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SO WE HAVE A QUORUM, SO[CALL TO ORDER]
LET'S OPEN THE MEETING AT THREE 14, UH, CALLED ORDER.AND FIRST ITEM OF BUSINESS IS APPROVAL OF
[APPROVAL OF MINUTES]
THE MINUTES.DO I HEAR A MOTION ON APPROVAL OF MINUTES WHERE ANY DISCUSSION SECONDED BY JOHN ALL IN FAVOR? AYE.
[2. Discussion regarding convention center expansions by Tom Hazinski, HVS Consultant and Katy Zamesnik, Austin Convention Center Department Chief Administrative Officer]
OKAY.AND I'M ASSUMING THAT WE HAVE TOM HAS IN SKI HERE FROM HVS.
UH, SO I THOUGHT PERHAPS WE WILL LET TOM GIVE HIS PRESENTATION AT THIS POINT, UH, IF THAT'S OKAY.
SO THAT MAKES UP THE WHOLE, I THINK CONVENTION SPORTS, ENTERTAINMENT, PUBLIC ASSEMBLY FACILITIES.
WE HAVE STUDIED A LOT MIXED USE DEVELOPMENTS, A LOT OF THEM THAT URBAN AREAS.
SO, AND THERE ARE STUDIES THAT ARE WELL RECEIVED IN ROLLED UP WELL I'M SCRUTINY.
SO, UM, MORE SPECIFICALLY ABOUT THIS STUDY, THAT THE SCOPE.
SO, YOU KNOW, WE, UM, WE'VE DONE A SITE VISITS WE'VE, UH, HAD LONG CONVERSATIONS ABOUT THE DEVELOPMENT PLANS.
UM, WE DID THE BASIC ECONOMIC DEMOGRAPHIC ANALYSIS THAT'S NECESSARY FOR A STUDY.
WE DOVE INTO, UM, HISTORICAL EVENT DATA AND DEEPLY IN THE FINANCIAL STATEMENTS OF THE ACC.
UM, IMPORTANTLY, WE CONDUCTED EVENT PLANNERS, SURVEYS AND INTERVIEWS.
UM, UH, AND, UH, YOU KNOW, THIS WAS, UH, A VERY, UH, I'M GONNA SAY THAT IMPRESSED ME HAVING DONE IT IN A LOT OF THESE SURVEY SURVEYS, UH, ALL OVER THE COUNTRY.
UM, AUSTIN RECEIVED THE HIGHEST RATINGS AS A DESIRABLE DESTINATION OF ANY SURVEY EVER DONE.
SO, UH, IT REALLY SPOKE TO A LOT OF DEMAND AND ALSO HIGHLIGHT THE GAP BETWEEN, UH, WHAT AUSTIN HAS TO OFFER.
AND WHAT'S, UM, UH, IF EMPLOYERS ARE LOOKING FOR, UM, I MEAN, YOU'RE, YOU'RE RIGHT NOW, YOU'RE PERFORMING KIND OF LITTLE BIT BETTER THAN CITY OF PITTSBURGH, BUT YOU'RE THE MOST DESIRABLE
[00:05:02]
CONVENTION DESTINATION IN THE COUNTRY.SO THAT THAT'S, THERE'S KIND OF THAT REVEAL THE REAL GAP.
UM, WE ALSO ANALYZE THE FUTURE BOOKINGS.
WE DID A LOT OF COMP RESEARCH, UM, AND WE DID THIS AND THEN THIS OF COVID, THAT'S WHY I WANTED TO BRING, YOU KNOW, SOME DISCUSSION COVID INTO THAT.
CAUSE WE KNOW MORE ABOUT THAT NOW, BUT THAT WAS SUCH AN INCREDIBLY UNCERTAIN PERIOD.
UH, AND, UH, SO WE HAD TO THINK HARD ABOUT THAT AND I THINK ACTUALLY WE'RE EMERGING FROM IT STRONGLY THAN WE HAD ANTICIPATED.
UH, AND I THINK, ALTHOUGH I HAVEN'T DOVE INTO THE NUMBERS LATELY, I THINK THE ACC IS AS WELL.
AND THEN WE DID THE DEMAND OF FINANCIAL PROJECTIONS UNDER DIFFERENT EXPENSES SCENARIOS.
THEN WE DID THE ECONOMIC IMPACT ANALYSIS.
SO THAT WAS WHAT THAT WAS, UH, THE SCOPE RELATED TO THE EXPANSION STUDY.
SO I RECENTLY, UM, ATTENDED THE CONFERENCE, UH, INTERNATIONAL ASSOCIATION OF VENUE MANAGERS, AND THERE'S A GUY THAT'S BEEN DOING RESEARCH IN MINISTRY FOR MANY, MANY YEARS.
HE'S NOW ACCESS INTELLIGENCE RESEARCH.
AND HE GAVE THEM A REALLY INTERESTING PRESENTATION BECAUSE IT WAS THE LATEST INFORMATION ON HOW THE INDUSTRY REVIEWS ITSELF IN SOME COVERING.
UH, SO, UH, THEY ASKED, UH, THEY, UH, THEY INTERVIEWED DEEMOS, THEY INTERVIEWED EVENT PRODUCERS, PEOPLE THAT SPONSORS THESE EVENTS AND THEY ALSO INTERVIEWED, UH, SURVEY MANAGERS LIKE THIS WASN'T JUST ONE OFF.
THIS WAS LIKE EACH ONE OF THEM HAD SEVERAL HUNDRED INTERVIEWS, UH, THAT ARE SURVEYS THAT THEY RESPONDED TO.
SO, UH, AND ONE OF THE QUESTIONS THEY ASKED WAS WHERE'S YOUR ATTENDANCE COMPARED TO 2019? AND ON AVERAGE UP MS CENTER MANAGERS SAID THEY WERE AT 71% AND EVENT.
PRODUCERS SAID THEY WERE AT 68%, BUT THEY'VE HAD PRODUCER DATA WAS A LITTLE BIT OLDER.
UM, THE DML ADVANCED BOOKINGS KIND OF ALSO CONFIRMED THIS, UH, THERE WERE DIFFERENCES BETWEEN CITIES AND GATEWAY CITIES WERE DOING BETTER THAN SOME OTHER CITIES.
SO EVEN AMONGST CITIES, SOME ARE DOING MUCH BETTER, UH, AND A LITTLE BIT BETTER, SOME, A LITTLE BIT WORSE, BUT GENERALLY THE OVERALL FEELING WAS AS OF JUNE OF THIS YEAR, WE'RE ABOUT BACK TO 71%.
THAT'S THAT'S, YOU KNOW, COMPARED TO BEING AT 10 30, 10 TO 15% DIRTY COFFIN.
SO IT'S, IT'S, UH, UH, REBUILT.
AND THEN, UM, THEY WERE ASKED WHAT'S THE BEST OUTLET FOR NOVEL GROWTH.
AND, UH, YOU KNOW, UH, YOU KNOW, WHEN YOU EXPECT RECOVERY LEVELS AND THEY WERE SAYING GENERALLY THE CONSENSUS WASN'T 18 TO 24 MONTHS, WE'LL BE BACK TO THREE COVID LEVELS.
UM, THEY ALSO ASKED OTHER INTERESTING QUESTIONS, LIKE OUR COMMITMENT CENTERS OFFERING HIGHER DISCOUNTS.
UH, THE MANAGERS SHOULD KNOW WHETHER THEY'RE, UH, AND, UH, 62% SAID NO, 38% SAID YES.
SO THIS IS VERY DIFFERENT THAN THE LAST THREE SESSION WHERE THESE NUMBERS WOULD HAVE BEEN REVERSED.
SO THE AMOUNT OF DISCOUNTING THAT'S GOING ON IS NOT AS EXTREME AS IT WAS DURING THE GREAT RECESSION.
SO IT'S ACTUALLY LESS DISCOUNTING IN TERMS OF THE, DURING THE RECOVERY PERIOD.
UH, SO BY AND LARGE FUNDERS ARE WILLING TO PAY WHAT THEY WERE BEFORE.
UM, AND THEN INFLATION IS AN ISSUE FOR ANYBODY AND LABOR IS AN ISSUE FOR EVERYBODY.
UM, SO, UH, I THOUGHT THAT WAS SOME INTERESTING, UH, DATA AND, UM, I THINK, UH, UH, AUSTIN'S RECOVERY IS ATTRACTING THIS TREND.
UM, AND MOSTLY I WANT TO SPEND TIME WITH ECONOMIC IMPACT.
CAUSE I THINK, YOU KNOW, THERE'S A LOT OF DISCUSSION IN AUSTIN ABOUT, UH, YOU KNOW, WHETHER THIS PROJECT SHOULD OCCUR ABOUT, I JUST WANT TO SAY ONE THING ABOUT OUR ROLE IN THIS, UM, THAT, UH, HS IS NOT AN ADVOCATE FOR THOSE PROJECTS.
WE ARE HERE TO PROVIDE INFORMATION.
SO, UM, UH, IN FACT, IF YOU LOOK AT THE CERTIFICATIONS IN OUR, SO YOU WOULD SAY VERY SPECIFICALLY, UH, WE ARE INDEPENDENT, UH, OUR COMPENSATION ISN'T DEPENDENT ON THE RESULTS.
WE HAVE NO ONGOING INTEREST IN THE PROJECT.
WE'RE HERE TO PROVIDE THE BEST INFORMATION AVAILABLE FOR YOU TO MAKE THOSE JUDGMENTS.
UH, WE DON'T HAVE AN ADVOCACY ROLE.
AND SO WE'RE AN OBJECTIVE INDEPENDENT THIRD PARTY.
SO WHEN WE APPROACH, UM, THIS, UH, ECONOMIC IMPACT, WE APPROACH IT WITH THAT IN MIND, DOING OUR BEST TO ESTIMATE, UH, DEMAND AND THE ASSOCIATED SPENDING WITH IT.
SO THIS IS A TYPICAL APPROACH, AND THIS IS WHAT WE WERE ASKED TO DO ON THIS ASSIGNMENT.
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UH, AND THAT IS TO ASK THE QUESTION OF HOW MUCH NET NEW DEMAND IS THIS BRINGING AND HOW MUCH OF IT COMES FROM OUTSIDE BOSTON, UH, THEN ATTACH TO THAT NET NEW DEMAND, WHETHER IT'S, UH, EXHIBITORS ATTENDEES, OUR DAY TRIPPERS, OR, UH, EVENT ORGANIZERS, UM, HOW MUCH DO THEY SPEND WHEN THEY COME? AND THAT GIVES US A REAL STRICT SPENDING THAT THE CONVENTION CENTER ATTRACTS.UM, AND THEN THOSE ARE, UM, THAT IS THEN FED INTO AN INPUT OUTPUT MODEL WHEN WE SLINKED LAND SHOULD IT'S WIDELY USED IN THE INDUSTRY AND MANY INDUSTRIES, JUST THIS ONE, UH, AND YOU KNOW, NOT ALL OF THAT GROW ROASTER, EXPENDING LANDS IN AUSTIN.
THERE YOU BUY SOMETHING AT A RETAIL STORE.
THAT'S ONLY THE PROFIT MARGIN THAT LANDS IN AUSTIN BITES.
UM, SO WE, WE ADJUST THE NATURAL EXPENDING, A LOT OF IMPACT STUDIES FAIL TO DO THAT, BUT WE MAKE THAT ADJUSTMENT TOWN AND THEN THE INDIRECT AND INDUCED SPENDING WHAT'S KNOWN AS MULTIPLIERS.
UH, AND THAT'S THE BUSINESS SPENDING THAT OCCURS.
THE RESTAURANT HAS TO BUY THE FOOD OR THEY INDUCE SPENDING AS THE NEW PERSONAL INCOME THAT'S GENERATED A NEW EMPLOYEE WAGES AND THAT SORT OF THING THAT'S SPENT IN THE ECONOMY THAT'S INDUCED SPENDING.
SO FROM THAT WE CAN ESTIMATE JOBS BECAUSE THE MODEL SHOWS US HOW MANY FULL-TIME EQUIVALENT JOBS THAT ARE RELATED TO THAT OUTLOOK.
AND, UM, AND THEN ALSO WE CAN LOOK AT WHAT SPENDING WOULD BE TAX.
SO THAT'S, UH, THAT'S WHAT WE, THAT'S TYPICAL APPROACH.
UM, I PUT A LITTLE BLINK HERE TO, UH, AN ARTICLE I RECENTLY WROTE ON WHOLE QUIETING, THE NOISE AND ECONOMIC IMPACT ESTIMATES.
YOU CAN SEE THIS IS VERY MULTILAYERED.
IT'S IS ACTUALLY A VERY SIMPLISTIC RENDERING.
WHY, HOW THIS IMPACT PROCESSES WORK AND, UH, AND THEIR WAY OF SAYING NOISY IN THAT WAY.
AND DIFFERENT PEOPLE DO THAT AND YOU GET REALLY WIDELY VARYING RESULTS.
AND THERE'S LOTS OF REASONS FOR THAT.
AND SO I KIND OF DO A CRITIQUE OF THIS KIND OF MODEL AND APPROACH.
AND THEN I, I SUGGEST WAYS, AND THESE ARE PRACTICES THAT WE EMPLOYED TO TRY TO REDUCE THE NOISE AND ITS IMPACT.
SO WE'RE DEALING WITH ESTIMATES HERE.
UH, IT IS A DIFFICULT THING TO NAIL DOWN AND YOU HAVE TO MAKE A LOT OF DECISIONS AND JUDGMENTS AND THOUGHT, NOT JUST AT THE HIGH LEVEL OF DEMAND, BUT ALSO HOW MUCH PEOPLE SPEND AND WHERE THEY SPEND IT.
AND SOMETIMES DATA IS LIMITED.
SO, BUT YOU KNOW, IF YOU, IF YOU WORK HARD AND USE A LOT OF DIFFERENT SOURCES, THERE ARE WAYS TO, UH, MAKE THESE MORE ACCURATE.
AND THAT'S WHAT WE TRY TO DO IN OUR RESEARCH, UM, UH, TO GO TO, UH, RESULTS, JUST TO SUMMARIZE THESE GRAPHICALLY, UH, WITH DETAILS THAT DON'T WORK, BUT, YOU KNOW, W WHAT, WE'RE, WHAT WE THINK WILL HAPPEN IF NOTHING IS DONE IS DEPICTED BY THIS DOTTED LINE ON THIS, THESE GRAPHS AND WHAT HAS HAPPENED HISTORICALLY.
SO WE'RE LOOKING AT HISTORICAL IMPACTS IN 2018 OR 450 MILLION ANNUALLY.
UM, SORRY, I DIDN'T PUT THE UNITS ON THE, THESE ARE MOMENTS.
