Conventions mean visitors who spend money on hotels, food and other items, and that produces tax money for the city.
So Keith Backsen, the city’s new Convention and Visitors Bureau director, has made a host of changes to help Omaha increase that business.
One major change is a new city incentive fund designed to subsidize convention planners’ costs, such as space rental.
Another is a closer working relationship with the Metropolitan Entertainment and Convention Authority, which operates the city’s largest convention space, the CenturyLink Center.
The problem: MECA makes its money by renting space and selling food and beverages at the CenturyLink Center. Its incentive is to maximize the revenue generated in the center, but it doesn’t matter whether attendees are from Omaha or not.
The city, on the other hand, has an incentive to draw conventions that bring out-of-town guests who will spend money outside of CenturyLink, on hotel rooms and dining out.
Now, Backsen and MECA President and CEO Roger Dixon say the two entities have already started the process of working more closely together.
To that end, the two groups paid $23,000 to Dave Radcliffe, a Washington state-based consultant who specializes in destination marketing, to compare Omaha’s efforts to book conventions with those of other cities.
“He was able to help us really articulate what I think we all knew,” Backsen said.
The two entities say they’ve started to prioritize bringing in conventions that satisfy both organizations.
A report MECA issued last year made similar recommendations. The panel of officials from MECA, the city and Greater Omaha Chamber of Commerce recommended that Omaha start offering incentives and that MECA and the visitors bureau work more closely together.
It said that Omaha has lost conventions over problems with space and availability. And the report’s authors noted that national competition is growing, and convention centers in other cities often have more nearby hotel beds and more exhibit and meeting space.
Convention attendees last year spent, on average, $837 each in Omaha, according to data from the visitors bureau’s economic impact calculator that takes into account spending on such things as lodging, dining, shopping, meeting space and transportation. And the city received $7.6 million in tax revenue last year from 130 meetings and conventions.
To bring in more visitors, the bureau has started tapping into its reserve fund to offer incentives to potential conventions.
Many other cities offer similar incentives, according to the consultant’s report, and he recommended that Omaha do the same.
Now, the city has about $1.4 million in the fund, and it’s offered about $750,000 of that to conventions over the next several years.
The fund would subsidize a convention’s expenses with the idea that the city would make back that money through tax revenue.
“This fund might be able to help us go after some bigger business that we’ve not been able to lure here,” Backsen said.
Radcliffe, the consultant, said such incentives are common and “an essential offering, now, in order to be successful.”
He said Omaha is competing against many other cities that offer meeting space at a reduced price, or even for free.
“It has to do with supply and demand around the country,” Radcliffe said. “There’s more convention space than there are customers.”
Backsen believes the incentive fund will be a “game changer” for Omaha.
The bureau doesn’t have a specific targeted return on investment.
To qualify for the fund, the convention must bring in enough people to fill 500 hotel rooms spread over at least two hotels on peak nights.
Other criteria the bureau uses to determine who should be offered an incentive includes the potential economic impact of the event and whether it would occur during a slow period.
To further increase convention business, Backsen also beefed up the bureau’s sales team from 11 to 14 and added a Washington, D.C., office to reach new potential clients.
And, Backsen said, the Marriott hotel that’s scheduled to open next year near the CenturyLink Center should add to the city’s total package because there will be more rooms in a full-service hotel near the convention center.
Radcliffe offered several other observations and recommendations, including:
» MECA and the convention bureau need to establish shared objectives and work more closely together.
» Omaha spends less on its convention bureau than similar cities do. (Its budget was $5.5 million last year; that rose to about $6 million this year.)
» CenturyLink Center has fewer meeting rooms than facilities in the other cities studied, and Radcliffe recommended the facility expand its meeting rooms.
» MECA’s facilities — CenturyLink Center and TD Ameritrade Park — are “impeccably maintained” and the center’s reputation is “highly regarded.”
» The city’s economic development strategy should include developing retail, restaurant and entertainment venues around CenturyLink Center.
Dixon’s takeaway: “We’re in a good position. We just need to tweak a few of (the things) we’re doing.”
Omaha won’t see the results of increased convention recruiting efforts immediately; convention bureau officials start working to book three to five years in advance.
“To be able to turn around and say ‘Here’s instant gratification,’ we’re not there yet,” Backsen said.