While the economy is suffering now, this is the perfect time to start talking about the benefits of expanding the Boston Convention & Exhibition Center. Construction costs are down, construction unemployment is up, and this project – if successful – could be a huge boost to the local economy, with an estimated 5,000 construction jobs supported by the project. That doesn’t include the 1,200 new hospitality jobs or the creation of 3,500 to 4,500 new spinoff jobs the project would support.
More importantly, the MCCA has generated $2.4 billion in economic impact in the past five years, and we want to add to that success. We could decide not to expand, but having reached our peak capacity, our gains would be slow. And it’s not about making a quick buck. Our success helps nurture long-term economic development in the life science, technology and education industries.
The BCEC and the John B. Hynes Veterans Memorial Convention Center have generated $2.4 billion in economic impact for the city and the Commonwealth over the past five years. The BCEC has also been named Convention Center of the Year by a leading trade publication, and the combined strengths of the Hynes and BCEC have kept Boston in the Top 10 convention cities in the nation. We currently rank No. 9 in the nation based on the number of events we host.
However, we have reached a point where we are unable to meet the needs of some major shows because of our limited size. A recent study found that the BCEC will be essentially sold-out in 2011, reaching maximum practical occupancy each year into the foreseeable future.
Major shows that will generate large economic impact want more space, more dates and more hotel rooms. We want to be able to bring them and their economic impact to Boston. With our proposed expansion, combined with the goals of our T5 initiative, we can do that.
The BCEC and the Hynes book events far into the future, going out as far as 19 years. But there are limits on what we can book. At its current size, the BCEC can’t host two major events in the building at the same time. Why? We only have one major ballroom and most big events want to be able to have access to a ballroom. The lack of a second ballroom is a deal breaker for most shows.
If we expand, as well as add a second ballroom, the BCEC could book two major shows simultaneously, doubling the available dates and the economic impact we currently produce.
Plans for a new headquarters hotel near the BCEC would also allow both the BCEC and Hynes to book two large shows simultaneously. Currently, the city doesn’t have enough hotel rooms to do this.
When the construction of a new BCEC was being planned, it was agreed that the building needed to be highly adaptable and that its growth would be scaled based on market demand. There was also little public appetite for a huge exhibit hall at that time. Now, with five years of success under our belts, and with times changing, market demand tells us we need to grow, adding another ballroom and more hotel rooms to allow us to host two simultaneous events. If successful, Boston and the region will benefit through a significant increase in economic impact. This effort also hopes to drive long-term economic development in key sectors, including life science, education and technology.
There are not enough mid-priced hotel rooms in Boston to allow us to have two shows at both the BCEC and Hynes. In addition, some events have spent as much as $700,000 to bus attendees to the BCEC from outlying hotels. A number of shows have told us they would love to come to Boston, but can’t because there are not enough mid-priced hotel rooms.
While the Hynes has 6,000 hotel rooms within a half mile of its front door, the BCEC only has 1,700 rooms within a half mile. New York City’s Jacob K. Javits Convention Center, by comparison, has 29,000 rooms within a half mile of its door.
There is a large demand for a bigger BCEC. One of Massachusetts most important shows, Bio International, came to Boston in 2007 and drew in a record 22,366 attendees, a 15 percent increase from the previous year. But Bio wasn’t just a show. The event played a major role in raising Massachusetts’ profile as a leader in the biotech industry around the world.
But as this show continues to grow, it has become too big for Boston. Organizers have said they would like to put Boston in the permanent rotation of cities, but could only bring Bio back to Boston in 2012 by using the Hynes and the World Trade Center. Other major events have told us if they would book with us if the BCEC expands.
In 2009 alone, the MCCA lost 72 future shows over concerns about space, dates or hotel rates. Those shows could have created $336 million in economic impact and $21 million total tax benefits.
If expansion takes place, we expect the number of large tradeshows to increase. Right now, out of the top 200 shows in the nation, 120 do not fit in the BCEC. If we expand, that number will shrink significantly down to 43.
Marketing surveys show that Boston is one of the nation’s most desirable destinations for convention and meeting planners.
There is also a big shift happening in the convention industry because of the economy. Cities like Orlando and Las Vegas, known as “resort destinations,” are seeing dramatic drops in bookings. Instead, event organizers are moving their shows out of these cities and into other cities like Boston. Las Vegas saw 402 conventions canceled between October 2008 and March 2009, resulting in a loss of $166 million to the local economy. Orlando had 114 meetings cancelled as of late April 2009 resulting in $26 million loss. In Boston, we had one cancelation – from a national mortgage brokers association – but that was because of the real estate market collapse, not concerns over Boston.
When it comes to competing with the likes of Orlando and Las Vegas, we give. We’ll never be a city that hosts the volume of conventions and meetings that they do. But our niche is more specialized, with 31 percent of our 2008 shows being medical, 15 percent technology-based and 15 percent education-based. These are a perfect match to the Commonwealths’ key economic sectors. We did not start our T5 initiative to become No. 1, but we do want to continue to thrive.
We are confident in the future of the meetings and convention industry. We have events booked for our facilities that stretch to 2028 and continuing demand for more hotel rooms and exhibition space is proof that the convention industry is not in a decline. We can do a lot more through the phone or computer than we ever could, but there is no replacement for bringing people together to meet, do business and explore a new city. Technology is not going to make our business dissolve. Instead, it is going to help enhance one’s experience at a convention. Through Twitter, Facebook and other social media, people are connecting at events and sharing their thoughts throughout a conference. This year, Web Ex, which provides software for online meetings, desktop sharing, web and video conferencing, and Cisco Systems, a world leader in computer networking, both brought their shows to the BCEC.
We do not know how much it is going to cost right now. One of the reasons we created the T5 initiative was to start an open dialogue about cost, benefits, drawbacks and other major questions. As the public dialogue continues, we will develop a better understanding of the exact costs, as well as the benefits.
Right now, while there is no specific plan, there are options. One is to expand the BCEC to include more exhibit hall space, an additional ballroom, an auditorium and a large, mid-priced hotel near the facility. We are waiting to see what the public thinks before any final decisions are made.
The T5 initiative is not just about expanding. With this, we aim to become the No. 1 North American destination for international conventions and meetings. We also want to help spur development in the South Boston Waterfront, our neighborhood, as well as advocate for better transit connections citywide to make getting around Boston both easy and green.
Right now, there is no completion or start date. Much work has to be done before that can be decided. Now is the time for public discussion about the possibility of the expansion. We’re scheduling the public dialogue about possible expansion to take between 12 and 18 months. Consultants have told us that if we decide to move forward, we’re looking at a range of 2-12 years for construction.
We are not sure how this project will be funded. We firmly believe that increasing the number of events coming to Boston will increase business to all city hotels, restaurants and other venues. We believe that any support from these industries will be repaid through the increased business created by what we are proposing with the T5 initiative.
In March 1997, Johnson Consulting projected 794,000 hotel rooms associated with BCEC business in its 11th year of operations, based on a 4-hall, 600,000 gross-square-foot exhibit hall. However, the BCEC was constructed with a 3-hall, 516,000 gross-square-foot exhibit hall. This impacted the amount of attendees and in turn impacted the number of hotel room nights that could be created.
Despite our smaller size, the MCCA projects it will create about 600,000 hotel room nights annually by its 10th year of operations, despite the city’s current hotel inventory constraints.
As to why we need a new hotel, a survey of event planners found that 93 percent said they required an adjacent or attached headquarters hotel with 1,000 rooms or more to bring new business to Boston. Plus, if we decide to expand, there will be a natural need for more hotel rooms adjacent to the BCEC.