UM, UH, BUT THEN, YOU KNOW, UH, WE HAD IT, UM, BOUNCING BACK IN 2022 AND 2023, UH, AND THEN THE CONSTRUCTION BEGINS AND THERE, UH, IS VERY DIFFICULT TO POSSIBLE EVENTS IN A FACILITY THAT'S NOT OPERATING THERE'S A LITTLE BIT BECAUSE SOMEBODY EVENTS MIGHT BE HELD ELSEWHERE, BUT THEN WHEN IT OPENS, YOU ARE OPENING IN A HIGHER LEVEL OF DEMAND.
AND THEREFORE, UH, YOU KNOW, IN FACT RACES, WE WERE ASKED TO LOOK AT A ONE PHASE, UM, DEVELOPMENT SCENARIO WHERE IT WAS ACTUALLY TORN DOWN AND PLACED IN THE SECOND PHASE SCENARIO, UH, WHERE IT'S, UH, A TWO PHASE THING.
BUT TWO PHASE THING IS NOT VERY HELPFUL BECAUSE IN TERMS OF DEMAND OR IMPACT, BECAUSE EVEN DURING CONSTRUCTION, EVEN IF THE WHOLE BUILDING IS OPEN, IT'S GOING TO BE VERY DIFFICULT.
SO THESE ARE OUR ANNUAL SPENDING IMPACTS UNDER THESE TWO SCENARIOS.
AND THEN, YOU KNOW, THIS KIND OF IMPACT ANALYSIS HAS DONE TO, TO, UH, TO ESTIMATE, WELL, WHAT'S THE RETURN, OR TO SPEND ALL THIS PUBLIC MONEY BORROW, UH, WHAT IS THE RETURN ON IT? SO THIS IS KIND OF, THIS IS A WAY TO LOOK AT THAT ESTIMATED RETURN ON THE INVESTMENT.
SO THIS IS THE CUMULATIVE SPENDING, UH, PER DOLLAR OF INVESTMENT, AND THE INVESTMENT INCLUDES CAPITAL COSTS AND ONGOING OPERATING LOSS AND INCLUDES ONGOING
[00:15:01]
CAPITAL MAINTENANCE, RIGHT? SO IT'S THE WHOLE LIFE CYCLE COST OF THE FACILITY.SO YOU CAN SEE IF WHEN, WHEN THIS GETS TO $1 FOR EVERY $1 OF INVESTMENT, YOU GET $1 OF RETURN.
THAT'S WHEN YOU START BREAKING, EVEN OBVIOUSLY DURING THE CONSTRUCTION PERIOD, YOU'RE IN THE HOLE, RIGHT.
UH, BUT THEN, UH, YOU USE, UM, UH, IN THE ONE PHASE EXPANSION, UH, IN 2029, IT BECOMES, STARTS TO BECOME A POSITIVE RETURN.
AND THEN THE CUMULATIVE RETURN BY 2038 IS FOR EVERY $1, YOU SPEND, YOU GET $7 INTO THE ECONOMY.
UM, AND, UM, UH, AND WITH THE TWO PHASE EXPANSION, SINCE THAT STARTS TO HAPPEN LATER, UM, YOU, YOUR FUNERAL IS SMALL.
SO, UH, I ALSO WANT TO TALK ABOUT GENERALLY ABOUT ECONOMIC IMPACT, THE PRESENT.
UM, UH, IF YOU READ THAT ARE PLEASED TO SEE THAT I HAVE A CERTAIN AMOUNT OF, UM, SKEPTICISM ABOUT THE ACCURACY OF A LOT OF THESE STUDIES AND DIFFICULTY GOT ALSO, I, UM, I, ONE OF THE PROBLEMS WE RUN INTO IN THESE STUDIES AND IN CRITIQUES OF THESE STUDIES IS THAT, UH, YOU KNOW, PEOPLE ARE ACTUALLY TRYING TO COUNT STUFF.
THEY'RE TRYING TO COUNT, HELPING PEOPLE CALL THEM THE DOOR.
I TRY TO COUNT HOW MANY ROOM NIGHTS IN THE BLOCK THAT'S PICKED UP.
AND THAT COUNTING IS A VERY DIFFICULT PROBLEM, BUT ROOM NIGHTS IS A GREAT EXAMPLE OF THAT.
SO, UM, YOU KNOW, WHAT NUMBERS ARE YOU TYPICALLY SEE THAT ARE PUBLISHED, AND THIS IS TRUE.
AUSTIN ARE ESTIMATES OF THE ROOM BLOCK PICKUP OF THEM MASS, RIGHT? SO, UH, UH, AND THOSE ARE, THAT IS JUST, UM, TO ME, TRYING TO DO THAT, AND USELESS NUMBERS IS, UH, A BIT OF A FOOL'S ERRAND, UH, BECAUSE, UH, ONE DOESN'T KNOW, UH, THERE'S TWO BIG THINGS YOU DON'T KNOW WHEN YOU'RE COUNTING WAS BLOCKED NUMBERS.
YOU DON'T KNOW HOW MANY PEOPLE HAVE BOOKED OUTSIDE OF BLOCK, THAT THERE ARE SOME STUDIES OF THIS SAY SOMEWHERE 30 TO 50% OF ROOM NIGHTS, DEPENDING ON THE MARKET ARE OUTSIDE OF THE BLOCK.
SO, UM, WHEN SOMEONE COMES ALONG AND SANDERS IS ONE OF THESE, THESE KIND OF WELL-KNOWN INDUSTRY GADFLY, UM, HE USES THOSE ROOM BLOCK NUMBERS TO SAID, LOOK, OH, THE CONSULTANTS ESTIMATED THIS.
AND THE BLUE BLOCKS ARE ONLY THIS, WELL, THE CONSULTANTS AREN'T ESTIMATING ROOM BLOCKS.
AND AS LONG AS OUR ESTIMATE, THE NET NEW IMPACT ON ROBOTS, RIGHT? SO, UM, UH, SO, BUT YOU CAN'T DIRECTLY COUNT THAT, RIGHT? UH, BECAUSE THERE'S NO, THERE'S NO DATA.
SO YOU ALSO, YOU DON'T KNOW HOW MUCH DEMAND YOU'RE DISPLACING, YOU'RE WORKING IN THE OTHER DIRECTION.
YOU KNOW, IF A HOTEL, YOUR BLOCKS, MOST OF THEIR ROOMS FOR A CONVENTION THAT THEY CAN'T PUT THEIR OWN IN-HOUSE BUSINESS THERE.
SO THAT'S NOT TAKING INTO ACCOUNT WHEN YOU LOOK AT LOBLAW.
SO WE, UH, WE DEVISED A METHOD WHICH WE ACTUALLY EMPLOYED IN AUSTIN, UH, TO ESTIMATE WHAT THE ACC IMPACT IS ON DOWN HAUL DOWN.
SO WHAT IT WAS IS MATCHING UP TWO DATASETS.
UM, FIRST WE TOOK SMITH TRAVEL RESEARCH DATA ON HOTEL OCCUPANCY AND AVERAGE DAILY ROOM RATE FOR EVERY DAY OF THE YEAR FOR 2015 TO 2019.
FORTUNATELY, THIS IS AUSTIN TO HAVE THIS DATA.
SO, BUT THEY ONLY HAD IT FOR DOWNTOWN.
THEY DIDN'T HAVE IT FOR THE CITY AS A WHOLE.
UM, AND THEN WE TOOK FOR THAT SAME PERIOD, WE TOOK AN EVENT DATA FROM THE ACC AND WE LINED IT UP EVERY DAY FOR THESE FROM 15 THROUGH 2019.
UH, AND SO WHEN THERE WAS A SIGNIFICANT ADVANTAGE, AND I THINK OUR THRESHOLD WAS, IT HAD TO HAVE, IT HAS TO BEEN OVER 500 ROOM NIGHTS OR SOMETHING LIKE THAT AND SAID, OKAY, WHAT'S THE DIFFERENCE IN OCCUPANCY ON DAYS WHEN THERE'S AN ACC EVENT AND NOT DAYS WHEN THERE'S NOT AN EVENT.
UH, AND SO THIS IS SHOWING THOSE THREE SALTS.
SO IT, IT LOOKS LIKE THE, UH, THE DIFFERENCE IS 12.1%.
WE RUN A STATISTICAL ANALYSIS ON THIS CALLED THE DIFFERENCE OF MEANS TEST.
SO IT NOT ONLY GIVES YOU THE DIFFERENCE.
IT TELLS YOU HOW MUCH CONFIDENCE YOU HAVE THAT THAT'S NOT HAPPENING BY CHANCE.
SO WE START WITH THE ASSUMPTION THAT THERE IS NO DIFFERENCE THAT THE AGENCY HAS ZERO IMPACT, AND WE TEST THAT HYPOTHESIS.
AND IF, IF THERE ISN'T A SIGNIFICANT DIFFERENCE, UM, THEN THAT HYPOTHESIS IS FALSE.
SO, UM, SO, AND, AND THE STATISTICAL ANALYSIS SHOWS THERE'S A LESS THAN 1% CHANCE THAT THIS IS NOT TRUE, THAT,
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UH, THAT IS HAPPENING IN THAT CHANCE.SO IT'S, IT'S HIGHLY SIGNIFICANT.
UM, AND THEN WE DID THE SAME THING WITH AVERAGE DAILY ROOM RATE SAY, OKAY, OUT OF THAT DAYS, AND THIS IS 2019 DATE, SO ON.
UH, SO IF YOU DID THIS MORE RECENTLY, YOU WOULD SEE THE LACK OF IMPACT IN COVID AND YOU WOULD NOW YOU WOULD SEE MUCH HIGHER ROOM RATES AND YOU WOULD SEE A BIGGER JUMP.
BUT, UM, SO, UM, THE THING ABOUT THE AVERAGE OF THE ROOM RATE IS THAT, UM, IT DOESN'T JUST AFFECT THE PEOPLE WHO ARE ATTENDING THE CONVENTION.
IT AFFECTS EVERYBODY IN THE MARKET THAT DAY, RIGHT? EVERYBODY'S GOT TO PAY 37 BUCKS MORE FOR ROOM WHEN A CONVENTION IS IN TOWN.
SO THAT'S A REVENUE IMPACT ON THE LODGING MARKET, AND THAT'S, THAT'S, UH, RARELY COUNTED.
SO WE DIDN'T TAKE THESE DIFFERENT SWITCHES ARE HIGHLY STATISTICALLY SIGNIFICANT DIFFERENCES, AND WE DO THE MULTIPLICATION.
UH, AND SO THE OCCUPANCY IMPACT IS ABOUT 26 MILLION.
AND THE INCREMENTAL ROOM REVENUE IS ABOUT 32 MILLION, UH, OF INCREMENTAL ROOM RUN.
SO, SO YOU'VE GOT ABOUT 58 MILLION OF REVENUE IN THE DOWNLOAD HOTELS.
THAT'S ABOUT 7% OF THEIR ANNUAL RULE EVIDENT.
SO, UH, AN ADDITIONAL 7% YET ON ANNUAL ROOM OF DOWNTOWN IS REALLY SIGNIFICANT.
UM, SO THAT'S, TO ME, THIS IS A MUCH, IT AVOIDS THIS ERROR OF COUNTING, TRYING TO COUNT IT, AND IT REALLY GIVES YOU, UH, A RESULT THAT YOU CAN HAVE A LOT OF CONFIDENCE IN THAT THIS IS REALLY HAVING A SIGNIFICANT IMPACT.
SO THIS IS ONE OF THE WAYS WE'VE TRIED TO IMPROVE ECONOMIC IMPACT.
UH, THE, THE THING WE'VE DONE, WE'VE DONE THIS IN SAN DIEGO AND SOME OTHER CITIES AS WELL, AND WHERE WE HAVE A RICHARD DATASET WHERE WE HAD A DATA SET ON THE ENTIRE CITY LIKE SAN DIEGO, WE HAD SEVEN DIFFERENT, UH, UH, SUB-MARKETS OF HOTELS.
AND IT, IT'S AMAZING WHAT YOU SEE WHEN YOU DO THIS ANALYSIS, BECAUSE LIKE YOU WOULD EXPECT THAT DOWNTOWN HAS BEEN BIGGEST EFFECT BY FAR, BUT THAT, THAT EFFECT RIPPLES INTO EVERY SUB-MARKET WITHIN CITY.
AND IT GETS SMALLER AND SMALLER AS THE FARTHER YOU GO AWAY.
BECAUSE WHEN SOMEONE TRYING TO GET A HOTEL IN DOWNTOWN, OR IT'S TOO EXPENSIVE FOR THEM, THEY GO TO THE NEXT NEAREST MARKET AND THAT COMPRESSES TO THE NEXT MARKET.
AND SO, UH, I TH WHAT WE FOUND IN SAN DIEGO WAS THAT OUTSIDE OF DOWNTOWN, THERE WAS, I THINK, LIKE 30% MORE OF THE IMPACT WAS DOWNTOWN.
SO THIS IS AN UNDERSTATEMENT OF THE IMPACT THAT THE CONVENTION CENTER IS HAVING A ROOM REVENUES THROUGHOUT THE CITY.
UH, IT'S SMALLER AND MORE DISTANT SUB MARKETS, BUT IT'S, IT'S VERY LIKELY TO BE SIGNIFICANT.
AND, UH, SO MY VIEW IS THAT INSTEAD OF TRYING TO COUNT LITTLE BLOCKS, YOU KNOW, DEEMOS BECAUSE I SAID, I SHOULD FORGET THAT.
AND JUST COLLECT THE RICH DATA.
YOU NEED SUBSCRIBE TO STR CAREFULLY TRACKER EVENTS, DO THIS ANALYSIS, AND YOU WILL KNOW WHAT IMPACT YOUR HABIT.
SO, UH, UNFORTUNATELY THAT'S NOT A COMMENT NECESSARILY.
UH, IT'S KIND OF BECOMING A MORE WHY, WHY THEY TRACKED THIS INDUSTRY, BUT IT SHOULD MORE THAN I THINK AUSTIN SHOULD ACTUALLY, UH, UH, START COLLECTING DAILY DATA ON THE S ON THE CITY AS A WHOLE.
SO YOU CAN DO THIS KIND OF ANALYSIS AND MORE EFFECTIVELY MEASURE YOUR IMPACT.
UM, SO, UM, UM, AND ALSO, I WANT TO TALK ABOUT KIND OF BEYOND THE SPENDING MODEL OF IMPACT.
WHY, WHY DO YOU WANT TO BUILD IT FROM ITS FIRST DOSE? SO I THINK ABOUT WHY WE BUILD OTHER HARD INFRASTRUCTURE, LIKE, UM, LIKE HIGHWAYS, YOU KNOW, WE, WE BUILD THEM BECAUSE IT GETS PEOPLE FROM POINT A TO B TO ECONOMIC NECESSITY AND IMPROVES ECONOMIC EFFICIENCY, RIGHT? WE DON'T MEASURE THE VALUE OF A HIGHWAY BASED ON WHAT TRUCKERS SPEND AT GAS STATIONS OR AT RESTAURANTS ALONG THE WAY, OR ON HOTEL NIGHTS, THAT DOESN'T FACTOR INTO THINKING ABOUT A HARD INFRASTRUCTURE.
