Convention Center closes in on success

For nearly two decades, the Hawai‘i Convention Center consistently has held a spot on the list of state ventures that were grand ideas, but somehow just didn’t live up to the hype. More recently, however, under new management, the center appears — finally — to be building momentum toward profitability.

When it opened in 1998, taxpayers were promised that within a decade the center would draw up to 430,000 visitors a year and generate $1.9 billion in visitor spending. But at its 15-year mark, under its previous operator, SMG Hawaii, the center was bringing in less than half the anticipated revenue and fell short of expectations to fill Hawaii hotel rooms with high-spending business visitors.

Sure, 9/11 and the economic downturn of 2008-2009 affected the center’s ability to draw group travel, and it became nearly impossible to solidify bookings in the 2009-2010 time frame after the government bailouts. Still, the previous management struggled to get its footing otherwise.

Buoyed by its transition to a new general manager, Teri Orton, and a new management company, Los Angeles-based AEG Facilities, the venue is on track to realizing its potential as a world-class convention center.

That momentum cannot afford to be lost.

By year’s end, the center will take in nearly $13.4 million in gross revenue, bolstered by a rebounding meetings, convention and incentives market. The center is also forecast to slash its net loss to just under $1.5 million from the $3.5 million deficit it has averaged for the last five years.

Next year already shows promise with bookings that include the World Conservation Congress in September, which is expected to draw thousands of attendees from around the world. It’s the first time the International Union for Conservation of Nature has held the event in the U.S.

“While the decisions made at the Congress inside the Hawai‘i Convention Center will shape the future of the planet, the surroundings outside will remind us just how much is at stake,” the IUCN website states.

The upward trajectory is welcome news, but to stay the course, management and tourism authorities will have to ramp up efforts to market the center — and the state — as legitimate locales to conduct business, debunking the notion that Hawaii is just an expensive leisure destination.

Orton, who became general manager in December 2013, said the center is “moving in the right direction, but we still have a ways to go.” Through October, she said, the center has generated $274 million in revenue and taxes for the state.

AEG must work aggressively toward its goal of increasing group arrivals and revenue so it can help retire the $327 million that the tourism authority still owes the state in principal and future interest payments on the bond that built the center.

Group travelers tend to be high-yielding guests because of the money they spend on their events, according to Keith Vieira, principal of KV &Associates Hospitality Consulting. Additionally, there’s the added bonus of having friends and family members accompany them.

Center management will have to take bold steps to maximize use of the venue. We’re encouraged by Orton’s efforts toward building more corporate meetings and creating more demand for sporting events. She is researching how to outfit the exhibition halls with temporary courts and store them during the offseason.

That outside-of-the-box thinking hopefully will lead the center to its break-even point and ultimately to profits in the years to come.

HTA board chairman Rick Fried said: “The perception that the convention center has been a white elephant if you look closely is inappropriate. It’s almost break even. … ”

It’s questionable whether “almost break even” equates to success after nearly two decades, but it appears the Hawai‘i Convention Center is finally on the upward track.