What would make Charlotte one of the nation’s top tourist destinations? An ocean, perhaps. Absent really dramatic sea-level rise, though, it may be an unreachable goal.
Our city has gotten itself swept up in a nationwide convention-business arms race: Cities building endlessly more elaborate convention centers, ever-larger hotels, and continuously sweeter incentive accounts. And they’re all chasing smaller slices of a shrinking pie.
It’s costing the city tens of millions of taxpayer dollars each year. Observer reporter Steve Harrison details today and later this week just how bad an investment the Charlotte Convention Center has been. His findings should be eye-opening for this community and suggest that city leaders need to think hard before throwing good money after bad.
• Conventions account for just 2.7 percent of all hotel rooms booked in Mecklenburg County. When the convention center was being planned, it was forecast to fill about 20 percent of all rooms sold.
• There is no evidence that the city makes its investment back by sparking economic activity. For every dollar taxpayers spend on the convention business, they may make as little as 35 cents back.
• The city and the Charlotte Regional Visitors Authority spent about $30 million in taxpayer money on the convention center last year. By comparison, the city spends $7.5 million a year on sidewalks and about that amount on building affordable housing.
The convention center is occupied just 35 percent of the time, compared with our peers’ average of 57 percent. The conventions the CRVA does recruit often have to be lured by generous financial incentives. And Harrison shows that the CRVA has a history of overstating the impact of conventions. Not infrequently, the group has embellished the number of attendees and the amount they spend.
Mecklenburg County residents are paying for most of this. Only part of the CRVA’s budget comes from a hotel-motel tax paid largely by visitors; the majority comes from a 1 percent prepared foods tax that we all pay when we eat at restaurants.
Now the pressure is on Charlotte to pour even more money into the fantasy it will pay off big. Other cities are expanding their convention centers or building new ones, and 1,000-room hotels are all the rage. The CRVA’s executive director, Tom Murray, acknowledges that building such a hotel, which would cost around $300 million, would require help from taxpayers.
All this to claw for a small slice of a declining industry in which supply already dwarfs demand.
Before we leap down that path, Charlotte should take a breath and have a conversation about the most effective approach going forward. We’re not suggesting that city leaders shouldn’t invest aggressively in the future. Cities grow or die. Tourism, though, is just one means to the real end: More and better jobs. We suspect some of the millions spent on the convention industry could be better used on other economic development efforts.
The city’s debt payments on the convention center are dropping about $5 million this year. Murray has a chance to lead a thoughtful conversation about how we invest that windfall and how we pursue convention business in general. If we were hoteliers or restaurateurs, we’d be demanding a lot more for our money. As citizens, we should be doing the same.