WHEN WE BUILD A SEWER SYSTEM, WE DON'T THINK ABOUT, YOU KNOW, SITE SPILLOVER EFFECTS, WHAT WE'RE TALKING ABOUT.
SO, AND LIKE HARD INFRASTRUCTURE CONVENTION CENTERS ARE WHAT I WOULD CALL SOCIAL INFRASTRUCTURE, AND THIS IS NOTHING NEW.
UM, AND WHAT THEY REALLY FOSTER IS EXCHANGE OF INFORMATION.
IT'S A CENTER OF COMMERCE, UH, IT FOSTER SOCIAL INTERACTIONS, AND THAT'S WHY THEY'RE BUILT.
THEY'RE NOT BUILT FOR SPILLOVER EFFECTS.
THEY'RE BUILT TO FOSTER WHAT GOES ON INSIDE OF THEM.
SO, AND THIS IS NOTHING NEW, YOU KNOW, THE
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ANCIENT GREEKS HAD IT, UH, THE ANCIENT ROMANS HAD IT EVERY, EVERY MAJOR CENTER OF COMMERCE AND EVERY MAJOR CITY IN THE WORLD, WESTERN CIVILIZATION HAD THESE KINDS OF FORMS, RIGHT? SO IT'S NOTHING NEW AND THEY DIDN'T ASK HOW MUCH THEY WERE SPENDING, UH, UH, AT THE SHOPS AT THE FORUM WHEN THEY BUILT THEM.AND, AND THROUGHOUT MOST OF THE WORLD TODAY, THEY DON'T ASK THAT QUESTION EITHER.
THEY ASKED, UH, LIKE IF CHINA, THEY WANT TO BUILD A CENTER, THEY SAY, OH, JUST THE VERSION INDUSTRY.
YOU NEED THE CONNECTICUT CENTER.
IT NEEDS THAT WE'RE GOING TO BUILD IT, BUT THEY DON'T, YOU KNOW, IT'S TRUE IN EUROPE WHERE THEY DON'T, THEY FUND THEM OUT, THEY DON'T FUND THEM FROM LOGIC TAXES.
THEY DON'T DO THAT KIND OF SPILL OVER EFFECT ANALYSIS.
THEY KNOW THESE ARE IMPORTANT TO THEIR ECONOMY, THEIR NATIONAL ECONOMY, OR THEIR CITY ECONOMY, SO DEVELOPMENT.
UM, SO I WANT TO GIVE YOU AN EXAMPLE OF, OF THE KIND OF EFFECT THAT, UH, CONVINCE CENTERS CAN HAVE WITH A REALLY EXTREME EXAMPLE THERE.
AND THIS IS, UH, A STORY OF, UH, CONFERENCES THAT OCCURRED AT, UM, THE SILVERWARE CONFERENCE CENTER IN MONTEREY, CALIFORNIA.
THEY WERE HELD IN 19 74, 19 75.
UM, AND, UM, THERE WAS A UNIVERSITY LAW, UH, UH, PROFESSOR AND BIOLOGISTS GOT TOGETHER.
AND THIS WAS A TIME WHEN, UH, BIOTECH RESEARCH WAS IN ITS INFANCY, DNA AND RESEARCH WAS IN ITS INFANCY.
AND THEY JUST HAD LEARNED ABOUT GENE SLICING, AND EVERYONE WAS VERY AFRAID OF THIS TECHNOLOGY.
THEY, UH, UH, COULD, YOU KNOW, I DON'T KNOW IF YOU REMEMBER THE MOVIE UNGODLINESS STRAIN, UH, UH, YOU KNOW, FREAK OUT, I'LL JUST CREATE THIS.
SO JEREMY, THAT KILLS EVERYBODY THAT WAS IN HERE, RIGHT? SO IN 1974, THEY MET AND THEY SAID, THIS IS A BIG CONCERN.
WE'RE WE, WE THINK THAT WE SHOULD SHUT DOWN ALL KINDS OF DNA RESEARCH.
AND IN 1975, ABOUT 140 SCIENTISTS, BIOLOGISTS CAME BACK, THEY HAD LAWYERS THERE, THEY HAD MEDIA MEMBERS THERE AND THEY HAD THESE KNOCK-DOWN DRAG-OUT FIGHTS, AND THEY DETERMINED THEY CREATED A SET OF GUIDELINES, WHICH EVENTUALLY WERE ADOPTED AT, AS FEDERAL REGULATIONS FOR THIS KIND OF RESEARCH.
UH, AND IT WAS BASICALLY THE BIRTH OF THE BIOTECH INDUSTRY.
UH, AND SO WE, IF THIS HADN'T HAPPENED, WE WOULDN'T HAVE MAPPED THE GENOME, AT LEAST NOT AS QUICKLY, WE WOULDN'T HAVE MAPPED THE HUMAN GENOME WITHOUT FOLLIES.
WE WOULDN'T HAVE HAD EM, RNA VACCINES AS QUICKLY AS WE DID DURING COVID.
UH, SO WE MAY INDIVIDUALLY, WE ARE ALL INDIVIDUALLY AFFECTED PERSONALLY, BY WHAT HAPPENED HERE.
I'D LIKE TO SET IT FOR AN EXISTING FUND, OUR OWN HEALTH AND WELLBEING HAS BEEN WE'RE FONDLY AFFECTED BY THIS.
SO, I MEAN, THIS IS A PRETTY EXTREME EXAMPLE, BUT LET ME ASK YOU, WOULD YOU ASSESS THE VALUE OF THAT CONFERENCE BASED ON HOW MUCH THE ATTENDEES SPENT ON LODGING AND ON, UH, ON FRUIT AND BEVERAGE OR ON OTHER SPENDING, IT'S NOTHING COMPARED TO WHAT HAPPENS.
AND I THINK FOR EVERY EVENT THAT OCCURS IN AUSTIN OR OTHER CONFERENCES, THERE'S A STORY LIKE THIS, WHETHER IT'S QUILTERS OR COMIC-CON, OR, OR, UH, THE ASSOCIATION OF TEACHERS, THERE ARE STORIES OF STUFF THAT COMES OUT OF THESE CONFERENCES THAT AFFECTS PEOPLE'S LIVES VERY PROFOUND WAYS.
SO, YOU KNOW, THERE'S A LOT OF BENEFICIARIES THERE'S, YOU KNOW, WHO READS THE BENEFITS OF HOW THERE'S ATTENDEES, THERE'S EXHIBITORS, THERE'S ORGANIZERS, THERE'S THE DESTINATIONS AND THERE'S SOCIETY AS A HOME.
SO ATTENDEES, YOU KNOW, IT'S, IT'S EDUCATION EXHIBITORS DO IT, LOTS OF SALES, UH, YOU KNOW, BUSINESS, UH, BUSINESSES GROW AND ADVANCE, UH, DESTINATIONS BRAND THEMSELVES.
UH, SO THERE'S NOT NECESSARILY A GOOD MATCH BETWEEN A LOCAL GOVERNMENT AND ALL OF THESE BENEFITS, BUT THAT'S REALLY WHY THEY'RE BUILT.
SO I, I ENCOURAGE THE CLIENTS TO THINK ABOUT CONVENTION CENTER INVESTMENT MORE BROADLY THAN GETTING INTO THIS, UH, KIND OF NARROW FOCUS ON, UM, SPILLOVER EFFECTS.
I THINK I, I DON'T KNOW HOW TO QUANTIFY THIS AND IT'S IMPOSSIBLE TO QUANTIFY IT, BUT I THINK, UH, THERE ARE SO MANY STORIES OF SOCIAL, SOCIETAL BENEFIT AND INDIVIDUAL BENEFITS COME OUT OF THESE THAT SHOULDN'T BE OVERLOOKED.
[00:30:01]
OF THEM ACCRUED OF RESIDENTS OF AUSTIN, THEY CREATE TO THE DESTINATION AS A WHOLE, AND THEN THEY SPREAD IT OUT.SO, UH, I JUST WANT TO LEAVE YOU WITH THAT AS A CON, AS A OVERALL REFLECTION ON HOW I THINK ABOUT THE BENEFITS OF BENCHES CENTERS AND, UH, UH, AND HOW I HOPE THAT IN THE INDUSTRY, WE START THINKING MORE BROADLY ABOUT THE REAL PURPOSE OF THESE, UH, OF THESE THINGS.
AND SO WITH THAT, I'LL STOP SHARING AND WE CAN OPEN UP TO A Q AND A THANK YOU, TOM.
THAT'S CERTAINLY A DIFFERENT PERSPECTIVE.
SO, UH, DO WE HAVE ANY QUESTIONS FOR, UH, UM, AT ALL PRESSURE? UH, I SAID, UH, RACHEL.
UM, GOOD AFTERNOON, MR. ZINSKY APPRECIATE YOU BEING HERE TO SPEAK TO US.
UM, I'LL ASK YOU A COUPLE OF THE SAME QUESTIONS I ASKED PROFESSOR SANDERS, UM, AND THAT IS IF, AND PERHAPS YOU'LL BE, YOU'LL BE BETTER AT IT THAN HE WAS SINCE IT'S A QUESTION ABOUT YOUR WORK PRODUCT.
AND SO CAN YOU, CAN YOU GIVE US REFERENCES TO REPORTS THAT YOU'VE DONE ON CONTRACT WHERE YOU'VE PREDICTED INCREASED ROOM RATES, EXCUSE ME, A CERTAIN NUMBER OF INCREASE IN A ROOM NIGHTS ASSOCIATED WITH THE PROPOSED CONVENTION CENTER EXPANSION, AND THEN THAT EXPANSION TOOK PLACE AND YOUR PROJECTED ROOM NIGHTS, UH, WERE ACTUALLY MET? UH, YES, I CAN.
UM, I THINK NASHVILLE IS A GOOD EXAMPLE WHERE WE WERE SIGNIFICANTLY UNDERESTIMATED, WHAT THAT IMPACT WAS.
UH, I HAVEN'T GONE BACK AGAIN.
I HAVE TO GO BACK AND DO THE KIND OF STUDY THAT I SHOWED YOU TO BE PRECISE.
IF, IF, IF, UH, I WERE TO GO BACK AND SAY, HOW MANY, HOW MANY, UH, ROOM BLOCKS PICKUPS DID YOU COUNT? UM, THAT'S NOT GOING TO GIVE ME THE ANSWER, RIGHT? SO IF SANDERS IS SHOWING YOU THAT DATA, THAT'S NOT THE ANSWER.
UM, BUT WHAT HAPPENED IN AUSTIN IN NASHVILLE'S, UM, YOU KNOW, THE MUSIC CITY CENTER WAS DEVELOPED BASICALLY, UH, IN A AREA ADJACENT TO DOWNTOWN.
SO THE GULCH, WHICH IS PRETTY MUCH FUNDED, HELPED, IT WAS DONE IN A TOURISM DEVELOPMENT ZONE AND ALL THAT TO HIM, THIS DEVELOPMENT ZONE, UH, WAS, UH, HAD A SALES TAX TIP ON IT.
SO, UM, OUR ESTIMATES OF WHAT THE TIFF WOULD GENERATE, UH, THAT WAS ABOUT 25% OF WHAT THE ACTUAL GENERATING.
IT JUST BLEW UP BEYOND ANYONE'S EXPECTATIONS.
SO I WAS PRETTY OFF ON THAT, BUT OFF ON THE DOWN SIDE, UH, BIG TIME.
UM, SO THAT'S ONE WHERE IT CERTAINLY EXCEEDED NOW, IF, IF, IF I WERE TO DO THIS STUDY AND YOU LOOK AT ALL THE HOTELS THAT VINCENT WAS FEEDING, IT ACHIEVED ITS ATTENDANCE ESTIMATES THAT ACHIEVED ITS OCCUPANCY ESTIMATES.
IT DID VERY WELL, UH, AS A CONVENTION CENTER SO MUCH SO THAT DURING COVID, THEY WERE, THEY WERE THE ONES THAT HAD SOME REALLY FUNNY THAT THEY PROVIDED TO THE REST OF THE CITY.
SO A VERY BIG SUCCESS STORY THERE.
UM, BUT IT'S HARD TO GIVE YOU PRECISE ANSWERS ON EACH, BUT AS I SAID, I HAVE TO GO BACK AND LOOK AT WELL, UH, DID THIS NET IMPACT, UH, WE ESTIMATED IS THAT THAT HAPPENED.
YOU'D HAVE TO GO BACK AND DO ANOTHER ANALYSIS OF WHAT THAT IMPACT, UH, WHAT, WHAT YEAR WAS THAT NASHVILLE STUDY? YOU'RE REFERENCING, OH, JUSTIN, MY MEMORY, UM, IT WAS 20, UH, IT WAS COMING OUT OF THE GREAT RECESSION.
SO I THINK IT WAS, IT WAS, IT WAS THE EARLY, UH, UH, 20 12, 13, SOMETHING LIKE THAT.
I HAVE TO LOOK IT UP TO GIVE YOU THE EXACT, BUT IT'S BEEN AN OPERATION.
UM, 2012 AND I COULD I'LL LOOK IT UP AND GIVE YOU AN EXACT ANSWER TO WHY I'M SITTING HERE.
UM, AND THEN MR. SANDERS DID PROVIDE US SOME ROOM NIGHTS, UM, FROM THE MUSIC CITY CENTER IN NASHVILLE FOR 2014
[00:35:02]
THROUGH 2019.AND IT SHOWS A SIGNIFICANT JUMP BETWEEN 2014 TO 20 15, 270 3000 TO 390,000.
BUT THEN IT'S BASICALLY FLAT TO DECLINING FROM 2015 TO 2019.
DO YOU HAVE ANY DISPUTE WITH THOSE NUMBERS? WELL, YEAH.
AND LIKE I SAID, THAT'S THE KIND OF THE FULL CENTER.
AND I WAS TALKING ABOUT BEFORE THAT THEY'RE TRYING TO CALL LOGS, TECHNOLOGY'S CHANGING PEOPLE BOOK, UM, AND THAT WAR OR THE NIGHTS, AND I STARTED BOOKED OUTSIDE THE BLOCK.
UH, SO THOSE NUMBERS AREN'T REFLECTIVE OF WHAT THE IMPACT ACTUALLY IS.
THAT'S SO WITH THIS BIG, UH, UNCERTAINTY AROUND NUMBERS BOOKED OUTSIDE OF THE BLOCK, THEN YOUR PROJECTIONS ARE, ARE THEREFORE SIMILARLY UNCERTAIN AND THEY'RE, THEY'RE LOW, LOWER THAN YOU'D SAY THEY WOULD BE.
IF YOU COUNT IT OUTSIDE THE BLOCK, IS THAT WHAT YOU'RE SAYING? OH, I'M SAYING, WELL, WE PROJECTED WOULD INCLUDE WHAT MIGHT BE BOOKED OUTSIDE THE COUPON.
