By: Madison Iszler | From: San Antonio Express News
If you expand it, they will come.
That’s the logic underpinning city officials’ latest push to increase the size of San Antonio’s Convention Center, an investment they say is necessary to protect the area’s status as a tourist hub and woo meetings from other cities.
Visit San Antonio, the city’s tourism organization, says it can’t bid on some events because the downtown facility isn’t big enough — potentially stopping millions of dollars flowing annually from conventioneers to hotels, restaurants, bars, stores and other businesses.
Expanding the 1.6-million-square-foot center, at an estimated cost up to $900 million, would ensure San Antonio can keep competing for those lucrative visitors and attracting more events, officials say.
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“The bottom line: doing nothing is not an option if we want to remain a top-tier convention destination,” City Manager Erik Walsh said in a statement.
The reason: Rival cities are pouring millions into expanding and modernizing their own convention centers, creating an arms race for space that shows no signs of abating — and raising questions about whether there are enough convention-goers to fill the plethora of exhibit halls and meeting rooms, particularly in the wake of events like the pandemic and the Sept. 11 attacks that shook up the industry.
Consultants’ projections for past investments in increasing the size of convention facilities in San Antonio and elsewhere have been overly rosy in some cases, and the publicly-owned facilities are typically money-losers.
Proponents say convention centers are still financially worthwhile because they generate higher hotel and sales tax revenue and jobs, but most are not profitable and competition is rising steeply.
Profit? Unknown
The Convention Center’s annual revenue totaled $23.5 million in fiscal year 2023, well above the $19.9 million it generated in 2019 before the pandemic, but it’s unclear whether the facility made or lost money. A spokesperson said city staff doesn’t compile annual profit and loss figures.
That could be by design.
“You can never pay for the capital cost of expansion and improvement based on the center’s performance,” said Heywood Sanders, professor emeritus of public administration at the University of Texas at San Antonio and author of “Convention Center Follies.”
The same thing’s happening in other cities.
Austin is spending $1.6 billion to demolish its convention center and build a new facility with 620,000 square feet of rentable space, about 255,000 square feet more than its previous footprint.
Dallas is shelling out $3.7 billion for an overhaul of its convention center and Fort Worth is putting $701 million into expanding and modernizing its facility.
Houston is working on a $2 billion renovation of its center, a project that includes erecting a 700,000-square-foot building with exhibition halls, retail, restaurants and what it’s billing as the largest ballroom in Texas.
Other municipalities of all sizes — Seattle, Honolulu, Milwaukee, Phoenix, Orange County in Florida, Los Angeles, New Orleans, St. Louis, Raleigh, El Paso, Bloomington, San Diego, Savannah, Chattanooga — have all recently renovated or are in the process of refurbishing convention facilities.
It’s unlikely that every city that expands its convention center will see the drastic increases in attendance and hotel bookings that are often forecasted, Sanders said.
“It defies credulity that every last one of these places is going to see these kinds of results,” Sanders said. “It may happen to one or two. But for every one of them?”
How many people are coming to conventions?
Some 375,825 people attended conferences at the Convention Center in 2024, according to city data based on figures provided by clients.
Another 198,870 people went to consumer shows, sporting events, graduations and other meetings — events that are primarily attended by locals, not out-of-town visitors, so don’t generate the same spending at hotels and other businesses.
Convention attendance in 2024 was up about 12% from 2014, when the Convention Center’s last expansion began. That’s also the earliest year attendance at the facility was broken down by the type of event, the city spokesperson said.
As they are today, city officials a decade ago said increasing the footprint of the Convention Center by more than 20% would help them attract bigger and more lucrative events and consultants said it would boost the city’s ranking from 22nd to ninth in the U.S. among similar facility designs. The city’s largest capital improvements project at the time, it wrapped up in 2016.
In the wake of the renovations, 396,785 people in 2017, 431,492 people in 2018 and 365,850 people in 2019 went to conferences at the Convention Center. Then the pandemic upended the industry, bringing travel to a halt and prompting organizations to scrap a host of conferences and other meetings.
