Convention Center Market and Demand Analysis Laredo, TX September Image Courtesy of Trahan Architects
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1 Convention Center Market and Demand Analysis Laredo, TX September 2017 Image Courtesy of Trahan Architects
2 HVS Study Tasks for Market and Demand Analysis 1. Traveled to Laredo to: a. Inspect the La Posada and meet with client representatives b. Tour the downtown Laredo and assessed potential convention center sites c. Visited selected hotel properties and met with hotel managers d. Interview key stakeholders including City and federal inspection service representatives 2. Reviewed the prior CSL convention center study a. Discussed report with CSL staff b. Interpreted event planner survey results 3. Conducted a convention center market analysis a. Market overview b. Assessed the hotel market c. Analyzed comparable and competitive convention centers 4. Provided a Convention Center Building Program Recommendations a. Appropriate amounts of rentable function space b. Support space requirements c. Integration with La Posada d. Revised program in coordination with Trahan Architects 5. Estimated Conference Center Demand DRAFT January 18,
3 Event Planner Survey Results (selected questions)
4 Experience with Laredo Has your organization ever held an event in Laredo? Yes 10% No 90% At what facility (or facilities) were your event(s) held at in the Laredo area? La Posada, Embassy Suites, Holiday Inn, Texas A&M, and the Civic Center. Are there any particular reasons why your organization is not likely to consider the Laredo area as a potential host destination/market for your event(s)? Concerns* Mentions Location/driving access 34% Airport access / need International airport 24% No membership/industry/corporate presence in area 17% Lack of familiarity 5% Hotel / Function space package 4% Destination/Market/Amenities 3% Sa fety/securi ty concerns 2% Other 10% *Source: CSL Survey as restated by HVS DRAFT January 18,
5 Event Type and Space Use Do you organize events that require dedicated exhibit space? Yes 54% No 46% Does ballroom or multipurpose space suffice for their exhibit needs? Yes 81% No 19% Respondents that require dedicated exhibit space needed an average of 18,000 square feet for an average of 180 booths. What types of recurring events does you organization produce? Event Type* Events Average Attendance Conference Convention & Trade Show Meeting Other Social Event Training *Source: CSL Survey as restated and categorized by HVS DRAFT January 18,
6 Net Promoter Score Event planners were asked to score their likelihood of rotating to Laredo for future events assuming a new convention facility with supporting hotel package fully met their event needs. Planners gave a score of 1 through five. 1 meaning Definitely likely, 2 - Likely, 3 - Possibly, 4 - Not likely, and 5 - Definitely not. Using these results, we calculated a net promoter score, which is the percentage of definitely yes and likely responses minus the percentage of not likely or definitely not responses. These results show limited demand for rotating events and a need to change perceptions of Laredo as a meeting destination. Positive 8.6% Negative -70.4% Net Score -61.7% *Source: CSL Survey as restated by HVS DRAFT January 18,
7 Comparable and Competitive Venue Analysis
8 Comparable Texas Venues Function Space DRAFT January 18,
9 Comparable Facilities with Adjacent Hotel Rooms Name of Venue Total Function Space (SF) Number of Hotel Rooms Function Space per Room (SF) Comparable venues with adjacent hotels McAl l en Conventi on Center 86, Wa co Conventi on Center 80, Galveston Island Convention Center 70, Embassy Suites Dallas - Frisco 54, Sa n Ma rcos Conference Center 39, Proposed Laredo Convention Center* 26, Overton Hotel a nd Conference Center 17, *Prior to expansion or addition of an adjacent hotel property. Sources: Respective Venues & HVS DRAFT January 18,
10 Concept Plan Capacities and Event Planner Needs
11 Estimated Exhibition Capacity = x 10 Booths *Source: CSL Survey as restated by HVS n = 44 DRAFT January 18, 2018 *Source: Trahan Architects 11
12 Banquet Capacity Survey Question: Do your events include one or more meal functions? Yes 92% No 8% MEAL FUNCTION ATTENDANCE BY TYPE Typical Meal Event Type Function Attendance Conference 319 Conventi on & Tra de Show 304 Meeti ng 254 Training 235 Social Event 300 Other 350 Meal Function Attendance Distribution 1, % 9% 16% 23% 30% 36% 43% 50% 57% 64% 70% 77% 84% 91% 98% *Source: CSL Survey as restated by HVS n = % of events in this sample would be captured with a 1000-person capacity ballroom. A 21,600 square foot ballroom accommodates a maximum of 1,279 persons (17 sf per person), which is enough to accommodate the Washington Birthday celebration. DRAFT January 18,
13 Breakout Space Requirements and Capacity (La Posada as Host Hotel) Building Concept Plan Average Size (SF) Number of Rooms Total SF Convention Center Sma l l Brea kout ,770 La rge Brea kout 1, ,440 Ga l l ery 1, ,725 Sub-Tota l 9 10,935 La Posada Tes oro Cl ub 1, ,680 Phillip V Ballroom 1, ,500 Bl ue Bonnet Hibiscus La Palma Ca ctus Rose Board Room Sub-Tota l 7 5,450 Casa Ortis ,375 Total 23 18,760 The convention center complex would have sufficient breakout space for all events. Survey Question: Please specify your maximum concurrent requirement for breakout meeting rooms (if any). 1 12% 2 14% 3 16% 4 7% 5 12% 6 7% 7 5% 8 2% 9 2% 10 2% % *Source: CSL Survey as restated by HVS DRAFT January 18,
