COLUMBIA — In a business where size matters, Columbia is missing out.
The region is losing existing events and failing to win others because its convention center is the state's smallest, tourism leaders say.
An expansion is needed. But raising the estimated $60 million for the work that could mean extending a tax on hotel rooms, a sensitive subject in a city trying to build its tourism business.
"An expansion wouldn't move it up in the ranks but it would be more competitive," former Columbia Mayor Bob Coble said.
Conventions are big business across the country. Convention and trade show organizers spent $14.6 billion in 2017, according to the latest U.S. Census Bureau data, up from 20 percent over the previous five years.
The convention economy has shown no signs of slowing down, said Miyoung Jeong, a professor in the University of South Carolina's College of Hospitality, Retail and Sport Management. As a result, more cities have expanded their convention center to capture more business.
Columbia's convention is doing well. The number of events rose by 4 percent to 360 in fiscal 2018, and hotel rooms booked for events increased by nearly 8,000 during that same time. The economic impact of the conventions and meetings booked at the center was $23 million last year, said Bill Ellen, president of center operator Experience Columbia, in the organization’s latest annual report.
But in 2016, the convention center had to turn down nine events because the center was too small, resulting in $2.5 million in lost economic impact for the region.
Getting those larger events is "really what they’re after,” said Tom Regan, another professor in the University of South Carolina's College of Hospitality, Retail and Sport Management.
Experience Columbia has said it also has started losing out on existing events that are outgrowing the space though they would not disclose which conventions the city is losing.
“With the growth of the metro area, Columbia’s convention space might be on the cusp of being too small,” Regan said.
At 142,500 square feet, 2,100 is the largest crowd Columbia's center can accommodate. Experience Columbia has said it would like to add another 75,000 square feet.
In contrast, the Charleston Area Convention Center has 150,000 square feet of meeting and exhibit space and Greenville’s convention center has 370,000 square feet of space.
Regan said Columbia is in a good position to handle an increase in convention business.
Coupled with the convention center's proximity to the Vista entertainment district and the city's Main Street, "there's a lot of upside going there," when it comes to attracting event coordinators, he said.
“The other thing that’s been significant are the hotel rooms they’ve put in downtown,” Regan said citing the Hilton that opened across from the center.
What is key is how the city pays for an expansion, Regan said, and making sure there's a tax base to support the cost.
Columbia's convention center was built in 2004 with and receives operating dollars from a 3 percent tourism development fee on hotel rooms sold in the city and across Richland and Lexington counties. For fiscal year 2018, that fee brought in $6.9 million, according to the city's latest annual finance report.
Coble, who is now an attorney with Nexsen Pruet, said a continuation of that fee by Columbia and Richland County would be a likely source of revenue. That fee is up for renewal in 2022 when the current convention center bond is paid off.
"Clearly it's enough to pay for (the convention center) now as it's not being subsidized," Coble said.
Coble said Lexington County is not expected to participate in expansion efforts. Lexington County accounted for $1.5 million in taxes in fiscal 2018.
But with more hotels open and being built in Columbia, Coble said he thinks the loss can be made up. He said the city is also likely to seek money from the state, similar to the $5 million Greenville received for a proposed new downtown convention center.
Even after an expansion, Jeong said Columbia could find a selling point as a smaller unique venue, which has become more of a trend over the past couple years.
"Right now we’re in a growing mode," Regan said. "This is the time, if your're going to borrow, borrow now."