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Baltimore tourism business steady, but Otakon's exit points to future challenges

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Even after losing Otakon, the city's biggest convention, Visit Baltimore promoted its success booking future conventions last week.

Baltimore's tourism business ticked up somewhat in fiscal year 2013, which ended June 30. Visit Baltimore, the city's convention and visitors bureau, said it sold 477,764 convention room nights for future dates, the third-most of all time.

Still, the loss of the giant anime convention demonstrates the need for the city to expand and refresh its convention center in the next decade as business travel rebounds, city officials said.

Visit Baltimore officials and others in the industry — including Baltimore Arena and Baltimore Convention Center executives — warned that Baltimore's advantages, the convenience of the Inner Harbor and relatively inexpensive hotels won't be enough for it to remain a desirable destination. They said the city needs a new arena and more exhibition space or it risks falling behind in the lucrative convention market.

"Certainly we're happy with what we were able to do during the last fiscal year, and it shows improvement within the window of possibility we have with our current offerings," said Tom Noonan, Visit Baltimore's president and CEO. "But everyone knows the arena has only so many more years of useful life, and our convention center has gone from being the 35th-largest to around 72nd. We're losing ground."

Baltimore lost Otakon because the popular gathering outgrew the city's convention center, which opened in 1979 and was expanded in 1996. Event organizers cited a need for more exhibition space as the primary reason for their announcement Sunday of a move to D.C.'s much larger center starting in 2017.

The anime convention drew 27,000 visitors to the city and had an economic impact of $10.6 million in 2012, according to Visit Baltimore's annual report, released Wednesday. This year's Otakon brought in 34,100 people, organizers said.

Otakon arrived at the convention center in 1999 with a crowd of 4,500 but now spills over into the former 1st Mariner Arena and nearby hotels' meeting spaces.

"Otakon leaving highlights the need for Baltimore to expand the size of our convention center … if we are to remain competitive and be under consideration to attract some of the largest convention business in the country," said Donald C. Fry, president and CEO of the Greater Baltimore Committee.

Fry has been the driving force behind a proposal to form a $900 million public-private partnership to build a new arena and connect it to an expanded convention center.

But little progress on that proposal has been made. City and state officials have been negotiating with Willard Hackerman, president and CEO of Towson-based Whiting-Turner Contracting Co., since April 2012 about how to pay for it all.

Hackerman has found it "very challenging," Fry said in an email, to raise money to build a new arena and hotel. Hackerman owns the Sheraton Inner Harbor Hotel, which is adjacent to the convention center and would be torn down. Fry said the GBC, Hackerman, the Baltimore Development Corp and others are exploring other options to fund the project.

In 2012, a report commissioned by the Maryland Stadium Authority found that a new 18,500-seat arena and convention center would spur economic growth but questioned the availability of private funding given the lack of a professional sports team as an arena tenant.

Still, the state will release $2.5 million to pay for an expanded study of the project if the parties can come up with a funding plan.

The uncertainty surrounding plans to renovate the convention center played a part in Otakon's departure.

Visit Baltimore warned a team evaluating bids for future Otakon conventions that construction could affect those events, said Victor Albisharat, spokesman for Otakorp, the all-volunteer Pennsylvania nonprofit that runs Otakon. The GBC plan calls for demolishing and expanding the convention center's east wing and linking it to the arena.

"We're asked about it, and I try to make it clear that there's no set plan and that we're not near that point," Noonan said. "There's still so much work that needs to be done to even begin studying how this would work. And part of that study will be to figure out how we operate during construction. It will give us some answers."

Noonan and other Baltimore officials were caught off guard by Otakon's news release saying the possibility of construction and the condition of the building — the release said it had "not aged well" — had contributed to the decision to move. They were told more than five years ago that the organization anticipated having to move to a larger facility eventually.

D.C.'s Walter E. Washington Convention Center offers 725,000 square feet of exhibition space and 2.4 million square feet of total space, compared to 300,000 square feet and 1.3 million in Baltimore.

