaport Square (300) 4B – Seaport Square (400) 5 – Fan Pier (175) 6 – Pier Four (200-250) 1 5 6 2 3 4A Existing Hotels – 0 hotels with more than 1,000 rooms. – 1 hotel with 500 to 999 rooms. – 2 hotels with 100 to 499 rooms. 4B + 1,700 existing + 2,300 to meet current needs + 2,000 to meet expansion needs = 6,000 total rooms Still does not meet hotel demand
    17. 17. For Policy Discussion Purposes Only DRAFTHotel Rooms Within ½ Mile of San Diego & Orlando convention centers San Diego Convention Center 2 1 4 3 57 6 89 ½ Mile Radius San Diego Convention Center – 3 hotels with more than 1,000 rooms. – 1 hotels with 500 to 999 rooms. – 5 hotels with 100 to 499 rooms. ½ Mile Radius 5 6 Orange County Convention Center 12 34 7 11 8 910 12 13 14 15 17 16 – 4 hotels with more than 1,000 rooms. – 1 hotel with 500 to 999 rooms. – 12 hotels with 100 to 499 rooms. Orange County Convention Center
    18. 18. For Policy Discussion Purposes Only DRAFT International Shows in Boston Boston ranked top destinationBoston ranked top destination in the United Statesin the United States for international association meetings, yet nofor international association meetings, yet no single U.S. city ranks in top 20 (Boston is #45)single U.S. city ranks in top 20 (Boston is #45) Source: International Congress & Convention Association, country & city rankings (2008)  Broaden international exhibitor and attendee base by enhancing international appeal  Capacity exists to strengthen market position  Expand destination sales and marketing  Emphasize European feel and proximity  Direct flights: at peak there are 160 direct flights from Europe to Logan weekly; growth with Grand China Airlines  Strengthen hospitality culture across destination to be more welcoming to international visitors
    19. 19. For Policy Discussion Purposes Only DRAFT Next Steps  Public Outreach and Dialogue  The Convention Partnership: 27-member group to steward public study and analysis of feasibility of BCEC expansion – Membership: Appointments by Governor, Mayor, Senate President, Speaker of the House; Includes South Boston Elected Officials, South Boston Community Development Foundation, Hotels and Tourism Groups, Watchdog Organizations, MCCA Board, Labor, Massport – Analyze need for expansion, state of industry, potential expansion program, financing options, impact of expansion – Conduct public meetings as needed – Files a report to Governor, Mayor, Speaker and Senate President by December 31, 2010