SO IF OUR NUMBERS TO ROOM BLOCK, THEY'RE ALWAYS GOING TO BE HIGHER THAN BLOCK ALWAYS GO BECAUSE THAT'S NOT WHAT WE PROJECTED.
SO OTHER THAN THE NASHVILLE STUDY, CAN YOU THINK OF ANY ONE OF YOUR OTHER STUDIES WHERE ROOM NIGHTS PER YEAR ROOM NIGHT PROJECTIONS, UH, ON A PROPOSED EXPANSION WERE ACTUALLY MET? UM, I, I THINK THEY GENERALLY ARE MET.
I, UM, I HAVE TO GO BACK AND I WOULD HAVE TO GO BACK INTO EACH ONE OF THOSE STUDIES AND THEN THEY GO BACK AND SAY, OKAY, UH, LET'S GO BACK INTO THE MARKET AND DO THIS ANALYSIS AND SEE WHAT THE NET IMPACT IS.
UM, THE UNFORTUNATE THING IS THOSE NUMBERS AREN'T READILY AVAILABLE.
SO I CAN'T GO IN AND STUDY IT RIGHT.
TO SEE WHAT THE DIFFERENCE IS.
YOU JUST CAN'T, YOU KNOW, FIND A NUMBER ONLINE AND SAY, THAT'S IT, YOU GOT TO STUDY IT.
UM, YOU KNOW, SO I, I CAN ONLY TELL YOU ONES THAT, YOU KNOW, HAVE MET WITH, YOU KNOW, REALLY GOOD SUCCESSES.
UM, MILWAUKEE HAS BEEN PRETTY SUCCESSFUL.
WE DID THE ORIGINAL STUDY THERE.
UM, AND, UM, THEY'RE EXPANDING NOW AND, UM, UH, WE'VE DONE, LITERALLY, WE'VE DONE MANY, MANY OF THESE STUNTS.
UM, BUT AGAIN, IF SOMEONE COMES ALONG AND SAYS, OH, IT DOESN'T MATCH, YOU KNOW, BLOCK NUMBERS, JUST SAY, OF COURSE IT DOESN'T BECAUSE THEY'RE NOT THE SAME DOMES.
SO YOUR MOST RECENT PROJECTIONS FOR ROOM NIGHT GENERATION FOR THE, THE AUSTIN CONVENTION CENTER EXPANSION THAT'S BEING LOOKED AT NOW THAT JUST SO WE'RE CLEAR, THAT INCLUDES BOTH IN THE BLOCK AND OUTSIDE THE BLOCK.
IS THAT CORRECT? THAT'S CORRECT.
AND WHAT PERCENTAGE OF YOUR, THAT IT ALSO THE ONES THAT, LIKE I SHOWED YOU IN THE ALSO SHOW, TRY TO CONSIDER WHAT MIGHT BE DISPLACED.
SO THAT'S IMPORTANT TO CONSIDER, IS THIS NOT ON THE RIGHT? IF YOU DISPLAY SOME OF BUSINESSES, I'M NOT SURE I'M FOLLOWING YOU THERE ON DISPLAY.
SO LET'S SAY, UM, I'M A HOTEL HERE AND A FITNESS CENTER COMES TO ME AND I'VE GOT A 500 ROOM HOTEL.
WILL YOU GIVE ME, UH, 350 AND MIRRORED ROOMS FOR THIS EVENT FOR BEING STAYS.
THOSE ARE THEN TAKEN OUT OF INVENTORY.
SO INDIVIDUALLY TRANSIENT CAN'T STAY IN THOSE ROOMS. OTHER GROUPS CAN'T STAY IN THOSE ROOMS. SO YOU ARE ACTUALLY HAVING, YOU KNOW, YOU KNOW, THERE'S A NET NEGATIVE EFFECT.
SO NOW THOSE PEOPLE WILL GO TO OTHER HOTELS, THERE'LL BE IN THE MARKET.
SO, BUT ESPECIALLY FOR GROUP BUSINESS, THERE COULD BE AN ACTUAL EFFECT OF DECREASING DEMAND IN THE MARKET WHEN YOU HAVE A CONVENTION EVENT THAT OTHERWISE WOULD BE THERE.
SO THAT'S WHY WE DO THE STATISTICAL ANALYSIS BECAUSE IT SETS IT, OKAY, THIS IS WHAT IT DOES.
AND YOU CAN TAKE INTO ACCOUNT ALL THAT PUSHING AROUND A BUSINESS THAT MIGHT OCCUR FOR THAT.
AND IN YOUR RECENT REPORT FOR THE AUSTIN, UH, EXPANSION THAT WE'RE LOOKING AT, UM, I DON'T RECALL YOU EXPLAINING WHAT PERCENTAGE OF THE PROJECTIONS WAS IN THE BLOCK
[00:40:01]
VERSUS OUTSIDE THE BLOCK? UH, NO, DIDN'T, WE DIDN'T DO THEM.SO EVEN THOUGH YOU DIDN'T WRITE IT INTO THE REPORT, CAN YOU TELL US ROUGHLY WHAT THAT PERCENTAGE BREAKOUT IS? I DON'T HAVE THE LITTLE BLOCK NUMBERS IN MY HEAD VERSUS WHAT WE CHECKED IT, SO I HAVE TO GO BACK AND I COULD, I COULD WORK ON.
AND THEN, OKAY, SO THIS, AND THEN THIS PHENOMENON OF DISPLACEMENT THAT YOU WERE JUST TALKING ABOUT, UM, IS IT YOUR ASSUMPTION THAT THOSE DISPLACED ROOM NIGHTS ARE JUST SHIFTED TO OTHER HOTELS OR DO PEOPLE ACTUALLY GO SOMEWHERE ELSE? UH, IT'S NOT.
I THINK IT'S BY AND LARGE WHEN THEY SHIFTED TO OTHER HOTELS, BUT THERE'S ALSO A RATE EFFECT, RIGHT? SO IT MAY BE THAT SOMEONE SEES THAT HIGH RATE FOR THAT DATE, IF IT'S THAT I'M NOT GOING TO, I'M NOT BOOKLET, I'M GOING TO PUT MY TRIP OFF FOR A WEEK.
SO THERE COULD BE SOME, UH, ELASTICITY OF DEMAND AS, UM, AS A PRICE EFFECT AND IT COULDN'T PRODUCE DEMAND.
SO THAT'S A PHENOMENON THAT COULD HAPPEN.
SO, UM, I WILL, WHEN YOU DID THE STATISTICAL ANALYSIS, YOU'RE DOING IT ON SORT OF THE NET NUMBERS, RIGHT? SO I DON'T, IT'S NOT GOING TO BE ABLE TO TELL ME HOW MUCH IS, YOU KNOW, THE, FOR TRAIN, SAME DEMAND, WHICH WAS FOOD TO THE EDUCATING.
I, I, I CAN OFFER THAT IS CAPTURED IN THOSE NUMBERS, BUT IN HIS ESTIMATES, BUT I DON'T KNOW WHAT SHARE OF THE OVERALL ESTIMATES THEY ARE.
SO THE ONLY THING I COULD PROVIDE TO YOU WOULD BE MAYBE A COMPARISON OF WHAT THE ROADBLOCK COUNTS ARE TO WHAT WE THINK THE ACTUAL IMPACT DEMAND IS.
UM, AND AGAIN ALSO, YOU KNOW, AND THAT, ISN'T THE ONE, IN FACT HERE IS IT'S AVERAGE DAILY ROOM RATE, RIGHT? YOU'RE DRIVING MORE MONEY INTO THE MARKET BECAUSE EVERYBODY'S PAYING MORE, RIGHT.
SO THAT'S LIKE A BIGGER EFFECT THAN THE OCCUPANCY.
SO I, I DON'T THINK, I THINK, I THINK THE FOCUS ON NEW BLACK AND THE NEXT IS KIND OF, IT SHOULD BE FOCUS, SHOULD BE ON REVENUE, ADDITIONAL REVENUE THAT'S GENERATED AS A RESULT OF THE CONVENTION, I THINK, TO THE MARKET.
AND IF NOT, IT'S HARD TO KNOW, YOU KNOW, OBVIOUSLY BRAYDEN DEMAND ARE CLOSELY RELATED, THE HIGHER, THE RATE RADICALLY LESS DEMAND, RIGHT.
UH, SO, YOU KNOW, YOU'RE TRYING TO, YOU KNOW, OPTIMIZE WHAT KIND OF RENT EACH HOTEL IS TRYING TO OPTIMIZE THIS MIX OF RATE AND THE MAN.
I THINK THAT'S SHOULD BE THE OBJECTIVE OF WHAT THE I CENTERS OPTIMIZING RATE, UH, OVERALL REV PAR OR REVENUE PER AVAILABLE ROOM OR OPTIMIZE, UH, INCREASE ROOM REVENUE IN THE MARKET RATHER THAN BODIES.
IF THE CUSTOMER ADDED NOT ONE NEW BODY, BUT INCREASED RATES A LOT, WE WOULD, IT WOULD HAVE A GREAT EFFECT, RIGHT? SO THAT'S NOT WHAT HAPPENS, BUT, UH, THAT I THINK THE FOCUS SHOULD BE ON REVENUE AND NOT ON, UH, NOT, UM, IN TERMS OF WHAT THE NEW PACK WAS FUNCTION.
UM, IT SOUNDS ALL QUITE MUSHY.
UM, AND THAT'S A CHALLENGE ACROSS THE, YEAH, IT'S KIND OF BLOCKING IT.
IT DOESN'T WATCH IT BECAUSE, YOU KNOW, IT TAKES AN ECONOMIC PERSPECTIVE TO WRITE.
SO, SO TO TRY TO CLARIFY FURTHER WHERE YOU MIGHT DISAGREE WITH PROFESSOR SANDERS, UH, LOOKING AT THE INDUSTRY AS A WHOLE, DO YOU HAVE ANY DISPUTE WITH THE FACT THAT THE SUPPLY OF CONVENTION CENTER SPACE IS, UH, HAS BEEN GREATLY EXPANDING AND IS, LOOKS LIKE IT'S GOING TO KEEP DOING THAT IN THE YEARS AHEAD? OH, WELL, YEAH.
I HAVE A DISAGREEMENT ABOUT THAT.
FIRST OF ALL, I, I DO AGREE AT ONE POINT THAT IT'S OVERBUILT THE MARK, THE MARKETS A BIT IS OVERBLOWN.
IT HAS BEEN FOR A LONG TIME AND THEN WILL CONTINUE TO BE, AND THAT'S BECAUSE OF THE WAY WE EAT IN THIS COUNTRY DECIDE HOW TO BUILD THESE SOLID FAMILIES.
SO, UH, WHEREAS IN OTHER SMALLER COUNTRIES, YOU KNOW, IT'S NATIONALLY CONTROLLED IN TERMS OF WHAT YOUR SUPPLY OF COMMITS SPACES HERE LOCALLY CONTROLLED.
SO YOU'VE GOT, YOU'VE GOT DIFFERENT CITIES COMPETING WITH EACH OTHER AND EACH ONE HAS THEIR OWN.
[00:45:01]
AND ARE SEEKING THOSE BENEFITS.SO IT'S LIKE, UM, YOU KNOW, THE CONCEPT OF PRISONER'S DILEMMA, BUT THAT'S KIND OF WHAT IT IS LIKE.
UH, UM, SO, UM, SO YEAH, SO IT'S OVERBUILT, BUT, UM, WHAT, WHERE I DISAGREE IS, UM, IS WHETHER THE INDUSTRY IS DECLINING OR GOING AWAY BECAUSE THE SANDERS HAS BEEN SAYING THIS FOR SINCE THE NINETIES INDUSTRIES.
I, UH, AND YOU'RE NOT GOING TO NEED IN-PERSON MEETINGS ANYMORE THAT I, I STRONGLY DISAGREE WITH BECAUSE THE EVIDENCE ISN'T THERE TO SUPPORT THAT NOTION.
UH, AND WHAT I, I, I DID LOOK AT THE SLIDES YOU SENT YOU LIKE HE, CHERRY PICKED SOME, UH, THINGS LIKE THINGS THAT WERE HAPPENING AT MCCORMICK PLACE, LIKE WITH, IN CHICAGO, WITH THE REAGAN LOGIC SOCIETY, OR SOME OTHER EVENT CES IN LAS VEGAS.
AND WHAT HAPPENED DURING COVID THAT HAS, AS MY MOTHER WOULD SAY THAT, WHAT DOES THAT HAVE TO DO WITH THE PRICE OF TEA IN CHINA? I MEAN, IT HAS NOTHING TO DO WITH WHAT, WHAT HAPPENED IN AUSTIN, RIGHT? THOSE LAS VEGAS, ORLANDO, CHICAGO, THEY'RE IN A WORLD OF THEIR OWN, THEY HAVE THEIR OWN EVENTS.
UH, AND THE TRENDS OF ATTENDANCE OF THOSE ARE NOT RELEVANT TO WHAT'S GOING ON IN AUSTIN.
SO, UH, I THINK WHAT WE WANT TO LOOK AT IS THAT FIRST TIER MARKETS RIGHT BELOW THOSE THREE BIGGIES AND WHAT'S HAPPENED, AND THAT'S THE NUMBERS I WAS SHOWING YOU EARLIER WAS THAT THERE WAS, THERE'S BEEN A RATHER RAPID RECOVERY FROM LIKE IT, AND FROM BEING AT 10 TO 15% OF WHAT THE MARKET WAS AT THE LOW OF COVID WHEN FINISHED FROM SHUT DOWN TO BEING SOMEWHERE AROUND 70% NOW WITH THE EXPECTATION THAT HIS COMPANY, THE VAN IS COMING AND GOING TO BE COMING BACK TO 19 MONTHS IN A COUPLE OF YEARS.
SO, UM, SO IF YOU SEE RECENT DOWNWARD TRENDS THAT REFLECT COVID, THAT'S NOT RELEVANT.
SO, AND I THINK THAT'S WHAT I DIDN'T LISTEN TO THE PRESENTATION.
I THINK THAT'S WHAT HE WAS SHOWING YOU.
AND IT'S KIND OF ON WHAT DOES THAT HAVE TO DO WITH ANYTHING IT'S NOT, IT'S NOT REALLY RELEVANT TO WHAT'S GOING ON.
SO I THINK A BETTER TO RELY ON ACTUAL RESEARCH AND INDUSTRY DATA.
AND, UH, THAT'S WHAT I LOOK AT.
SO DO YOU, DO YOU HAVE DATA SHOWING THAT THE OVERALL CONVENTION INDUSTRY IS ACTUALLY INCREASING OVER LONG TERM? NOT JUST BOUNCING BACK SOME FROM THE PANDEMIC TO GET APPROACH WHERE IT WAS PRE PANDEMIC? CAUSE THE, THE, THE DATA I'VE SEEN SHOW THIS UP AND DOWN, AND THAT, THAT I HAVEN'T SEEN ANYBODY PRESENT A GRAPH THAT DISAGREES WITH THE GRAPH THAT, THAT SANDERS PRESENTED SHOWING, YOU KNOW, IT WAS GOING UP AND THEN WE HAD THE.COM BUST AND IT WENT DOWN AND THEN IT CLIMBED BACK UP, AND THEN WE HAD THE OH EIGHT BUST AND IT CRASHED BACK DOWN, AND THEN IT CAME BACK UP AND THEN IT WAS FAIRLY FLAT GOING INTO THE PANDEMIC.
