Utah Taxpayers Association Utah Taxes Now Conference May 2013 Existing Downtown Hotel Market 11 fullservice hotels 4800 rooms Existing hotels entered the market with little or no government help ID: 491812
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SALT LAKE CONVENTION CENTER HOTEL Utah Taxpayers Association“Utah Taxes Now” ConferenceMay 2013Slide2
Existing Downtown Hotel Market11 full-service hotels (4,800 rooms)Existing hotels entered the market with little or no government help
Private investment in downtown hotels has been
extraordinary
—superior to other cities
Downtown well supplied by a wide range of hotel rooms
Grand America Hotel (775 rooms) is a convention hotel
Grand and Little America hotels have surplus capacity
1,000 room convention hotel would add 21% of room inventory (full-service) to a well-supplied marketSlide3
Strategic Advisory Group (SAG) estimates about $100 million (NPV) subsidy is needed to bring a 1,000 room convention hotel to downtown Salt Lake
Source: SAG,
Convention Headquarter Hotel Financial Model Assessment
, December 2012, pg.17Slide4
Problems and IssuesUnfair tax policy (how do existing hotels compete against a hotel receiving about $10 million/year in tax benefits?)Approach incentivizes the subsidized hotel to take business from existing hotels
Public will lose tax revenue when lodging, restaurant and banquet business moves from existing taxpaying hotels to the non-taxpaying convention hotel
Public will lose tax revenue if a heavily subsidized convention hotel keeps taxpaying hotels from entering the market
A large portion of spending by delegates staying at the convention hotel would not be taxed for 15+ years
The approach boost convention business is not supported by Utah’s hotel and restaurant associations—which comprise 67% of convention delegate spending