Feasibility Study for an ExpandedNew Convention Center in Jacksonville

1
Feasibility Study for an Expanded/New Convention
Center in Jacksonville
DRAFT COPY For Discussion Purposes

• June 13, 2007

2
Table of Contents
Local Market Conditions.4 Histori
cal Facility Operations.....8 Indust
ry Trends..16 Competitive
Comparable Markets Facilities..22 Market
Surveys..47 Market
Conclusions..65 Appendix
.
3
Study Components
PHASE ONE
PHASE TWO

• Local Interviews
• Local Market Conditions
• Existing Local Facilities
• Industry Trends
• Comparable and Competitive Markets Facilities
• Market Surveys
• Market Conclusions

• Building Program and Event Levels
• Site Selection
• Finance
• Facility Expenses
• Community Economic Impact
• Report and Presentation

4
Local Market Conditions
5
Local Jacksonville Hotel Inventory
Source Facility Management, 2007
6
Local Market Issues and Conclusions

• Strengths
• Presence of international airport
• Driving access to several markets
• Local population and corporate base
• Potential cost benefits
• Beaches, resorts, golf and other visitor
  amenities
• Weaknesses
• Lack of brand identity and awareness
• Inventory of downtown hotels, restaurants and
  retail
• Downtown entertainment and nightlife
• Proximity to Competitive Markets with many
  facility alternatives
• Few traditional, full-service, conventionquality
  hotel properties
• Lack of industry reputation as a
  conference/convention destination
• Nearby Presence of Competitive Conference and
  Convention Venues

