"Convention Centers: Is the Industry Overbuilt? 2008"

Below are excerpts from the above-named article that appeared in the HVS monthly report on the hospitality industry:

"Many existing exhibition facilities are not operating at or near full capacity. Even as demand slowed throughout the first part of this decade, supply continued to expand, resulting in facility utilization rates near historic lows. Public policy makers, private developers, and concerned citizens wonder: Is the industry overbuilt?"

"New facilities are most likely to succeed when positioned competitively with respect to market conditions, management, pricing, technology, booking policies, location, amenities, destination appeal, and existing tourism infrastructure. But many other facilities will not succeed as the industry matures. To properly assess the feasibility of a convention center or other public assembly facility, it is more important now than ever to evaluate carefully its competitive advantages that lead to its demand potential, given its competitive position in today’s market."

"The estimated utilization factor [for convention centers] in 2007 is only 16.47 percent, based on preliminary figures."

The Lancaster Convention Center will be 217,290 square feet, including half of 66,745 square feet of common areas with hotel. The report states: "Large shows were much less frequent, with only 23.1 percent of events reporting a size greater than 199,999 square feet."

The upshot: By the year 2011, it will be apparent whether the Lancaster Center will perform significantly better than the negative predictions of the PKF Feasibility Study of 2006.