It’s been 17 years since I first wrote about the need for a full-service convention headquarters hotel in downtown Salt Lake City. Naively, back in 1995 I wrote, “Once they understand the need and realize money can be made, developers will build a large hotel on their own. That’s how the free market works.”
I still believe that’s how the free market works, but it definitely hasn’t met the need for a large convention hotel.
A Deseret New story this week said convention officials are raising the issue again. Without such a hotel, there won’t be many more big conventions such as the USANA International Convention that was in town last week or the Outdoor Retailer Summer Market. Those people don’t like spreading delegates among dozens of hotels.
The city does lose some conventions because it lacks a convention hotel. Once, as a board member of the Society of Professional Journalists, I looked into bringing that group’s annual convention here. The bottom line was that the city didn’t have a hotel large enough to keep all delegates under one roof.
Still, this is one problem taxpayers shouldn’t have to fix. Proponents will tell you, correctly, that building a large hotel just doesn’t pencil out for a private developer. But using taxpayer money to make it happen doesn’t pencil out, either.
A subsidy would naturally take business away from some of the existing hotels that house delegates. It also would put downward pressure on room rates because of the increase in the supply of rooms. Taxpayer subsidies to private businesses are patently unfair.
I’m not sure what the answer is, but I’m also not sure if the problem is as big as some suggest.
Any benefit from a public subsidy would have to be weighed against the money brought in by new conventions.
Meanwhile, it’s hard to keep up with all the magazines and surveys that rank Utah as a fantastic place to do business. Forbes recently ranked the state No. 1. CNBC ranked it No. 2, and Business Insider magazine put Salt Lake City 15th on the list of hottest American cities for the future.
Convention business is important. Real economic development is far more important. Keep things in perspective. Smart taxing policies allow local economies to thrive. Despite 17 years of agonizing, the lack of a large hotel hasn’t been a disaster.