News for the Hospitality Executive
|By Christopher Schurtz, Las Cruces Sun-News, N.M.
Knight Ridder/Tribune Business News
Jan. 27, 2004 - The viability of a proposed convention center may be up in the air with the announcement that the Hilton Las Cruces will almost double the amount of convention meeting space at its 18-year-old Las Cruces location on Telshor Boulevard.
By adding 10,000 square feet of space to its existing 20,000 square feet -- it will also add 100 rooms to the existing 200 rooms -- the Las Cruces Hilton would have more space than most New Mexico cities' centers.
The addition would also seem to meet much of the current demand for convention space that supporters have used to justify the need for a center in Las Cruces.
But Convention and Visitors Bureau director Ken Mompellier said despite the expansion, it would still be "way short of what we're talking about" for the proposed convention center.
Mompellier added the two previous feasibility studies that made a case for a Las Cruces center need to be re-evaluated to include the new space.
"We would be the first ones to come back and say 'You know what, this is not the way to go,'" Mompellier said.
In a statement released by New Mexico Heritage Hotels, a division of American Property Management Corp., CEO Jim Long points to losses and low occupancy rates for Albuquerque's 167,000-square-foot convention center, adding "the financial viability of the proposed convention center is questionable in Las Cruces."
Long said the Albuquerque center "loses millions of dollars annually. These losses deprive the city of valuable resources that could be utilized for other important city services."
"The market analysis prepared for (Las Cruces) is suspect. The proposed convention center could be detrimental to the city," Long said.
Mompellier said he and other members of the committee "were disappointed" with the announcement, particularly since several Hilton representatives serve on the convention center committee, and the Hilton has been one of the center's supporters.
With the revised surcharge bill heading to the Legislature, he also acknowledged the timing of the announcement isn't good and may add fuel to the fire of opposition against the surcharge.
Long also said his company operates a 200-room Radisson Hotel adjoining the convention center in Visalia, Calif., a city with similar demographics and size to Las Cruces. He said that center "operates at an annual loss of over $800,000 a year."
Las Cruces Hilton general manager John Rickey downplayed suggestions the Hilton project would essentially kill efforts to build an 80,000-square-foot convention center (with 40,000 square feet of meeting space) funded in large part by a surcharge on motel and hotel rooms.
"I have a hard time saying that. I would hate to say it will kill anything. That is not our intent," Rickey said.
The Hilton expansion will address the current demand for conventions that are currently passing Las Cruces by because there isn't enough space for them to meet here, said Rickey, who also serves on the convention center committee as a hotel representative.
Mompellier said the Hilton expansion "by no means replaces the need for a convention center in Las Cruces."
"We've got to understand there are thousands of groups out there. We wouldn't always be infringing on the same groups. The point is right now we are losing business because we don't have enough space," Mompellier said.
The CVB estimated the city lost 13 meetings and more than $5 million in convention business in 2001 because of the lack of adequate meeting space.
New Mexico State University currently has the most available convention space, 6,000 square feet, and draws large regional conventions like the Mariachi Conference.
Hotels with convention meeting space like the Hilton, the Holiday Inn de Las Cruces, the Mission Inn and the Mesilla Valley Inn host most of the rest.
Mompellier said "there is a very good chance we would be going for some of the same types of groups" but that the Las Cruces center may be able to serve larger groups better.
Rickey said with the expansion, the Hilton could handle up to 1,000 conventioneers.
"I believe with the expansion we could absorb 90 to 93 percent of the groups that want to come into the area," Rickey said. "We looked at the demand we have, and right now we have four or five groups that are just too large."
Rickey said the Hilton "still believes the convention center is a viable product," but has concerns if the surcharge mechanism will clear the likely hurdles that may come up in the form or a petition challenge.
"It's not necessarily a slam-dunk anymore," Rickey said.
Even if it was a slam-dunk, the project would not be underway for another two to three years. Rickey said with interest rates at an all-time low, with hotel occupancy rates at the Hilton increasing, the time is now for Hilton to move ahead with previous plans to add convention space.
Rickey also said the Hilton's plans have nothing to do with suggestions the site for the proposed center won't be close to the Hilton. The site has not yet been determined, and an informal poll taken last year of the site selection committee was never released.
The site selection committee is supposed to meet either this month or in February, though the status of some of the previously considered sites has reportedly changed.
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(c) 2004, Las Cruces Sun-News, Las Cruces, N.M. Distributed by Knight Ridder/Tribune Business News. HLT, IHG,