But conventioneers have been coming back to San Antonio since the health crisis: Attendance was up 2.7% in 2024 from pre-pandemic 2019, and up 4.5% in 2023. That was still well below the recent peak in 2018, a high point for the sector.
Another set of city data that stretches further back indicates that the share of hotel room nights reserved for conventioneers has been falling for about two decades, said Geoffrey Propheter, a professor of public affairs at the University of Colorado at Denver.
He based his analysis on data from the city’s bond disclosure documents on room nights sold by hotels and how many of those were for conference-goers attending events booked just by Visit San Antonio and its predecessor. The events are not broken out by type and not limited solely to the Convention Center.
Developers have built more hotels and room sales overall have risen, but the share of those sales attributable to conventions has ebbed from about 12% in the late 1990s to about 9% before the pandemic and less than 6% post-pandemic, according to Propheter’s calculations. He questioned whether the city should invest in attracting more conventions, or instead try to better understand what is — or could be — bringing more leisure travelers to the city.
Conventions’ declining importance
“Conventions are just not nearly as important now as they were in the past,” Propheter said. “Tourism is still very important. It’s just not conventions.”
Sanders pointed to the same data as evidence that consultants’ projections for attendance increases after renovations to the Convention Center have been overly optimistic.
In 1990, consultants forecast that attendance at the Convention Center would swell from 336,966 in 1989 to between 500,000 and 874,000 in 2000. About a year later, they came back and told city officials that doubling the facility could draw 728,000 attendees in 2000.
The city finished a $215 million expansion in 2001, just as the Sept. 11 attacks shook up the hospitality industry. Attendance at meetings booked by Visit San Antonio’s predecessor surpassed 728,000 people in 2017 alone.
It hovered in the 400,000s and 500,000s from about 2000 to 2012, jumped to 712,577 in 2013, fell back into the 600,000s and increased to 823,561 in 2017. But attendance then dropped back into the 600,000s, plunged into the 200,000s during the pandemic then rebounded to the 500,000s in 2022 and 2023, according to the city’s bond disclosure documents.
Room nights — hotel rooms occupied by conventioneers — hovered in the 700,000s and 600,000s in the early 2000s before plunging to the 400,000s in the aftermath of the 2008 recession. Bookings have increased to the 600,000s since then, with the exception of 2017, when room nights totaled 816,582.
The city built the 1,003-room Grand Hyatt hotel next to the Convention Center in 2008, using $208 million in bonds backed by the city. That project was also finished at an inopportune time, amid the recession.
Consultants forecast in 2005 that annual average occupancy at the hotel would hit 76% in 2011 but it never rose to that level, according to a bond document from 2021, ahead of the city’s agreement in 2022 to acquire it from Hyatt Corp. Hyatt had closed the hotel for five months and stopped making bond payments during the pandemic.
“Forecasts should be taken with some serious question — a proverbial grain, if not a full shaker, of salt,” Sanders said.
Latest San Antonio expansion
Still, city officials contend that another expansion is warranted.
The Convention Center is operating at nearly 70% occupancy, which is considered full capacity by industry standards, Walsh, the city manager, said. Adding as much as 200,000 square feet of contiguous space would allow San Antonio to host larger events and multiple major conventions simultaneously.
“That could generate hundreds of millions more in potential economic impact and bring millions more attendees to the city,” Walsh said. “This is not just about numbers — it’s about future-proofing our visitor economy, which supports jobs, local businesses, and hospitality services that residents benefit from without bearing the financial burden.”
City officials expect an expansion of that size to cost between $700 million and $900 million and plan to pay for it using the city’s hotel occupancy tax revenue and the state’s portion of hotel taxes from a special tax zone.
It would be one component of their bigger plan to create a sports and entertainment district downtown that would include a second Convention Center hotel, a new Spurs arena and renovated Alamodome.
The Convention Center had too little space to accommodate about $700 million worth of business Visit San Antonio could have pursued over the past six years, according to the organization.
That figure is based on the thousands of leads for meetings that Visit San Antonio receives annually and plugs into its software system. The system has categories for lost business, including not having enough exhibit space, said then-CEO Marc Anderson.