14 Room Block Requirements Require room blocks less than or equal to: 50 rooms 32% 100 rooms 43% 150 rooms 53% 200 rooms 62% 250 rooms 70% 300 rooms 81% On average, event planners require a room block of 194 rooms to accommodate the lodging needs of their attendees. But, over half the events require less than 150 rooms. The figure on the right shows the distribution of room block requirements. The La Posada and other existing hotels can accommodate the majority of events. Like most convention centers, additional supporting hotel will be need to support events that need more than 150 rooms. Hotels 1 67% 2 23% 3 4% 4 0% 5 4% More than 5 2% Percent of Respondents *Source: CSL Survey as restated by HVS ROOM BLOCK BY EVENT TYPE Avg Peak Event Type Room Block Conference 209 Convention & Trade Show 289 Meeting 221 Training 116 Social Event 10 Other 25 DRAFT January 18,
15 Event Demand Indicators
16 Event, Attendance and Room Night Projections Estimate for a Stabilized Year Event Type Number of Events Event Days Total Attendance Room Nights Base Stabilized Average Total Average Total Texas State Associations , ,100 Regional Conventions & Conf ,400 3, ,400 Local Social Events ,500 32, ,575 Meetings ,500 3, ,875 Total ,900 9,950 Event Type Alternative Scenarios (Stabilized Year) Worst Case Middle Case Best Case Events Room Nights Events Room Nights Events Room Nights Texas State As s oci ati ons , ,500 Regi onal Conventi ons & Conferences 6 1, , ,600 Local Soci al and Ci vi c Events 40 2, , ,675 Meeti ngs 50 1, , ,500 Total 97 5, , ,275 DRAFT January 18,
17 Five-Year Projection Base Year Opening Stabilized FY FY FY FY FY Events Texas State Associations Regi ona l Conventions & Conferences Loca l Soci a l Events Meetings Total Attendees Texa s State As s oci a tions ,050 1,050 1,050 Regi ona l Conventions & Conferences 2,400 3,000 3,600 3,600 3,600 Loca l Soci a l Events 27,500 30,000 32,500 32,500 32,500 Meetings 2,500 3,250 3,750 3,750 3,750 Total 32,750 36,950 40,900 40,900 40,900 Attendee Days Texa s State As s oci a tions 1,225 2,450 3,675 3,675 3,675 Regi ona l Conventions & Conferences 4,800 6,000 7,200 7,200 7,200 Loca l Soci a l Events 30,250 33,000 35,750 35,750 35,750 Meetings 3,750 4,875 5,625 5,625 5,625 Total 40,025 46,325 52,250 52,250 52,250 DRAFT January 18,
18 Assumptions and Limiting Conditions 1. This report is to be used in whole and not in part. 2. No responsibility is assumed for matters of a legal nature. 3. We have not considered the presence of potentially hazardous materials on the proposed site, such as asbestos, urea formaldehyde foam insulation, PCBs, any form of toxic waste, polychlorinated biphenyls, pesticides, or lead-based paints. 4. All information, financial operating statements, estimates, and opinions obtained from parties not employed by HVS are assumed to be true and correct. We can assume no liability resulting from misinformation. 5. Unless noted, we assume that there are no encroachments, zoning violations, or building violations encumbering the subject property. 6. We are not required to give testimony or attendance in court by reason of this analysis without previous arrangements, and only when our standard per-diem fees and travel costs are paid prior to the appearance. 7. If the reader is making a fiduciary or individual investment decision and has any questions concerning the material presented in this report, it is recommended that the reader contact us. 8. We take no responsibility for any events or circumstances that take place subsequent to the date of our report. 9. The quality of a convention facility's on-site management has a direct effect on a facility's economic performance. The demand and financial forecasts presented in this analysis assume responsible ownership and competent management. Any departure from this assumption may have a significant impact on the projected operating results. 10. The analysis presented in this report is based upon assumptions, estimates, and evaluations of the market conditions in the local and national economy, which may be subject to sharp rises and declines. Over the projection period considered in our analysis, wages and other operating expenses may increase or decrease due to market volatility and economic forces outside the control of the facility s management. 11. We do not warrant that our estimates will be attained, but they have been developed on the basis of information obtained during the course of our market research and are intended to reflect reasonable expectations. 12. Many of the figures presented in this report were generated using sophisticated computer models that make calculations based on numbers carried out to three or more decimal places. In the interest of simplicity, most numbers have been rounded. Thus, these figures may be subject to small rounding errors. 13. It is agreed that our liability to the client is limited to the amount of the fee paid as liquidated damages. Our responsibility is limited to the client, and use of this report by third parties shall be solely at the risk of the client and/or third parties. The use of this report is also subject to the terms and conditions set forth in our engagement letter with the client. 14. Although this analysis employs various mathematical calculations, the final estimates are subjective and may be influenced by our experience and other factors not specifically set forth in this report. 15. This report was prepared by HVS Convention, Sports & Entertainment Facilities Consulting. All opinions, recommendations, and conclusions expressed during the course of this assignment are rendered by the staff of this organization, as employees, rather than as individuals. 16. This report is set forth as a market study of the subject facility; this is not an appraisal report. DRAFT January 18,
19 Contact Information: Thomas Hazinski Managing Director HVS Convention, Sports & Entertainment Ext. 11
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