YOU'VE JUST DESCRIBED A MATURE INDUSTRY THAT MOST OF THE ECONOMY, UM, UH, THE NEXT THING WE HAVE AS TYPES OF EVENTS HAVE CHANGED AS, UH, YOU KNOW, MEDICAL INDUSTRY BECAME MORE PROMINENT.
SO IF YOU LOOK AT IT BY SECTOR, YOU SEE SOME DECLINE, SOME GROWING, UM, SO IT'S, IT MOVES THE GAP.
UM, THAT ARTICLE INVITED YOU CAN, THERE IS AN OLDER ANALYSIS OF THAT AND HOW IT RELATES TO GDP, A KIND OF LAGS CHANGE IN GDP, UH, IN TERMS OF WHAT THAT ATTENDANCES.
UM, SO, UM, UH, IT WILL GO UP AND DOWN.
UM, JUST LIKE THE ECONOMY DEATHS.
SO, UM, YEAH, I, I DON'T SEE AT A CLIENT.
I, I DO THINK THERE ARE SOME CONCERNS ABOUT THE IMPACT OF COVID ON THE INDUSTRY, BUT THOSE CONCERNS I THINK, ARE MORE TARGETED TO SMALLER GROUP EVENTS AND NOT LARGER.
SO, UM, LIKE IN PRE COVID WORLD, I MIGHT HAVE ACTUALLY BEEN DOWN THERE SITTING IN FRONT OF YOU, RIGHT.
SO I THINK FOR MEETINGS OF, UM, SMALLER GROUP MEETINGS, UM, LIKE THERE'S A BUSINESS WHERE MEETINGS THAT OCCUR PRIMARILY IN HOTELS, SMALLER CONFERENCE CENTERS.
I THINK THAT THIS USE OF TECHNOLOGY THAT WE DID DURING COVID WILL HAVE AN EFFECT.
UM, AND, UM, AND THE SO FAR THE DATA SHOWS THAT THAT KIND OF CORPORATE TRAVEL IS REALLY LAGGING AND COME BACK.
SO IT MAY NOT EVER GET TO WHAT IT WAS.
SO THAT, THAT DOESN'T REALLY AFFECT, UH, CONVENTION CENTER EVENTS, WHERE YOU HAVE, UH, ASSOCIATIONS THAT ARE, UM, LIKE THAT'S PART OF THE MARKET AWESOME NATIONAL ASSOCIATIONS, RIGHT? SO THEY, UM, UH, THESE, THESE ORGANIZATIONS WANT TO GET THEIR PEOPLE TOGETHER AND IN PERSON, AND THEY
[00:50:01]
HATE HYBRID EVENTS, HYBRID EVENTS ARE KIND OF GOING AWAY.THAT'S THE THING WAS IN THAT SURVEY DATA THAT I SHOWED YOU EARLY IN THAT I DIDN'T, I DIDN'T SHARE WITH YOU, BUT THEY ASKED THEM ABOUT HYBRID DEFENSE, BUT THEN AREN'T GOING TO SAY THAT THEY'RE WAY TOO EXPENSIVE.
IT'S NOT SATISFYING EXPERIENCE.
SO THEY WANT PEOPLE BACK HERE.
UM, SO, UH, THE QUESTION, SO THE SUSTAINING THAT HAPPENED, THE QUESTION IS WHETHER THE ATTENDEES WEALTH OF A TRAVEL AND SO THAT ATTENDING DATA SHOWS YES.
MORE AND MORE PEOPLE ARE WILLING TO TRY IT.
SO I THINK THE ASSOCIATION INDUSTRY IS GOING TO COME BACK, WHICH IS VERY RELEVANT TO AUSTIN.
SO I DEFINITELY HAVE A DISAGREEMENT WITH SANDERS ON THAT.
I THINK, I THINK HE JUST STARTS WITH A HYPOTHESIS AND SORT OF CHERRY PICK STEPHEN AND SEE IF HE COULD VERIFY IT.
BUT I TWO MORE QUESTIONS, BUT IF ANYBODY ELSE WANTS TO JUMP IN, FIRST ON, I'VE BEEN SORT OF HOLDING THE FLOOR HERE.
AND WHEN YOU'RE FINISHED, I HAVE A COUPLE OF QUESTIONS MYSELF.
I'M NOT SURE IF JOHN OR YOU HAVE ANY QUESTIONS, BUT GO AHEAD.
UM, SO, UM, WHAT ABOUT CLIMATE CHANGE? UH, I THINK A LOT OF COMPANIES, A LOT OF ASSOCIATIONS ARE GOING TO BE UNDER SOME REAL PRESSURE TO REDUCE THEIR, UH, GREENHOUSE GAS EMISSION FOOTPRINT, AND OBVIOUSLY AIR TRAVEL, ESPECIALLY LONG DISTANCE AIR TRAVEL IS A HUGE, UH, HAS AN ENORMOUS FOOTPRINT.
HAVE YOU LOOKED AT, OR ARE YOU AWARE OF ANY PUBLISHED REPORTS THAT LOOK AT HOW CLIMATE CHANGE MAY REDUCE PEOPLE TRAVELING FOR MEETINGS OR CONVENTIONS? YEAH.
WELL, TELL YOU WHAT MY THINKING ON THAT IS THAT NO, NO.
I BELIEVE CLIMATE CHANGE IS A REAL THREAT, BUT IT'S A THREAT TO THE ECONOMY IN GENERAL.
UM, AND I, I THINK THE BIGGER CONCERN WITH CLIMATE CHANGE IS THAT IT DEPRESS GDP GROWTH AND THAT WILL BE REFLECTED IN ATTENDANCE AT CONVENTIONS.
UM, I DON'T KNOW THAT IT'S SO SPECIFIC TO WILLINGNESS TO TRAVEL AND WILLINGNESS TO HOLD THESE EVENTS THAT I HAVEN'T SEEN A MUCH ABOUT.
THERE IS A LOT OF CONCERN IN THE INDUSTRY ABOUT IT, AND THERE ARE A LOT OF, UH, SUSTAINABLE PRACTICES BEING IMPLEMENTED AT A NEW DEVELOPMENT OF NEW CONVENTION CENTERS.
IT SAYS SUSTAINABLE COMPONENT.
LIKE I WAS JUST IN PITTSBURGH A FEW WEEKS AGO.
THEY WERE THE FIRST LEAD CERTIFIED CONVENTION CENTER AND THEY'RE GROWING ALL THEIR FOOD AND THE ROOF THERE.
IT REALLY IS AMAZING HOW MUCH THEY PAID ATTENTION TO THAT AND KIND OF AHEAD OF THE CURVE AND THAT'S HAPPENING MORE IN THE INDUSTRY.
SO IT'S CERTAINLY THE INDUSTRY, BUT I, I THINK THE THREAT OF CLIMATE CHANGE IS ONE.
I DON'T HAVE A GOOD HANDLE ON PERSONALLY BECAUSE I, YOU KNOW, IT, IT, I, I READ ABOUT IT AND I READ ABOUT WHAT EFFECTS IT MIGHT HAVE AN OVERALL GDP OF SIMILAR, BUT THAT'S PRETTY FAR REACHING, BUT I THINK THAT'S THE REAL CONCERN IS LET'S LET'S, UH, IF, IF WE'RE GONNA, UH, YOU KNOW, YOU KNOW, REDUCE, UH, OUR OUTPUT BECAUSE OF FIND THAT CHANGE WHERE THERE'S AGRICULTURE OR OTHER INDUSTRIAL OUTPUT, THEN, UH, THEN, UH, THAT WILL AFFECT THE INDUSTRY.
SO OUR REPORTS, WE ALWAYS DISCUSS RISK FACTORS AND THAT'S ONE OF THEM.
WE DISCUSSED THAT, GIVEN THAT WE DON'T HAVE ANY GOOD PROJECTIONS OF WHAT EFFECT IT'S GOING TO HAVE ON THE OVERALL ECONOMY.
UH, WE JUST SAY, THIS IS A RISK AND YOU NEED TO BE AWARE OF IT.
SO AS THAT, IF, IF MORE INFORMATION BECOMES NO ONE WHERE WE CAN GET SOME KIND OF REASONABLE THAT ARE JUST LIKE WILDLY SPECULATIVE ESTIMATES, WE MIGHT START INCORPORATING THAT INTO OUR, I WANT TO SPLIT THIS POINT.
THERE'S SO MUCH SPECULATION AND IT'S, IT'S REALLY HARD NOW.
SO I THINK IT'S MY LAST QUESTION.
ALTHOUGH I'M GUESSING I'LL COME UP WITH OTHERS.
IF, IF THIS CONVERSATION CONTINUES A WHILE, BUT JUST I, AS I THINK YOU SAID EARLIER TODAY, AND AS I READ YOUR REPORT, YOU'RE NOT NECESSARILY SAYING EXPANDING THE CONVENTION CENTER, THE WAY WE'RE LOOKING AT IT IS THE RIGHT THING TO DO WITH OUR HOTEL TAX REVENUE.
AND SO YOU'RE NOT, YOU'RE NOT IN ANY WAY ADDRESSING ESSENTIALLY THE OPPORTUNITY COSTS THAT WOULD GO INTO COMMITTING TO BUILD AND OPERATE THE CONVENTION
[00:55:01]
CENTER FOR ANOTHER 30 YEARS OVER THE PERIOD OF DEBT FINANCING VERSUS INVESTING THAT SAME AMOUNT OF MONEY OR DOING SOME DRASTICALLY SCALED BACK, SAY FIXING UP THE ONE WE'VE GOT, FOR EXAMPLE, AND SHIFTING THAT MONEY INTO SUPPORTING CULTURAL TOURISM.YOU'RE NOT, YOU'RE NOT COMMENTING ON THAT IN ANY WAY, IS THAT CORRECT? WE ARE NOT, WE ARE NOT COMMENTING ON THAT.
UM, BUT THAT IS, UH, BUT I DO THINK THAT, YOU KNOW, IF YOU'RE GOING TO COMPARE THIS TO INVESTMENT, TO CULTURAL TOURISM, UM, YOU DEFINITELY HAVE TO THINK MORE BROADLY, BUT ISA IMPACT BECAUSE YOU'RE TALKING ABOUT THE SAME EFFECTS, RIGHT? LIKE ALL FOR TOURISM, YOU KNOW, SOCIETAL IMPACTS AND BENEFITS.
AND SO WHEN YOU IT'S AN IMPRECISE THING, BUT WHEN YOU'RE MAKING THAT DECISION, I WOULD THINK YOU WANT TO THINK ABOUT WHAT THIS DOES FOR THE CITY AS A WHOLE, NOT JUST FOR CHALLENGERS OR RETAILERS, WHAT DOES IT DOES, DOES FOR THE COMMUNITY AND IN TERMS OF ENRICHING LIFE AND SO ON.
AND SO IF I WERE IN YOUR SHOES, I THAT'S, I WOULD WEIGH IT, BUT YOU'RE RIGHT.
YOU'VE, THERE ARE ANY NUMBER OF OTHER INVESTMENTS THAT YOU MIGHT MAKE WITH THIS MONEY AND THEY HAVE THEIR OWN BENEFITS.
AND, UH, IS, UH, THAT'S A CHOICE THAT WE W ARE WADING INTO AS OUR ROLE IS TO SAY, OKAY, IF YOU MAKE THIS CHOICE, THIS IS WHAT IT MEANS FOR YOU.
UM, UH, SAY IT'S A BETTER CHOICE THAN SOMETHING ELSE OR A WORST JUSTICE SINCE THIS IS SEEING THE SUPPORT, WHAT NEED, AND THAT NOW ALSO ENCOURAGING YOU TO THINK MORE BROADLY ABOUT WHAT IT MEANS, IF NOT, JUST IN TERMS OF SMELL EFFECTS, CAN WE GET YOUR BUNCH, ANY YOU'RE YOU'RE GOOD FOR, FOR, I THINK I'VE DONE.
MR. BAILEY, DID YOU HAVE SOMETHING OR DID YOU, UH, RACHEL, OKAY.
RACHEL, ANYTHING BEFORE I JUMP IN COMMISSIONER, MEET MEIJI.
I THINK MY INTERNET, CONNECTION'S NOT GREAT.
I KEEP YOU'LL KEEP FREEZING, WHICH I KNOW MEANS THAT I'M ACTUALLY THE ONE FREEZING.
UM, I JUST WANTED TO THANK YOU FOR YOUR PRESENTATION AND, AND REALLY FOR THE REMINDER TO BE THINKING MORE BROADLY, UM, THAT REALLY RESONATED WITH ME.
AND I LIKED YOUR STORY ABOUT, UH, YOU'RE LETTING US KNOW THAT THERE'S A CONVENTION CENTER FIRST LEAD CONVENTION CENTER THAT IS, UM, EVEN, UH, GROWING FOOD.
I HEARD YOU SAY ON THE ROOF, WHICH IS AN AMAZING CONCEPT TONIGHT.
AND, YOU KNOW, I'M, I'M PERSONALLY EXCITED ABOUT THE FACT THAT WE HAVE AN OPPORTUNITY, UM, BEFORE US, UM, TO IMPROVE THE CONVENTION CENTER, NOT JUST, YOU KNOW, IT'S, IT'S THE SPACE, YOU KNOW, THE MEETING SPACE, UM, AND, YOU KNOW, MAKING SURE IT DOESN'T LEAK ANYMORE OR THAT KIND OF THING, BUT THAT WE CAN IMPROVE IT IN A WAY WHERE WE BRING SOMETHING OF VALUE TO OUR COMMUNITY IN, IN THOSE BROAD TERMS THAT YOU WERE SPEAKING ABOUT.
UM, AND MUM THING, NOT THE SORT OF BROAD CONCEPTS THAT, THAT PERSONALLY AFFECTS ME AND, AND, UH, THE FOLKS THAT I REPRESENT, WHICH IS WHY I KEEP MENTIONING IT.
UH, BUT I DON'T SEE A LOT IN PRESENTATIONS IS THE BROAD CONCEPT OF, YOU KNOW, UM, EMPLOYING LOCAL PEOPLE, NOT JUST THE PEOPLE THAT, YOU KNOW, WORK AT THE CONVENTION CENTER TO MAINTAIN IT EVERY DAY AND MAKE IT OPERATE EVERY DAY AND TO MAKE SURE IT'S SECURE, BUT ALSO ALL THE NUMBERS OF LOCAL PEOPLE THAT, UM, ARE EMPLOYED, UH, YOU KNOW, ON A, UM, GIG TO GIG BASIS OR PART-TIME, OR FULL-TIME THAT SERVICE, THOSE EVENTS FOR THE, UH, ATTENDEES, UM, THAT, UH, YOU KNOW, THE FOLKS THAT ATTEND THOSE EVENTS OR THE FOLKS THAT ORGANIZE THOSE EVENTS, UM, AND, YOU KNOW, THAT'S SOMETHING I DON'T THINK I SAW THAT IN YOUR PRESENTATION IN THERE WAS THAT ONE SLIDE AT THE END THERE WHERE YOU HAD THE DIFFERENT STAKEHOLDERS.
