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In a feat rare for the convention industry, the Savannah International Trade & Convention Center projects it will finish fiscal 2014 nearly $1 million better than budgeted, bolstered by higher than expected hotel/motel tax revenues.
Encouraged both by its numbers and requests from larger convention groups, the trade center authority, meeting Wednesday, also commissioned a feasibility study to look at expansion of the center, a new convention hotel and develop an overall strategic plan for convention business in Savannah.
“This is a red-letter day for the authority,” said chairman Mark V. Smith. “Having been here from the beginning, it’s great to see that we’re now at the point of looking at what’s next for the trade center.”
The authority will pay PKF Hospitality Research of Atlanta $163,000 for the study, which is expected to take four to five months. It will be the first comprehensive study conducted since before the trade center was built.
That study, which Smith said was completed in 1992, predicted a new convention center would attract 26 major conventions of 750 people or more a year to Savannah.
“We have not achieved that,” he said.
“We have a wonderful building that has performed very well. It made money this year, which is a remarkable, but we’re only hosting five or six major conventions a year. So we need to look at what we can do to enhance our convention platform.”
The timing is good, Smith said, as several of the Trade Center’s largest convention clients have indicated they need more room.
At last month’s meeting, the authority heard from Tim Steinhouser, director of customer relations for Gulfstream Aerospace, whose suppliers and operators conference brought 1,500 participants to the trade center for 10 days, creating an overall economic impact to the community of nearly $800,000, Smith said.
“Gulfstream indicated they are very happy here but are rapidly growing their events and would very much like to see both an expansion of the trade center and the addition of a convention hotel on the island.”
Gulfstream is not alone, according to trade center executive director Bob Coffey, who said the Georgia Municipal Association and the Association of County Commissioners of Georgia have also expressed the need for more meeting rooms and exhibit space.
At an earlier meeting, Coffey cited an anecdotal example of the need.
“We have a group that has been here with an international conference several times,” he said. “The last time (they were here) they told us they couldn’t come back.
“It seems having the conference in Savannah created such a demand, we now don’t have enough hotel rooms or exhibit space to accommodate the numbers.
“If we do our job well and create a greater need, we should be considering how we are going to meet that demand in the future,” Coffey said.
Trade Center sales and marketing director Fredia Brady has also seen the result of Savannah’s popularity working against the venue.
In a recent report to the board, she noted the cancellation of another international conference representing more than 3,000 room nights because attendees would have to be spread over at least nine different hotels in Savannah versus three hotels in Atlanta.
While a number of hotels have either opened recently or are under construction, most of them are small, high-end boutique properties that are geared primarily to the leisure or individual business traveler, not convention business, according to board member Joe Marinelli, president of Visit Savannah.
An expansion of the Trade Center building could go hand-in-hand with a new hotel, Smith said, as the Trade Center, in partnership with the Georgia World Congress Center, seeks to attract and accommodate larger groups.
But the authority has backed away from its original idea of a minimum 500-room hotel.
“What we’re looking at now is a convention hotel with a minimum of 300 rooms that could be expanded when and if the need arises,” he said, adding that information that results from the study will provide a platform for discussions with the mayor, city manager, Chatham County officials and other stakeholders.
Smith listed the projected cost of an expansion at between $48 million and $98 million, depending on the extent of the final plans.
‘A RED LETTER YEAR’
For the fiscal year ending June 30, the Savannah International Trade and Convention Center is projected to be $971,562 favorable to budget, with a positive cash flow of $60,854. Hotel/motel tax receipts were $278,448 favorable to budget, a number that is expected to grow with most of the last two months still unreported.