Convention Hotel Math

Conventions are great for downtown Austin. They bring in people that fill local downtown restaurants, bars, and stores and they help local businesses thrive. They help keep downtown well-populated and busy, they create tons of downtown jobs, and their tax dollars help fund downtown improvements. With just a few thousand people currently living downtown, it’s non-residents who keep downtown alive.

To attract conventions to Austin, it really helps to have large anchor hotels to hold all of the attendees. This is one of the reasons that the City originally spearheaded and funded the development of the Hilton — currently the only downtown Austin convention hotel.

Now, the City Council is trying to figure out how to get a second downtown Austin convention hotel built downtown. The main issue is that the 800-room Hilton is not big enough to hold 1,000 to 3,000 attendee conventions which expect to place the majority of their attendees in 1-2 convention hotels. According to a city study, a second convention center hotel could generate as much as $1.9M in annual tax revenue and 680 permanent jobs.

In particular, the addition of a second convention-scale hotel would help the City attract the most lucrative mid-scale corporate and medical conventions, bringing bigger-spending convention goers downtown.

While the mayor has made bringing a second convention hotel to Austin a priority, no developers or investors have stepped up to provide resources as of yet. In the current commercial real estate environment, It is more than likely that the City will need to provide incentives or funding to making the project happen.