AND TO ME, THAT THAT'S A PIECE THAT STILL SEEMS TO BE MISSING THAT WE'RE NOT TALKING ABOUT IS, YOU KNOW, WHAT IT GIVES BACK TO THE COMMUNITY IN TERMS OF EMPLOYING FOLKS THAT LIVE HERE AND THEN SPEND THEIR MONEY HERE AND PAY THEIR TAXES HERE.
WELL, YEAH, I DIDN'T SHOW IT ON THE SCREENING, BUT IN OUR REPORT, YOU'LL SEE A JOBS BEST TO A FULL-TIME PARENT.
SO THAT'S STILL THAT, THAT IS THERE.
UM, AND, UH, UH, I, I, I DO THINK IT'S REALLY IMPORTANT COMPONENT WITH THE KIND OF CIVIC
[01:00:01]
THINGS.SO TOM, I, I HAD JUST A COUPLE OF COMMENTS.
ONE IS, YOU KNOW, YOU MENTIONED THE RADIOLOGICAL SOCIETY CONVENTION IN CHICAGO EAST TO RUN DURING THE NINETIES, UH, THE THREE BIG HILTON HOTELS THERE, PALMER HOUSE, CHICAGO HILTON O'HARE HILTON.
AND IF I REMEMBER CORRECTLY, IS IT THE RADIOLOGICAL RIGHT AFTER THANKSGIVING? SO EVEN IF IT WAS EVEN, IT WAS DOWN A LITTLE BIT, THAT WAS A HUGE BOOM FOR THE HOTELS.
I MEAN, IT WAS HUGE BECAUSE THAT TIME, THAT TIME PERIOD IS USUALLY A DEAD TIME FOR US.
UH, THE OTHER THING I'D LIKE TO MENTION IN, IN, FROM A HOTELIER'S PERSPECTIVE IS THAT WHEN YOU SHOWED THAT, UH, AVERAGE ROOM RATE, THE ADR THAT SMITH'S TRIAL RESEARCH, UH, BROUGHT TOGETHER FOR YOU ON YOUR ANALYSIS, I MEAN, $31 MILLION, I DON'T KNOW HOW MUCH YOU UNDERSTAND THAT THAT'S, THAT'S NOT JUST, YOU KNOW, UH, REVENUE THAT'S, THAT'S LIKE EBITDA THAT GOES TO THE BOTTOM LINE.
THAT'S AN INCREASE IN THE BOTTOM LINE OF A HOTEL, WHICH IS A GIGANTIC AMOUNT OF MONEY.
I LIKE TO ALSO JUST TALK ABOUT DISPLACEMENT BECAUSE THAT CAME UP AND IT SEEMED A LITTLE BIT CONFUSING.
I, AND YOU CORRECT ME IF I'M WRONG.
WHAT YOU'RE LOOKING AT IS, AS YOU WERE SAYING, HOTELS, REVENUE MANAGER, JUST THE NAME OF THE GAME, REV PAR INDEX SMITH, TRIAL RESEARCH.
I MEAN, THOSE ARE OUR BREAD AND BUTTER AND THAT'S OUR BIBLE.
AND WHEN YOU'RE LOOKING AT A HOTEL AND YOU, AS YOU SAID, YOU DON'T KNOW IF YOU HAVE A THOUSAND ROOM HOTEL, YOU'RE NOT GOING TO GIVE A CONVENTION, A THOUSAND ROOMS. SO YOU GIVE HIM 750 ROOMS, WHICH MEANS YOU ARE DISPLACING SOME OF THOSE ROOMS, OTHER AVENUES.
AND BASICALLY WHAT HE'S TRYING TO GET INTO HIS ANALYSIS IS HOW MUCH OF THAT DISPLACEMENT REALLY AFFECTS THE OVERALL, UH, UH, CITY.
AND WHAT HE'S SHOWING TO ME WAS THAT DISPLACEMENT IS OFFSET BY THE GIGANTIC JUMP IN ADR.
I MEAN, THAT'S A BIG, THAT'S A BIG NUT TO COME UP WITH OVER THAT TIME PERIOD.
AND AS A HOTELIER, I, I WOULD LOOK AT THAT ALL THE TIME.
AND THE OTHER THING I WOULD ALSO MENTION TO TOM TOO, AND JUST IN GENERAL FOR US IS THAT, YOU KNOW, I, I WAS VERY, VERY FORTUNATE IN THAT I NOT ONLY RAN HOTELS, I BECAME ONE OF THE TOP EXECUTIVES FOR HILTON.
AND WHEN WE WERE LOOKING AT VARIOUS BUDGETS FOR PEOPLE, THE COOL THING IS, IS THAT, YOU KNOW, THE, THE, UH, THE UNITED STATES BUDGET IS, HAS, IT HAS A DIFFERENT, IT'S NOT A YEAR TO YEAR, JANUARY TO DECEMBER.
SO WE GOT TO KNOW WHAT THE FORECAST WAS FOR THE GDP, FOR THE UNITED STATES BEFORE WE ACTUALLY FINISHED OFF OUR BUDGETS.
AND IT'S UNBELIEVABLE HOW CLOSE THE S THE HOTELS REPRESENTED, UH, THE UPS AND DOWNS OF THE GDP WHEN THE GDP WAS DOWN, IF THEY LAG BY ABOUT PROBABLY SIX TO NINE MONTHS IN SOME RESPECTS, DEPENDING ON WHETHER YOU'RE GOING UP OR DOWN, BUT YOU, YOU, YOU COULD SEE THE DIRECT CORRELATION BETWEEN THE GDP AND THE HOTEL ON THE STREET SPOT ON.
AND SO I JUST WANT TO MENTION THAT THE QUESTION I HAVE FOR YOU THOUGH, AND I THINK THIS IS THE CULMINATION OF IT ALL, UH, QUITE FRANKLY, FOR ME ANYWAYS, IS YOU PUT OUT YOUR REPORT AND, YOU KNOW, YOU DID ALL YOUR STATISTICAL ANALYSIS.
AND I, I HAD NEVER HEARD OF THAT ANALYSIS BEFORE THE WAY YOU DID IT.
AND I THOUGHT THAT WAS AN EXCELLENT BOOK TO LOOK AT, BUT, UH, MY QUESTION IS, IS ANY, AND AGAIN, BECAUSE THE STATS I SOUGHT ON THE, UH, ON THE, UH, STUFF THAT'S, YOU KNOW, OUTSIDE THE ROOM BLOCKS, I SAW 38 TO 45%.
SO IT WAS VERY, VERY CLOSE TO WHAT YOU WERE MENTIONING.
BUT MY QUESTION IS, IS WHAT IS YOUR CONFIDENCE FACTOR? WHAT IS YOUR PERCENTAGE CONFIDENCE FACTOR ON THE NUMBERS THAT YOU GAVE GIVEN THAT EVERYTHING IS EQUAL? WE ALL KNOW IF WE GO INTO RECESSION A WHOLE DIFFERENT BALL GAME, IF THERE IS ANOTHER MONKEY POX OR WHATEVER POX OR WHATEVER DIFFERENT BALL GAME, BUT IF EVERYTHING WAS EQUAL AND EVERYTHING WAS GOING ALONG SMOOTHLY, WHAT IS YOUR CONFIDENCE FACTOR ON THE NUMBERS THAT YOU PUT UP? YEAH, WELL, UM, THAT'S, THAT'S A REALLY GOOD QUESTION.
I, I, I DON'T HAVE A HARD NUMBER ANSWER FOR YOU, BUT I CAN GIVE YOU SOME IDEA.
AND WHEN WE DID, I WOULD SAY MY CONFIDENCE IS HIGHER NOW THAN IT WAS WHEN WE DID THE NUMBERS, BECAUSE WE ARE KIND OF UNDERSTANDING WHAT COVID RECOVERY LOOKS LIKE.
SO, UM, UH, I, YOU KNOW, I WOULD BRACKET 10 TO 20% OUT OF THE NUMBERS, UH, HIGH INVOLVED.
I DON'T THINK THAT'S UNREASONABLE, UM, BECAUSE YOU KNOW, SO MANY VARIABLES.
UM, YEAH, IT'S A FAIRLY WIDE RANGE, UM, UH, WHATEVER.
AND THIS IS IN THAT ECONOMIC IMPACT ARTICLE THAT I SHOWED YOU WHENEVER YOU'RE MAKING ASSUMPTIONS, THAT LAYER ON OTHER ASSUMPTIONS, LIKE, OH, THIS IS HOW MANY ATTENDEES GET, THIS IS HOW MANY ROOM NICER YOU, YOU'RE MAKING LAYERS OF ASSUMPTIONS.
IF YOU MAKE A MISTAKE AT THE TOP, IT GETS EXAGGERATED DOWN.
SO THAT'S WHY, UH, THAT'S WHY I WOULD SAY, YOU KNOW, I DON'T GO 10 TO 20% OF ARGUMENT SENSITIVITY ANALYSIS.
THAT'S WHAT I LOOK AT IN A 20%.
VERY, UH, SWEET PAUSE, BUT JUST IT JUST AS A BALLPARK
[01:05:01]
ANALYSIS.HI, I'M MR. HAS SINSKEY, I, I, COULDN'T NOT TAKE THE OPPORTUNITY TO ASK SINCE YOU'RE WITH US AT, SINCE YOU ARE FAMILIAR WITH SO MANY OF THE NEW PROJECTS THAT ARE HAPPENING NOT ONLY IN, UH, IN THE COUNTRY, BUT PROBABLY INTERNATIONALLY YOU'RE IN, I'M INTERESTED IN YOUR INSIGHTS ON THE TYPES OF TRENDS OR THINGS THAT ARE HAPPENING WITH THE CONSTRUCTION AND BUILD OUT OF CREATING NEW CENTERS, THE TYPES OF THINGS THAT ARE KIND OF MAYBE LOOKING OBSOLETE OR THINGS THAT MIGHT'VE BEEN DONE 15, 20 YEARS AGO THAT WERE HAPPENING THEN, BUT YOU MENTIONED GROWING LEAD CERTIFICATION, YOU MENTIONED GROWING ON THE ROOF, CERTAINLY HAVING MORE, A LOWER CARBON FOOTPRINT AND PROBABLY MOST CENTERS ARE, TECHNOLOGY'S ALWAYS GOING TO BE AN ONGOING BATTLE TO STAY CURRENT WITH EXPECTATIONS OF CLIENTS FROM THAT STANDPOINT, BUT ARE THERE ANY OTHER KIND OF LIKE MACRO OR MICRO TRENDS THAT MAKE CONVENTION CENTERS SMARTER? AND SO IF WE'RE GOING TO DO SOMETHING THAT WE'RE PAYING ATTENTION TO SOME OF THE MOST SMART ACCOUTREMENTS AND CHANGES THAT MAKE THE CENTER MORE USABLE, UH, MORE COMPETITIVE FOR THE GROUP MEETING NEEDS AS YOU SEE THEM IN THE FUTURE.
I THINK THE TREND THAT WE'RE SEEING IN TERMS OF IMPROVEMENTS TO CONVENTION CENTERS IS NOT, THERE'S LESS EMPHASIS ON EXPANSION OF SPACE AND MORE EMPHASIS ON RECONFIGURATION AND IMPROVEMENT IN THE QUALITY OF SPACES.
AND IT'S BEEN A LONG, MANY DECADES TREND TOWARD THE NEED FOR MORE MEETING BREAKOUT SPACE OR FLEXIBLE MEETING BREAK GLASS SPACE.
UH, AND, UH, THAT IS CONTINUING, UH, SO THE RATIO OF LARGE EXHIBIT SPACE TO BT SPACE IN THE SPACES AND GROWING AS A SHARE OF THE TOTAL SPACE NEEDING INVOLVED SPACE.
UH, SO THAT'S ONE THING WE'RE SEEING, UM, IN IMPROVEMENTS, UM, AND, UH, THE OTHER, BUT THE LARGEST AREA OF INVESTMENT THAT WE'VE SEEN IS IN, UH, TECHNOLOGY, UH, AND THAT SORT OF INCREASING, UM, BANDWIDTH AND NOT JUST WIRELESS CELLULAR, UH, AND THAT'S A CONSTANT RACE TO REROUTE THAT BECAUSE THE EVENTS THEMSELVES ARE REQUIRING, UH, MORE AND MORE WHERE EVERYONE'S NOT BRINGING JUST ONE DEVICE TO THE EVENT THAT MIGHT NEED TWO OR THREE.
AND SO, UM, THAT IS A BIG, UH, I'LL TAKE FSS.
AND THAT'S ONE THING AUSTIN IS, UH, KIND OF AHEAD OF THE VERMONT AND I THINK, UM, BILLING ITSELF AS NOT GREAT, BUT, UM, THE, UH, THE TECHNOLOGY AND IT HAS BEEN GOOD, ESPECIALLY SINCE AUSTIN STONE IS A TECH HUB.
IT'S VERY IMPORTANT THAT THAT BE A PART OF THE INVESTMENT.
UH, AND THEN THE OTHER, UH, UM, I GUESS REALIZATION IS GOING ON THAT'S AFFECTING DESIGN, IS THAT WHAT PEOPLE REALLY VALUE ABOUT IN-PERSON MEETINGS IS THE RANDOMNESS OF IT AND THAT, UH, THE KIND OF SOCIAL INTERACTIONS THEY COULD HAVE ON AN ONLINE MEETING THAT NOT.
AND SO THEY'RE CREATING SPACES THAT FOSTER THAT KIND OF INTERACTION, AND, UH, THAT PLANNERS ARE RESPONDING TO THAT REALLY WELL.
SO THERE'S MORE AREAS FOR PEOPLE TO COME AND SIT DOWN AND TALK WITH EACH OTHER, AND THOSE KINDS OF BURDENS THAT ARE IN COMMON.
AND THEN AS I MENTIONED TO THEM, THE TREND TOWARD SUSTAINABILITY IS WRONG.
NOW IT'S DIFFERENT FOR EVERY CITY THOUGH.
LIKE, I THINK WHAT WE SAW IN AUSTIN IS A MISMATCH BETWEEN DEMAND AND MOBILE AND FACILITIES AVAILABLE.
SO THAT'S NOT TRUE OF A LOT OF CITIES, ESPECIALLY SOME SMALLER THIRD TIER CITIES.
THEY, THEY NEED TO IMPROVE JUST TO STAY WHERE THEY ARE.