For example, Ace Hardware had its spring meeting in San Antonio in 2023 and 2025. But the Convention Center is too small to host its larger fall trade show, which could draw about 15,000 attendees, he said.
Expanding the Convention Center’s exhibit space would allow Visit San Antonio to bid on nearly $1 billion worth of new business, the Visit San Antonio exec said.
“We have to remain competitive in our state, but we also have to remain competitive as the choices for meeting professionals expand across the United States,” Anderson said.
Where it ranks
The Convention Center ranks 18th among U.S. facilities by amount of exhibit space, with about 514,000 square feet. Expanding it by at least 100,000 square feet would boost it to 10th place, John Kaatz, a principal at consulting firm CSL International, told council members in December. It would rank eighth by the amount of contiguous exhibit space.
“We really need to step up, given our competitors are making the same kind of move,” Kaatz said.
Spending generated by visitors to the Convention Center averaged $142.2 million from 2010 to 2019 and $130.8 million from 2010 to 2023 at hotels, restaurants, stores and other attractions. In the coming years, spending could climb 19% with an expansion, or fall 10% if the facility remains as-is, he told council members.
“The do-nothing scenario in a world that is incredibly competitive is going to be challenging. You will begin to recede in terms of your convention profile, in terms of that economic impact,” Kaatz warned.
Walsh has said an analysis of the economic impact of expanding the Convention Center will be part of a feasibility study the city is finalizing. Construction could begin in 2028.
Nationally, attendance growth increased an average of 1.5% from 2015 to 2019, before the pandemic, according to the Center for Exhibition Industry Research.
Inflation, visa wait times for international travelers and immigration policies could affect travel, but the organization anticipates “steady, slow growth,” said Nancy Drapeau, vice president of research. Large and mid-size events are rebounding more quickly than smaller gatherings, and there’s more competition, she said.
“There might be more buildings than events of a certain size, but who gets the business?” Drapeau said. “That’s the game.”
What do convention planners look for?
When planning meetings for their clients, convention planners consider a variety of factors in choosing a location, said Denise Galbraith, corporate events producer at Event Solutions, an event planning and management agency.
They evaluate the amount of space and layout — whether there are areas for registration, general sessions, breakout rooms and trade show booths, depending on the type of event, Galbraith said. They look at whether a venue has a kitchen for catering and storage for audiovisual equipment.
Nonstop flights and how easily attendees can get to a convention center is another factor. San Antonio International Airport leaders have been trying for years to attract more nonstop flights to major domestic and international cities.
“It’s a big factor because people are traveling from all over the country and it’s usually a pretty quick turnaround,” Galbraith said. “Maybe there’s a complication on your layover and you miss your next flight out. A direct flight is a lot more desirable because of travel time and any kind of delays. The less hours that they’re spending on the move, the better.”
Planners also take into account what rental discounts a venue and nearby hotels may offer and the proximity of a facility to lodging and dining.
Major convention centers across the U.S. often provide incentives, such as rent discounts, to lure events, Sanders said.
For example, to bring the U.S. Travel Association’s annual conference to San Antonio in 2023, the city and Visit San Antonio spent at least $5.8 million to cover rent at the Convention Center and pay for parties for attendees and travel journalists’ expenses. Visit San Antonio said the trade show would bring more than 5,000 attendees to the city, generate an estimated $614 million in international visitor spending within three years and draw another 395,000 international visitors to the city.
Planners tend to favor the same cities: 88% of the largest 250 conventions last year met in 20 cities, according to a report by Destinations International and Simpleview, a software company that provides services for tourism organizations.
As of 2018, Texas had more than 90 convention centers totaling about 8 million square feet of meeting space — enough room to cover more than 138 football fields, according to an article in the Texas Comptroller’s Fiscal Notes publication.
“Convention center complexes remain a potent symbol of downtown development and dynamism, and local officials and business leaders are likely to continue calls for more spending to keep them competitive for state and national events,” the article said. “Such moves reflect a general belief that convention centers pay for themselves through higher hotel and sales tax revenue, more jobs and more private investment. Most, however, do not cover their operating costs, and competition among them has risen sharply.”
At least 3.8 million square feet of space for conventions is set to be added to facilities in the coming years.