7
Jacksonville Visitor Amenity Map
8
Historical Facility Operations
9
Total Number of Events Hosted at POCC (Fiscal
Year 2004 2006)
151
146
131
Note Figures include all events held at the
POCC. Source Facility Management, 2007
10
POCC Space Occupancy (Fiscal Year 2006)
Note Figures include all events utilizing POCC
exhibit or ballroom space. Source Facility
Management, 2007
11
POCC Space Occupancy by Month (Fiscal Year 2006)
Note Figures include all events utilizing POCC
exhibit or ballroom space. Source Facility
Management, 2007
12
Summary of Lost Business by Year by Event Type
Source Jacksonville and the Beaches Convention
and Visitors Bureau, 2007
13
Summary of Lost Room Nights by Year by Event Type
Source Jacksonville and the Beaches Convention
and Visitors Bureau, 2007
14
Summary of Lost Business Peak Room Nights
Average 270 Median 125
Source Jacksonville and the Beaches CVB, 2007
15
Summary of Lost Business Total Attendance
Average 620 Median 225
Source Jacksonville and the Beaches CVB, 2007
16
Industry Trends
17
Summary of Convention Center Event Types
18
The Recovery of the Biggest
Percent
Source Tradeshow Week, 2007 U.S. Department of
Commerce, Bureau of Economic Analysis, 2007
19
Continued Optimism By Planners
Expected Change in Space Requirements Over Next 5
Years
Source CSL International National/Regional
Convention Planner Surveys, 2000 2006.
20
Continuing Space Development
Growth Index 1989100 Base Year
Source Tradeshow Week, Tradeshow Week Major
Exhibit Hall Directory, 2006.
21
Re-converging Supply Demand?
CEIR Demand Index vs. Tradeshow Week Exhibit
Supply
Growth Index 2000100 Base Year
Source CEIR Index Report, 2007 Tradeshow Week
Major Exhibit Hall Directory, 2006.
22
Competitive Comparable Markets Facilities
23
Competitive Facilities
24
Comparison of Prime Exhibit Space Competitive
Facilities
Average 124,700 Median 107,800
Note Boca Raton, FL, Omni Orlando, FL and
Hyatt Regency Jacksonville do not offer exhibit
space. Source facility floorplans, management,
and industry publications, 2007
25
Comparison of Meeting Space Competitive
Facilities
Average 28,700 Median 28,100
Source facility floorplans, management, and
industry publications, 2007
26
Comparison of Ballroom Space Competitive
Facilities
Contiguous Average 27,700 Contiguous Median
25,000 Total Average 34,000 Total Median
26,500
Source facility floorplans, management, and
industry publications, 2007
27
Comparison of Total Sellable Space Competitive
Facilities
Average 170,800 Median 143,300
Source facility floorplans, management, and
industry publications, 2007
28
Comparison of Total Number of Breakout Meeting
Rooms Competitive Facilities
Average 25 Median 22
Source facility floorplans, management, and
industry publications, 2007
29
Comparison of CVB Budget Competitive Facilities
Average 7,110,000 Median 4,803,000
Note Orlando, FL CVB Budget (40,789,000) was
excluded. Source Convention and Visitors
Bureaus 2007
30
Comparison of CBSA Population Competitive
Markets
Average 1.07 Median 0.99
Source Claritas Inc., 2007
31
Comparison of Total Hotel Rooms Within the Metro
Area Competitive Markets
Average 13,600 Median 13,600
Note Atlanta, GA (92,000 rooms) and Orlando, FL
(113,000 rooms) were excluded from this
comparison. Source Convention and Visitors
Bureaus, 2007
32
Comparison of Rooms at HQ Hotel Competitive
Markets
Average 600 Median 540
Note Fort Lauderdale, Miami Beach, Tallahassee
and the Prime Osborn Center do not have
headquarters hotels. The World Center
Marriott in Orlando (2,000 rooms) was excluded
from this comparison. Source Convention and
Visitors Bureaus 2007
33
Comparison of Hotel Room Tax Rate Competitive
Markets
Average 12.8 Median 12.8
Source Convention and Visitors Bureaus 2007
34
Ratio of CBSA Population to Sellable Space and
Population to Metro Hotel Rooms Competitive
Markets
Ratio of Population to Sellable Space
Average 12.1 Median 8.5
Ratio of Population to Hotel Inventory
Average 117.6 Median 65.6
Source Claritas, 2007, facility floorplans,
management and industry publications, 2007 and
Convention and Visitors Bureaus, 2007.
35
Ratio of Hotel Rooms to Sellable Space
Competitive Markets
Average 0.16 Median 0.08
Note Omni-Orlando (1.96 hotel rooms per square
foot of sellable space) was excluded from this
comparison. Source Convention and Visitors
Bureaus, 2007 and facility floorplans,
management and industry publications, 2007.
36
Comparison of Average Per Diem Competitive
Markets
341
330
330
301
300
299
293
291
289
284
Average 300 Median 296
272
269
Source Business Travel News, 2007 Corporate
Travel Index, February, 2007
37
Comparison of Employees at Companies Within the
CBSA with 100 or More Employees Competitive
Markets
Average 9,600 Median 5,800
Source Claritas, 2007
38
Comparable Facilities
39
Comparison of Sellable Space Comparable
Facilities
Average 233,300 Median 149,600
Source facility floorplans, management, and
industry publications, 2007
40
Comparison of CVB Budget Comparable Facilities
Average 5,573,800 Median 5,550,000
Source Convention and Visitors Bureaus 2007
41