THEN THAT'S TYPICAL OF A LOT OF SYNDROMES THAT ARE IN REALLY ATTRACTIVE MARKETS UM, BUT AUSTIN IS DIFFERENT THAN A LOT OF CITIES.
I THINK SAN DIEGO IS A LITTLE LIKE YOU, THEY L THEY HAVE 600,000 SQUARE FEET, UH, AND THEY, UH, IT'S NOT REALLY ALL THAT WELL CONFIGURED SPACE EITHER.
THEY JUST, THEY GOT A ROLE, NEW TAX POSITION OF NEW TECHS TO DO THAT.
UH, AND THERE, THERE WAS ALSO A MISMATCH BETWEEN WHAT THAT DESTINATION OFFERS AND WHAT COULD ATTRACT.
AND, UH, SO I JUST TO FOLLOW UP, YOU USE THE WORD EXPAND.
SO EXPANSION IS ALWAYS THE WORD
[01:10:01]
ATTACHED TO WE'RE EXPANDING, BUT YOU'VE JUST SAID THAT REALLY IT'S RECONFIGURATION, IT'S A, IT'S A RENOVATION, A RETHINKING OF HOW THESE CENTERS SERVE THE PURPOSE OF WHY THEY'RE BUILT.AND IT'S NOT THAT THEY'RE JUST, THEY'RE GETTING, OH, WE NEED A BIGGER ONE BECAUSE WE HAVE TO HAVE MORE SPACE, BUT IT'S ABOUT, WE HAVE TO HAVE IT RECONFIGURED IN SUCH A FASHION THAT IT, IT SERVES THE PURPOSE.
AND SO GETTING BIGGER, IT'S BIGGER, WE'RE GETTING BIGGER IS NOT ALWAYS THE RIGHT NOMENCLATURE.
IT COULD BE WHERE WE'RE SHARPENING OUR FOCUS, WHERE WE'RE BUILDING A SMARTER BUILDING.
WE'RE LEARNING HOW AND FOLLOWING THE TRENDS IN THE INDUSTRY.
AND I JUST, I'M JUST TRYING TO MAKE SURE I GET IT RIGHT IN MY HEAD BECAUSE THE CENTER EXPANSION IS THE WORD.
SO I WANT TO, IF IT'S NOT GETTING BIGGER, WE'RE GETTING, WE'RE RESHAPING IT AND WE'RE REFINING IT AND WE'RE RETOOLING IT.
THAT'S DIFFERENT THAN JUST MAKING IT BIGGER.
BUT THAT'S NOT WHAT I'M THINKING ABOUT, AUSTIN.
I THINK WHAT I COMMENT ON THAT, IT'S GENERALLY IT, INDUSTRY TRENDS ARE MOST CITIES HAVE ENOUGH SPACE, BUT I DON'T THINK THAT'S TRUE IN AUSTIN, YOUR FASTEST GROWING CITIES IN THE STATES.
UH, YOU HAVE AN INCREDIBLE, UH, CORPORATE PRESENCE THAT'S GROWING.
UH, AND YOU'VE GOT SOMETHING WAS BUILT 20 YEARS AGO.
SO IT'S NOT, I THINK IN AUSTIN, YOU NEED TO DO BOTH.
YOU NEED TO EXPAND AND YOU NEED TO CREATE IMPROVEMENTS THAT, UH, BETTER SERVE, UH, UH, NEEDING NEEDS TODAY.
UH, SO, AND I THINK, UM, YOU KNOW, WE, WE WEREN'T AT ALL ABOUT DESIGN, BUT WE DID REVIEW IT AND UNDERSTAND HOW IT WOULD WORK AND I'LL PUT COMPANY WHO MAY HAVE IT.
SO, AND ESPECIALLY WITH THE STRUCTURED FACING COMES ALL COMPLICATED EXERCISE.
BUT, UH, SO I, I'M NOT DISPUTING THAT YOU NEED ADDITIONAL SPACE IN BOSTON.
I THINK THAT'S, UH, IN OUR, IN ORDER TO MEET THE LEVEL OF DEMAND THAT IS AVAILABLE TO BE WHAT SPACE, AND IT'S NOT ABOUT GETTING BIGGER EVENTS, IT'S ABOUT DOING YOUR WITH 17.
SO YOU COULD HAVE WHEN MOVING IN ONE MONTH, WHEN WE GO OUT, I'LL TELL YOU YEARS, LOVE THAT TOO, BECAUSE THEN YOU WOULD SOUTH TO BAND.
BUT BEFORE WE, BEFORE WE, UH, STOP HERE, COMMISSIONER RONAN, I AM SO SORRY.
AND I KNOW YOU'RE ON THE WAY AND YOUR MIC IS OFF.
SO I'M NOT SURE IF THERE'S ANYTHING YOU WANT TO.
AND IT'S UP, IT'S IT'S OFTEN, CAUSE I I'VE JUST BEEN WAITING TO SPEAK.
SO WHENEVER WE'RE STOPPING, I HAVE TO BOARD THIS PLANE IN LIKE 10 MINUTES.
SO IF THERE'S A BREAK, THAT'D BE GREAT.
DID YOU, WAS THERE ANYTHING YOU WANT TO BRING UP? ANY QUESTIONS YOU HAD? UH, COMMISSIONER RON? YEAH.
I JUST HAD A COUPLE OF QUESTIONS AND, UM, A REQUEST REALLY.
UM, I GUESS I WOULD THANK YOU, UM, SO MUCH FOR YOUR COMING AND BRINGING THIS PRESENTATION TO THE BOARD TODAY.
UM, YOU KNOW, THERE ARE DEFINITELY DIFFERENT PERSPECTIVES WHEN IT COMES TO, UM, WHETHER OR NOT WE SHOULD EXPAND THE CONVENTION CENTER AND WHAT EXTENSION ACTUALLY MEANS.
UM, AND IT GETS INTO THE POLITICS OF ECONOMIC DEVELOPMENT, WHICH ARE MANY TIMES FRAUD.
I ACTUALLY LIVED IN CHICAGO FOR EIGHT YEARS, UH, JUST BEFORE MOVING TO AUSTIN IN DECEMBER.
SO I'M VERY FAMILIAR, UH, WITH MCCORMICK PLACE AND IT ACTUALLY WORKS IN THE VENTS THAT MY, MY SELF AND, UM, ONE THING THAT I, I WOULD LIKE TO REQUEST FORMALLY AND SEE IF WE MIGHT BE ABLE TO, UH, RECEIVE FROM YOUR FIRM ARE, YOU KNOW, YOU SAID, YOU'D HAVE TO LOOK AT THE NUMBERS TO GET A BETTER HANDLE ON WHETHER YOUR PROJECTIONS FOR CONVENTION CENTER EXPANSION, UH, WERE ACCURATE.
AND SO I, I WOULD LIKE TO SEE IF WE MIGHT BE ABLE TO GET THOSE, UM, THE RETROSPECTIVE LOOK AT YOUR RECOMMENDATIONS AND, UM, REALLY HELPED GROUNDS ARE COMMISSION A LITTLE BIT MORE, UM, IN TERMS OF THINKING ABOUT THIS ISSUE.
AND THEN I JUST THINK LASTLY, UM, I, I TAKE A LITTLE ISSUE WITH CALLING DATA CHERRY PICKS.
UM, IF THE PERSON WHO WE'RE TALKING ABOUT CHERRY PICKING THE DATA, THAT'S NOT HERE TO DEFEND HIMSELF OR THEIR SELF.
SO I JUST WOULD CAUTION I'M USING THAT TERM SPECIFICALLY IN THIS CONTEXT, UH, WITH THE POLITICS OF THE CONVENTION CENTER EXPANSION, UH, AND YOU KNOW, I REQUEST, YOU KNOW, THAT WE HAVE, UH, A REAL, UM, CONSTRUCTIVE DEBATE, UH, ABOUT THE MERITS OF WHETHER OR NOT TO EXPAND THE CONVENTION CENTER.
SO I JUST WANTED TO MAKE THAT COMMENT AND TO, UM, THANK YOU ONCE AGAIN FOR,
[01:15:01]
UH, COMING TO GIVE YOUR PRESENTATION TODAY AND SEE IF YOU MIGHT BE ABLE TO FULFILL THAT RESEARCH REQUESTS.DO YOU JUST WANT TO, I JUST WANT TO MENTION ONE OF THE, ONE OF THE REASONS WE HAD, UH, UM, MR. HAS ZINSKY HERE IS BECAUSE OF THE COMMENTS THAT OUR PREVIOUS PERSON MADE WITHOUT HIM BEING ABLE TO DEFEND HIMSELF TOO.
SO THAT'S WHY WE WANTED TO BALANCE THIS A LITTLE BIT PROMPT.
YEAH, I, I, IT WAS A BLIP COMMENT.
I BET THAT, UH, SO I, SORRY FOR THAT.
UH, BUT I, UH, ONE THING YOU MIGHT WANT TO READ, UH, I GUESS I COULD SHARE IT WITH EVERYONE ON THE CALL.
I DID WRITE, UH, A MORE FORMAL CRITIQUE OF THE BOOK THAT IT WOULD SANDERS ROADS, UH, AND, UH, PAUL CONFESS, SARAH FOLLIES.
AND, UM, THAT I THINK THOSE AREN'T GOING TO NOT CHANGED, NOT MUCH IT'S OLD, YOU KNOW, BECAUSE IT WAS, UM, YOU KNOW, CAN YOU REMEMBER WHEN HE WROTE THAT BOOK? UH, BUT, BUT THE WHOLE DEBATE REALLY HASN'T EVOLVED MUCH BEYOND THAT.
SO THAT MIGHT BE INFORMATIVE IF YOU WANT TO GET ROLLING, YOU WANT TO GET A BETTER FEEL FOR WHAT, HOW I FEEL ABOUT, UH, HIS APPROACH.
UH, MY, MY SENSE OF IT IS IT'S THAT IT'S, UM, UH, THAT THERE'S NOT A SYSTEMATIC ANALYSIS OF DATA.
AND THAT'S WHAT I WAS KIND OF TRYING TO GET OUT WITH THAT CON THAT IT USED TO BE MORE SYSTEMATIC BASELINE, BETTER SOURCES THAT WAS, BUT, BUT IT'S IN, IT'S ALL IN THAT IN AN ARTICLE I'M NOT DISMISSING HIM ALL AND HE MAKES SOME VALID POINTS AND, UM, THIS NOTION OF OVERBUILDING AND WHY IT HAPPENS, I THINK IS A BIT, I THINK HE TENDS TO ATTRIBUTED TO BAD MOTIVES AND CHOOSE BAD MOTIVES TO CONSULTANTS.
AND THAT'S NOT WHAT'S GOING ON, UH, LIKE CONSULTANTS MAKE A LOT OF ERRORS AND THEY'RE, THEY'RE NOT SU SAYERS.
THEY PREDICT THE FUTURE ACCURATELY ALL THE TIME.
THAT'S TRUE, BUT IT'S NOT LIKE THEY'RE NOT TRYING TO DO THEIR BEST TO GIVE THEIR CLIENTS ACCURATE INFORMATION.
SO, UH, I THINK THE KIND OF CHARACTERIZATIONS HE MAKES THEY'RE, THEY'RE, THEY'RE TIED INTO THIS OVERALL THEORY THAT IT'S THESE SPECIAL INTEREST GROUPS THAT'D BE LADING, BUT THEN PRIVATE PROCESS AND SOMETHING LIKE THAT, UH, THAT HE SAYS, UM, AND I, I DON'T THINK THAT'S FALLING.
I THINK, UH, YOU KNOW, CITIES THAT ARE DOING THIS HAVE GENUINELY INTERESTED IN THE ECONOMIC IMPACTS AND THE BENEFITS OF THEIR COMMUNITY CONSULTS ARE GENUINELY TRYING TO DO THEIR BEST TO FIGURE OUT WHAT THOSE ARE.
UH, AND, UH, IT'S NOT, THERE'S NOT BAD INTENTION OR BAD BEHAVIOR QUICK.
SO THAT, THANK YOU, COMMISSIONER REED, DO YOU HAVE A QUESTION? I'M SORRY.
I REALLY WANT TO GO BACK TO MY REQUEST.
UM, AND I, AND I'M GOING TO HAVE TO GO SOON HERE, BUT IS IT POSSIBLE FOR US TO GET SUBSTANTIVE RETROSPECTION ON THE NUMBERS OF THREE PREVIOUS CONVENTION CENTERS? CAUSE I WANT TO, YOU KNOW, SEE, I UNDERSTAND PEOPLE WANT TO DO THEIR BEST.
AND, YOU KNOW, I LIKE TO GO BACK TO THE GRANT, UH, RATHER TO MY CLIENTS FOR WHOM I WRITE GLENN FRANCE TO SEE IF I WON THE GRANT.
AND IF I DIDN'T WIN THE GRANT, WHAT DID WE DO THAT WE CAN IMPROVE UPON? RIGHT.
SO IS THERE SOME RESEARCH RIGHT NOW, IS THAT THE ANALYSIS THAT CAN HAPPEN THAT CAN ALLOW US TO SEE WITH THREE EXAMPLES IN THE COUNTRY, YOU KNOW, WHERE THOSE PROJECTIONS HAVE MET OR HAVE NOT BEEN MET, UM, EXPECTATIONS.
SO IS THAT SOMETHING YOU CAN PROVIDE US? I CERTAINLY CAPABLE OF, I WOULD HAVE TO TALK WITH A CLIENT KEY, CAUSE IT WOULDN'T BE A TRIVIAL EXERCISE.
AND SO I WOULD HAVE TO MAKE SURE THAT I HAVE APPROVAL TO DO THAT WORK.
UM, SO I MEAN, I, I THINK IT WOULD BE GOOD FOR YOUR FIRM, RIGHT? LIKE I THINK IT WOULD BE COST MONEY.
SO, BUT I MEAN, WE'RE, WE'RE SERIOUSLY TRYING TO INVEST THE MONEY AND MAKING SURE THAT WE'RE INVESTING IT IN THE, IN THE RIGHT PLACE.
AND AGAIN, THE OPPORTUNITY COSTS, I THINK HAS NO SMALL COSTS WHEN WE'RE TRYING TO MAKE THESE CRITICAL ECONOMIC DEVELOPMENT DECISIONS.
SO I REALLY APPRECIATE YOUR TIME AND, UH, UM, YOU KNOW, LOOK FORWARD TO A FUTURE RESPONSE ABOUT THOSE THREE EXAMPLES AND, UM, MEETING PROJECTIONS AND, AND I'M SORRY, BUT I HAVE TO RUN NOW.
HAVE A GOOD DAY COMMISSIONER REEDY.
[01:20:01]
MORE QUESTION.DO YOU, DO YOU WANT TO MAKE SURE WE HAVE TIME FOR DISCUSSION? CAUSE I HAVE A LOT OF POINTS TO MAKE ABOUT.
YEAH, JUST, UM, A CLARIFICATION.
