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December 2, 2011

Tourism, conventions, real estate — a valuable connection

  • The connection between visitors and the health of commercial real estate in Seattle may seem a tenuous one, but you don’t have to look far to see a strong and profitable relationship.
    Special to the Journal


    On almost any given day in downtown Seattle, one can find sidewalks filled with badge-wearing convention delegates moving to or from their hotels, see tourists happily touring with Ride the Ducks, or hear some unfamiliar accents in our many coffee shops.

    These visitors not only keep the cash registers busy for local businesses, but their spending also provides a much greater, long-term effect on the value of retail, office and residential properties.

    The renaissance that has taken place in the area surrounding the Washington State Convention Center provides a prime example. In the decade since the expansion of WSCC, that project has spurred numerous other building and revitalization projects. Nordstrom has credited the expansion of WSCC, and its influx of visitors, with the decision to maintain its flagship store and national headquarters in downtown Seattle.

    The decision to create the Pacific Place shopping center was also triggered by the WSCC expansion.

    These two major developments have helped to build an economic base for sustained growth in the downtown core. Today we see hotels, restaurants, shops, office towers, and high-rise condominiums and apartments occupy street frontage that was formerly lined by vacant and boarded up buildings.

    Photo courtesy of WSCC [enlarge]
    Expansions of the Washington State Convention Center have played a major role in Nordstrom maintaining its flagship store downtown and the development of nearby Pacific Place shopping center.

    Even in these challenging economic times, the allure of Seattle combined with its vibrant and walkable downtown makes it an attractive destination for tourists and convention attendees alike.

    Although the infrastructure required for a dynamic visitor economy has grown in the last decade, to keep up with future demand this infrastructure will need to grow even more. The WSCC still turns away business because of a lack of enough suitable event space and available dates; and larger conventions that choose Seattle often have to be shoehorned into the facility. The WSCC board of directors continues to look at options to expand the convention center yet again.

    Over the past few months, WSCC has hosted several major citywide conventions that have had tremendous benefit for our region. In early July, Lions Club International brought 14,000 members who spent $40 million during their visit. The 28,000 room nights required by their attendees filled 40 different hotels throughout the Puget Sound area.

    Last month’s SC11 supercomputing conference attracted a record-breaking 11,500 attendees from over 60 countries around the world. More than 25,000 room nights were needed with an estimated economic impact of over $23 million.

    Delegates who come from out-of-town to attend events such as these, frequently with families in tow, have been responsible for an estimated $3.8 billion in spending since WSCC opened in 1988.

    Beyond conventions, the 2011 Port of Seattle cruise ship season featured 195 sailings, 403,000 passenger embarkations and some $2 million in economic benefit for each vessel call — $393 million in annual business revenue generated.

    Cultural tourism continues to grow, with the Seattle Art Museum’s recent Picasso exhibit generating $66 million in economic impact. In a recent ArtsFund survey, nearly 40 percent of arts patrons come from outside of the region and their spending represents “new money” that would otherwise not have been spent here.

    Visitors to Seattle are a critical component in our local economy and their spending strengthens the very foundations of our city.

    Frank K. Finneran is CEO of Frank K. Finneran & Co., an independent hotel consulting firm. The company provides asset management, workout, development and other executive level advisory services to hotel owners and lenders. Finneran has served as chairman and CEO of the WSCC board of directors since 2003.

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