Comparison of CBSA Population Comparable Markets
Average 1.33 Median 1.35
Source Claritas Inc., 2007
42
Comparison of Total Hotel Rooms Within ½ Mile of
the Convention Center Comparable Markets
HYATT
Average 2,800 Median 2,600
Note Jacksonville figures include the Hyatt
Regency Jacksonville Riverfront, although it is
just beyond ½ mile from the POCC. Source
Convention and Visitors Bureaus, 2007
43
Comparison of Rooms at HQ Hotel Comparable
Markets
Average 690 Median 700
Note Jacksonville and Salt Lake City do not have
headquarters hotels. (1) Milwaukee has two
headquarters hotels the Hilton Milwaukee City
Center with 730 rooms and the Hyatt Regency
Milwaukee with 484 rooms. (2) Rochester has two
headquarters hotels the Clarion Riverside with
472 rooms and the Hyatt Regency Rochester with
336 rooms. (3) Nashville is currently planning
a 400 room headquarters hotel. Source
Convention and Visitors Bureaus 2007
44
Comparison of Hotel Room Tax Rate Comparable
Markets
Average 13.8 Median 13.8
(1) Virginia Beach charges an additional 1.00
per night tax. Source Convention and Visitors
Bureaus 2007
45
Comparison of Average Per Diem Comparable Markets
385
355
316
315
311
296
293
293
Average 315 Median 303
293
291
Source Business Travel News, 2007 Corporate
Travel Index, February, 2007
46
Comparison of Employees at Companies Within the
CBSA with 100 or More Employees Comparable
Markets
Average 7,200 Median 7,100
Source Claritas Inc., 2007
47
Market Surveys
48
Participating State and Regional Organizations
49
Likelihood of Rotating Events to Jacksonville
State and Regional Event Planners
Positive response - 78 Negative response - 22
Source CSL Interviews, 2007
50
Summary of Exhibit Space Demand State and
Regional Events
Average 16,300 Median 6,000
POCC
Note Data represented includes all organizations
with a potential interest in the Prime Osborn
Convention Center. Source CSL Interviews, 2007
51
Summary of Delegate Attendance State and
Regional Events
Average 430 Median 300
Note Data represented includes all organizations
with a potential interest in the Prime Osborn
Convention Center. Source CSL Interviews, 2007
52
Seasonal Preference by Month - State and
Regional Event Planners
Spring - 18 Summer - 44 Fall 30 Winter 8
Note Data represented includes all organizations
with a potential interest in the Prime Osborn
Convention Center. Source CSL Interviews, 2007
53
Summary of Peak Night Hotel Room Blocks State
and Regional Events
Hyatt
Average 225 Median 125
Note Data represented includes all organizations
with a potential interest in the Prime Osborn
Convention Center. Source CSL Interviews, 2007
54
Summary of Expected Hotel Room Rate State and
Regional Events
Average 130 Median 125
Note Data represented includes all organizations
with a potential interest in the Prime Osborn
Convention Center. Figures represent average
dollars per night. Source CSL Interviews, 2007
55
Participating National Conventions and Tradeshows
56
Likelihood of Rotating Events to Jacksonville
National Conventions and Tradeshows
Positive response - 37 Negative response - 63
Note Data represented includes all organizations
interviewed. Source CSL Interviews, 2007
57
Comparison of Response Rate from Similar Market
Surveys National Convention and Tradeshows
Source CSL Interviews, 2001 2007
58
Seasonal Preference - National Conventions and
Tradeshows
Spring - 33 Summer - 35 Fall 18 Winter 14
Note Data represented includes all organizations
with a potential interest in the Prime Osborn
Convention Center. Source CSL Interviews, 2007
59
Summary of Delegate Attendance National
Conventions and Tradeshows
Average 2,600 Median 2,150
Note Data represented includes all organizations
with a potential interest in the Prime Osborn
Convention Center. Source CSL Interviews, 2007
60
Summary of Peak Night Hotel Room Blocks
National Conventions and Tradeshows
Average 1,200 Median 900
Jacksonville Metro Area
Hyatt
Note Data represented includes all organizations
with a potential interest in the Prime Osborn
Convention Center. Source CSL Interviews, 2007
61
Number of Hotels Willing to Use National
Conventions and Tradeshows
Note Data represented includes all organizations
with a potential interest in the Prime Osborn
Convention Center. Source CSL Interviews, 2007
62
Summary of Exhibit Space Demand National
Conventions and Tradeshows
Average 62,200 Median 40,000
POCC
Note Data represented includes all organizations
with a potential interest in the Prime Osborn
Convention Center. Source CSL Interviews, 2007
63
Summary of Meeting Space Demand National
Conventions and Tradeshows
Average 32,400 Median 26,100
Hyatt
POCC
Note Data represented includes all organizations
with a potential interest in the Prime Osborn
Convention Center. Source CSL Interviews, 2007
64
Summary of Ballroom Space Demand National
Conventions and Tradeshows
Average 12,100 Median 7,500
Hyatt
POCC
Note Data represented includes all organizations
with a potential interest in the Prime Osborn
Convention Center. Source CSL Interviews, 2007
65
Market Conclusions
66
Summary of Study Findings Relevant Site
Characteristics

