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Myth busting: why convention center hotels can benefit from public ownership

April 18, 2019

Public subsidies to private projects are regularly scrutinized, particularly those extended to the hotel sector, whether it’s due to the perceived lack of transparency, hidden motives to promote personal agendas or inexperience in a particular industry.

However, we believe that the bad rap isn’t necessarily warranted and that public ownership in convention center hotels provides numerous benefits. In response, we’ve busted three of the biggest myths surrounding public ownership of convention center hotels.

Myth #1: The public sector should not replace the private sector in hotel ownership

While it’s a case-by-case situation, public ownership of convention center hotels is a bit different than non-convention center hotels. When public groups make investments to build or expand a convention center, the hotel component is incredibly important. Additional funding and public support can make these projects feasible and provide benefits to the community. For example, Cuyahoga County and the City of Cleveland’s development and ownership of a 600-room convention hotel, which helped bolster convention business and revitalize downtown Cleveland.

Myth #2: The public sector does not have the expertise to deliver a convention center hotel

Compared to the private sector, the public sector often receives more negative attention when a convention center hotel project isn’t flawlessly executed. While it may be assumed that any issue with the project is due to lack of experience, the reality is that many complex, large-scale projects, regardless of private or public ownership, experience a challenge or two.

What’s important is that passionate public officials and experienced private sector talent build strong partnerships and incorporate their perspectives and best practices to accomplish the mutual goal of a viable hotel project.  

Myth #3: The public sector got involved and I’m not really seeing the benefits

Perception is reality and we often see public owners underemphasize important objectives beyond increasing convention center business. While this growth is a key measurement metric, there is more to what makes a convention center hotel successful — these are points that public owners need to emphasize more:

  1.  Without a convention center hotel, many convention groups will move on to other destinations — investment is critical to compete in a changing marketplace.
  2. Conventions attract parallel events that aren’t often counted as convention center business. However, these parallel events bring visitors who also require lodging, adding to the benefit of a convention center hotel.

Read our full take on the public ownership of convention hotels here