"Usually when somebody says they've gotten too big for us, I tip my hat to their success and wish them good luck," Noonan said. "Every other problem, we say, 'Wait, we can fix that.' "

Noonan and Peggy Daidakis, executive director of the Baltimore Convention Center, said Otakon officials never brought specific concerns to them and had expressed regret about leaving for logistical reasons.

Albisharat declined to discuss the group's specific concerns about the Inner Harbor facility.

Officials from two groups with convention dates booked in Baltimore said they were not concerned about the building. They also said they have followed Baltimore's efforts to expand its center and feel that any movement in that direction is several years away, leaving time to change or alter plans.

"One of the things that impressed our group the most was that Baltimore seemed to really work together, the [convention and visitors bureau] and the hotels, and have a strong plan," said Lancey Cowan, senior director of meeting operations for the Association for Research in Vision and Ophthalmology.

The medical group held its annual convention here this year after spending 40 years in southern Florida, and has booked dates in Baltimore for 2017 and 2020.

"We haven't run our event there, but our board members who evaluated the property ranked it very highly," Cowan said. "We have no concerns related to the building at all."

The Natural Products Expo East brought 21,658 people to Baltimore last September, second only to Otakon, and had a bigger economic impact — $11.2 million compared to $10.6 million. Its parent company, New Hope Natural Media, has moved the conference, most recently to Boston in 2011, but faced complaints from attendees.

"Baltimore is where our audience wants to be," said Adam Andersen, the company's group show director. "They like the Inner Harbor area, the hotel rates, the restaurant variety. Our decision is totally driven by our audience."

Andersen said the convention center needs work, but "there are plenty of others that look a lot worse."

The Baltimore Convention Center's weakness is its in-house services, said Andersen, adding that he and some others in the industry consider them "below average." But Visit Baltimore is known for crafting creative deals and creating an easy experience for planners.

"Baltimore is home, and it creates the community feel our people are looking for because of the nearby hotels and restaurants," he said.

Daidakis defended the center's services, saying it deals with complaints promptly and works to make visitors feel welcome in Baltimore.

Convention groups "own the city," she said, and find it easy to get around and enjoy restaurants and museums. "I don't think you get that many other places," she said.

Trade Show News Network will release a ranking of 411 exhibition spaces in the country in the coming months showing Baltimore as the 66th most desirable place to have an event, said Rachel Wimberly, the website's editor.

"It's certainly near the top of the group, especially given its size constraints," she said.

Noonan said Baltimore is able to bid on about 70 percent of all convention business, owing to size limitations. There are 6,000 trade shows each year, Wimberly said.

Baltimore faces stiffening competition from similar-sized cities.

Nashville, Tenn., opened a second convention center this year with 350,000 square feet of exhibition space and a hotel. At $750 million, it was the most expensive publicly funded project in state history, and Noonan said he expects Nashville to vie for many of the events Baltimore is trying to book.

Indianapolis expanded its convention center and connected it to Lucas Oil Stadium, home to the NFL's Colts, in 2011 and, bolstered by a new airport, has seen a rejuvenated convention business.

Both cities offer cheaper hotel rates than Baltimore, according to CVent, an event management company.

Cleveland built the $465 million Medical Mart & Convention Center to lure coveted health care industry gatherings, many of which have chosen Baltimore in the past because of the city's strong community of hospitals.

At least four other cities have refurbished convention space opening this year

"We should be looking at growth," Daidakis said. "We need to do that. It's a very complicated project, though, with so many entities involved and so much to figure out."

chris.korman@baltsun.com

twitter.com/chriskorman

Room nights booked by Visit Baltimore

2007: 381,556

2008: 451,608

2009: 522,541

2010: 495,896

2011: 457,051

2012: 475,554

2013: 477,764

Note: Rooms were also booked during fiscal year for future conventions.

Copyright © 2014, The Baltimore Sun
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