• Many competitive destinations offer a diverse
  package of center, hotel and entertainment within
  close proximity.
• The lack of hotel and entertainment amenities
  proximate to the Prime Osborn Center represents a
  major deficiency when competing for non-local
  business.
• Development of retail/entertainment in
  Jacksonville appears to be trending away from the
  Center vicinity.
• A major benefit of a Florida destination
  (immediate beach access), is not available in
  Jacksonville.

67
Jacksonville Visitor Amenity Map
68
Tampa Visitor Amenity Map
69
Savannah Visitor Amenity Map
70
Summary of Study FindingsHistorical P.F.O.
Center Operations

• Occupancy levels for the P.F.O. Center are
  relatively low.
• Convention activity at the Center is limited.
• The Center focuses more on locally-oriented
  events.
• Seasonality patterns indicate a first quarter
  peak, with very low demand in the summer months.
• Significant business is recorded as lost, likely
  due to a combination of factors including lack of
  attached hotel.

71
Summary of Study Findings Competitive
Destinations

• Competitive destinations continue to improve
  their convention package, including added center
  space, hotel inventory and entertainment
  amenities.
• 17 competitive centers were reviewed. The
  average exhibit space offered at these centers
  averaged 125,000 s.f. The PFO ranked 15th among
  these centers.
• PFO meeting space ranked at the midpoint of the
  competitive set, while the Hyatt meeting ranked
  second.
• The overall hotel room inventory in the downtown
  area ranks near the bottom of the competitive
  set, however the Hyatt ranks as one of the
  largest headquarters properties.
• Population and corporate base rank near the
  midpoint of competitive destinations.
• Jacksonville CVB budget ranks towards the lower
  end of competitive set.

72
Summary of Study Findings -Jacksonville Demand
Characteristics

• State/Regional Demand
• Strong interest in Jacksonville from
  state/regional planners. Demand follows a summer
  peak pattern.
• Prime Osborn can accommodate exhibit needs for
  nearly all demand from this segment.
• Hyatt can accommodate sleeping room needs for
  nearly all demand from this segment.
• 90 percent of planners require an attached
  headquarters hotel.
• National Demand
• General interest in the Jacksonville destination
  rates in the low to mid range. Demand follows a
  spring/fall peak pattern.
• However, much of this interest can be considered
  soft as the Jacksonville destination is
  relatively unknown among national meeting
  planners.
• The Prime Osborn can accommodate the exhibit
  space demands for approximately 67 percent of the
  national event market, and 65 percent of the
  meeting space needs.
• The large majority of demand from this segment
  requires an attached or adjacent headquarters
  hotel, with most events using several properties
  to fill a hotel room block.
• The Hyatt can accommodate the meeting space needs
  of over 90 percent of the national event market,
  but does not offer dedicated exhibit space.

73
Summary of Study Findings -Development Issues

• Apparent lack of current demand for significant
  convention center investment.
• Development of hotel and entertainment assets in
  Jacksonville point towards alternate sites for
  future Center investment.
• Careful site planning and program configuration
  would be needed on alternate site near Hyatt.
• Prime Osborn should continue as an important
  community event asset. Potential exists to
  expand the public use of the facility.

74
Appendix
75
CSL Interview Summary