I THOUGHT I UNDERSTOOD YOU TO SAY MR. SINSKEY THAT IN NASHVILLE THERE ROOM NIGHTS BLEW UP AND WENT WAY OVER YOUR PROJECTIONS.
THE DATA THAT MR. PROFESSOR SANDERS PROVIDED TO US INCLUDES, UH, AN EXCERPT FROM AN ADDENDUM REPORT YOU DID FOR NASHVILLE THAT PROJECTED, UM, 503,975 TOTAL ROOM NIGHTS DURING THE 2016 TO 2017 PERIOD.
AND THEN THE ACTUAL ROOM NIGHTS THAT HAPPENED IN THOSE YEARS BEING, UH, 359,000 IN 2016 AND 300 AND ROUGHLY 318,020 17.
SO THAT'S SHOWING WAY QUITE A BIT OF UNDERPERFORMANCE FROM YOUR PROJECTIONS.
SO COULD YOU HELP ME UNDERSTAND THAT? YES MA'AM.
CAN WE CHECK WITH THE BYLAWS THAT NOW THAT WE'VE LOST COMMISSIONER RONAN, WE'RE NOW NOT A QUORUM.
ARE WE ALLOWED TO CONTINUE QUESTION MARK? I THINK YOU'RE RIGHT.
SO, UH, NOW THAT WE DO NOT HAVE A QUORUM, I THINK YOU WILL, UH, NEED TO THANK MR. HIS SINSKY FOR HIS PRESENTATION AND, UH, WE NEED TO CONCLUDE OUR MEETING, CORRECT.
UH, MS. MEIJI, I DON'T HAVE THE BYLAWS IN FRONT OF ME.
DOES FELICIA HAS THE BYLAWS IN FRONT OF HER? SHE'S LOOKING DESPERATELY RIGHT NOW.
YEAH, WE AT OUR, IF ANY OTHER CONDITIONER HAS THEIR BYLAWS, WE SHOULD JUST CHECK.
I'M NOT SAYING IT'S ONE OR THE OTHER, BUT WE SHOULD VERIFY BEFORE WE CONTINUE.
AND IF IT TRANSPIRES THAT WE HAVE TO ADJOURN NOW, BECAUSE WE'VE LOST OUR QUORUM, I WOULD ASK IF, UM, UH, MR. HAYES HAS CNC WOULD BE ABLE TO JOIN US AGAIN SO THAT WE CAN CONTINUE.
I SEE THAT COMMISSION A BUNCH HAD HAD ANOTHER QUESTION.
I'M SURE OTHER COMMISSIONS HERE MIGHT WANT IT TO HAVE CONTINUED.
AND WE DO HAVE, YEAH, WE CAN ALSO SEND THEM A QUESTION IF WE NEEDED TO, BUT FELICIA WOULD SAY ACCORDING TO FELICIA, HE CAN ANSWER THE QUESTION.
WHAT WAS THE QUESTION AGAIN? I I'LL, I'LL TRY AND RESTATE IT.
THAT THERE ARE A SET OF NUMBERS THAT ARE SUBSTANTIALLY BELOW WHAT WE SAID WERE PROJECTED FOR NATIONAL FOR TWO YEARS.
I CAN'T REMEMBER WHAT THE YEARS WERE, BUT, UM, OKAY.
SO GOING BACK TO MY EARLIER DISCUSSION, UH, UH, WHAT I SAID IN TERMS OF WHAT BLEW UP WAS HOTEL DEVELOPMENT AROUND THE CONVENTION CENTER.
AND SO, UH, THE OVERALL IMPACT IN, IN URBAN DEVELOPMENT AND SO ON AND TRACKING ROOM NIGHTS, UH, EVEN IF IT WERE RELATED TO THE CONVENTION, EVENTS IS REALLY SUBSTANTIAL.
SO THAT'S, THAT'S WHERE WE WERE UNDERESTIMATING.
UH, WITH RESPECT TO THE NUMBERS YOU SIGNED IT.
I SUSPECT THAT, UH, I CAN'T SEE THEM THAT WHAT YOU'RE COMPARING OUR ROOM BLOCKS NUMBERS TO WHAT WE PROJECTED AND WHAT WE PROJECTED WERE GROSS NUMBERS.
THE REAL LOCK NUMBERS THAT WERE IN THE 300,000 RANGE WOULD BE WHAT WAS COUNTED.
UH, AND, UH, THAT'S NOT WHAT WE ESTIMATE, BUT WE ESTIMATED THE TOTAL.
SO IF YOU WERE, LET'S SAY YOU WERE TO ADD, YOU KNOW, 30% OUT OF THE BLOCK, UH, ESTIMATE ONTO THAT, YOU KNOW, THE NUMBERS WOULD BE AT LEAST MUCH CLOSER.
UM, SO I, UM, I, AGAIN, I WOULD HAVE TO LOOK AT THE NUMBERS SPECIFICALLY IN ORDER TO ANSWER THAT QUESTION AS TO WHAT THEY REALLY MEAN, BUT I SUSPECT THERE'S NOT, THERE'S AN APPLES AND ORANGES COMPARISON.
UH, MR.
AND, AND UH, IF WE DO HAVE ANY UP QUESTIONS, I'LL, UH, SHOOT THEM OVER TO YOU AS WELL.
I'LL SHARE THE INFORMATION THAT YOU SENT TO ME WITH THEM AS WELL, UH, THAT YOU BROUGHT UP.
[01:25:10]
UH, CORRECT, RACHEL.WE DO NEED TO ADJOURN BECAUSE TECHNICALLY YOU'RE NOT EVEN A, IS THAT WHAT FELICIA SAID? FELICIA HADN'T SAID ANYTHING YET? WELL, SHE SAID, IF I LOST THEM, I GOT THE BYLAWS IN FRONT OF ME HERE.
UM, I MEAN, MY EXPERIENCES, IF YOU'RE MORE THAN TWO PEOPLE, YOU COULDN'T, YOU'RE NOT SUPPOSED TO EVEN DO IT.
THIS BOARD MEETING SHALL BE GOVERNED BY.
I SAID, FOR A PUBLIC MEETING, IF IT WASN'T POSTED AS A PUBLIC MEETING, I WOULD AGREE WITH YOU.
WELL, I'M TALKING ABOUT COMMISSIONERS.
YOU'RE NOT SUPPOSED TO HAVE MORE THAN TWO COMMISSIONERS.
TALK ABOUT THE BUSINESS OF THE COMMITTEE.
THAT'S BEEN MY, MY EXPERIENCE, UH, UNLESS YOU HAD THE WHOLE QUORUM, BUT GO AHEAD, RACHEL, TAKE A LOOK.
IF YOU TELL ME WHAT THE, SO, UH, WHAT I SEE IN THE BYLAWS ABOUT MEETINGS IS BOARD MEETING SHALL BE GOVERNED BY ROBERT'S RULES OF ORDER.
I THINK ROBERT'S RULES OF ORDER SPEAKS TO WHAT HAPPENS IF YOU LOSE YOUR QUORUM IN A MEETING POSSIBLY.
ALTHOUGH I DON'T HAVE MY ROBERT'S RULES WITH ME RIGHT NOW.
UM, IT TALKS ABOUT SIX MEMBERS, CONSTITUTING, A CORUM.
UM, ALL OF A SUDDEN YOU COME TO STAFF MEETING WITHOUT A QUORUM.
I'M STILL LOOKING TO SEE FOLKS ABOUT IF THEY DON'T CONVENE WITHIN HALF HOUR, WE COULD POST A TINY FINE WITH THE MEETING.
THEN IT CANNOT BE HELD TO BE EFFECTIVE.
A BOARD ACTION MUST BE ADOPTED BY AN AFFIRMATIVE VOTE OF THE NUMBER OF MEMBERS NECESSARY TO PROVIDE A QUORUM.
SO IT MAY BE THAT WE COULD CONTINUE DISCUSSION, BUT WE CAN'T TAKE ANY ACTION.
I'VE SEEN THAT IN SOME BODIES WHERE WHEN YOU LOSE YOUR CORE AND YOU CAN TALK ALL YOU WANT, BUT YOU CAN'T TAKE ANY ACTION BECAUSE THERE'S NO, THERE'S NO ABILITY NOW FOR US TO VOTE, UM, ANY AFFIRMATIVE WITH, UH, WITH, WITHOUT HAVING A QUORUM.
UM, AND THAT MAY BE WHY, YOU KNOW, UH, WE NEED TO ADJOURN BECAUSE IF WE CAN'T TAKE ACTION, WE'RE JUST KIND OF LIKE TREADING WATER, RIGHT? WE'RE JUST, WE'RE JUST SPINNING OUR WHEELS.
I DON'T MIND HAVING DISCUSSION IF WE WANT TO DO THAT.
OR FOR THOSE PEOPLE WHO HAVE THE TIME TO DO IT, OCEANA CITIZENS, I'M JUST LOOKING DOWN AND SEE IF I SEE ANYTHING ELSE THAT JUMPS OUT AT ME.
WELL, I HAVE ROBERT'S RULES IF YOU HEAR FROM ME, BECAUSE I'M FASCINATED BY THIS.
OH, MY CHOICES ARE TO ADJOURN OR TO RECESS AND TRY TO ACHIEVE A QUORUM DURING THE RECESS.
SO THE CHOICE SOMEBODY CALL LOWE'S SOMEBODY FIND GREG.
UM, I MEAN, I HAVE A LOT OF COMMENTS TO SAY, BUT I DON'T KNOW IF IT'S USEFUL.
I WOULD JUST SAY THAT, UM, WHERE'S CANADY.
WHEREAS MR. CHAN AND THEN, YEAH.
WHERE IS EVERYBODY? UM, IT IS AUGUST.
SHOULD WE, SHOULD WE FORMALLY ADJOURN, BUT STILL HAVE OUR DISCUSSION? DO YOU WANNA DO? YEAH.
I MEAN, I'M PRESSING AGAINST MY OWN TIME NOW.
I'D LIKE TO CONTINUE THIS CONVERSATION MORE DEEPLY, BUT YOU KNOW, THE THING THAT FRUSTRATES ME IS THAT WE SPEND A LOT OF TIME TALKING ABOUT THE MAGICAL BENEFITS OF CONVENTION CENTERS.
WE DON'T REALLY TALK ABOUT THE COSTS AND WHAT STRUCK ME IS THAT ONE, THEY KEEP MOVING THE GOALPOSTS.
WHY DO THEY CONTINUALLY TOUT ROOM NIGHTS AND THEN TELL US, WELL, IT'S REALLY ADR THAT MATTERS, RIGHT? ALL THE STUDIES ROOM NIGHTS, ROOM NIGHTS, ROOM NIGHTS.
UM, HE TALKS ABOUT $58.2 MILLION IN INCREASED REVENUE FOR CORPORATE BUSINESSES FUNDED BY A $78 MILLION SUBSIDY TO THE CONVENTION CENTER.
HE SAID, THAT'S WHAT HE SPENT MOST OF THE BULK OF HIS TIME ON CORPORATE BUSINESSES.
BUT WHAT ARE HOTELS NOT WELL, HE'S TALKING ABOUT THE OVERALL IMPACT.
WELL, IF YOU'RE TALKING ABOUT THE REVENUE THAT WENT TO THE HOTEL, WE SPENT A BUNCH OF TIME TALKING ABOUT THE INCREASE THAT EXTRA $58 MILLION IN REVENUE FOR HOTELS THAT THE CONVENTION CENTER GENERAL CORPORATE MEETINGS.
NO, NO, I'M JUST SAYING, I JUST FEEL LIKE WE'RE ALWAYS TALKING ABOUT THE WRONG THINGS.
LIKE, I DON'T REALLY CARE IF THE HILTON MAKES MORE MONEY BECAUSE WE SPENT $78 MILLION TO SUBSIDIZE THE CONVENTION CENTER.
THE ONLY THING I WOULD SAY TO THAT IS IF THEY MADE THAT MUCH MORE MONEY, HOW MUCH MORE MONEY IN HOT TAX WOULD THERE BE FOR US TO SPEND? I MEAN, I MEAN, YOU'RE TALKING ABOUT ANOTHER $5 MILLION IN HOT TACK.
BUT I MEAN, WE, WE, WE DON'T REALLY EVER, AND HAVEN'T EVER REALLY ENGAGED IN THE FACT THAT IT'S A FACT THAT THE CONVENTION CENTER GENERATES ABOUT 3% OF HOT TAX.
AND IT'S A FACT THAT WE THEN GIVE THE CONVENTION CENTER OVER THREE QUARTERS OF THE HOT TAX THAT IS GENERATED BY MUSIC FESTIVALS BY PEOPLE JUST WANT TO GO TO SOUTH CONGRESS AND HANG OUT AND RENT A ROOM DOWN THERE AND SHOP.
[01:30:01]
FUNNEL IT ALL TO THE CONVENTION CENTER.AND I THINK THAT'S A ANTIQUATED OUT OF DATE, BUSINESS MODEL.
AND WE KEEP HEARING FROM PEOPLE WHO HAVE A VESTED INTEREST IN THAT MODEL LIKE THIS, HE SEEMS LIKE A GREAT GUY, BUT I MEAN, HE MAKES HIS MONEY DOING CONSULTING, RIGHT? TELLING PEOPLE HOW GREAT CONVENTION CENTERS ARE.
WELL, IF HE'S NOT ACCURATE, IF HE'S NOT ACCURATE, THEY'RE NOT GOING TO HIRE HIM.
AND QUITE FRANKLY, THAT'S NOT TRUE.
WELL, I DON'T SEE HOW HE CAN BE ACCURATE WHEN HE TELLS AGENDA THE OPPOSITE PEOPLE THAT SAY WHAT THEY WANT TO TELL ME.
PROFESSOR SANDERS DOESN'T HAVE AN AGENDA.
HERE'S A CONVENTION CENTER HE'S EVER MET THAT HE LIKED.
HE'S BEEN, HE'S BEEN DOING THE SAME THING FOR SURE.
I MEAN, I GET THAT, BUT LET'S ALSO SAY HE'S AN ACADEMIC.
HE DOESN'T MAKE MORE MONEY IF HE TRASHES CONVENTION CENTERS.
PARDON ME, BUT TOM MAKES MORE MONEY IF HE, ME, BUT HE DOES HE SEE THE BOOKS THAT HE'S WRITTEN? I DON'T KNOW.
WELL, I'M JUST SAYING, LOOK, I'M, I MEAN, I JUST, WE'RE NOT IN A MEETING ANYMORE.
I JUST THINK IT'S LIKE, OH, WE HAVEN'T ADJOURNED YET.
SO, OH, WELL LET'S ADJOURN MOVE TO ADJOURN.
I'VE LOST CONTROL OF THE MEDIA HERE.
WE'RE ADJOURNED AT, UH, AT 4 45.
I DON'T EVEN KNOW IF THAT NOTION WAS NECESSARY.
IF THE RULE, IF THE MEETINGS ARE GOVERNED BY ROBERT'S RULES AND THE CHOICE BY ROBIN'S RULES IS RECEIVED.