Originally published October 29, 2018 on SmartMeetings.com

You can find the rest of my work with Smart Meetings here

Over the past two years, the city and county of St. Louis have discussed plans to expand and renovate the destination’s 41-year-old, downtown America’s Center Convention Complex. Most of those discussions have treated the expensive renovations as much more of a necessity than a luxury.

The breadth and strength of the modern meetings and events industry means groups have more choices than ever. Instead of simply being an element in a destination’s success, modern and future-proof convention centers may be the key to surviving in an increasingly competitive market.

Earlier this month, St. Louis announced AC Next Gen Project, a $175 million plan to renovate America’s Center, adding 92,000 sq. ft. of exhibit space, a 65,000-square-foot ballroom, 42,000 sq. ft. of additional area, an outdoor pavilion and 26 new loading docks.

Also, on Friday a groundbreaking ceremony took place for the $9.1 million renovation of Atlantic City Convention Center. The project will completely overhaul the facility’s 32 restrooms, which will involve modernizing more than 20,000 sq. ft. of space and include the installation of new wall tile, flooring, mirrors, toilets and lighting.

Likewise, last week Indianapolis announced a $120 million renovation for Indiana Convention Center, adding a 50,000-square-foot ballroom—the state’s largest—and two more connected hotel towers for a total of 1,400 additional guest rooms.

These announcements come on the heels of recent developments countrywide, a few even breaking the billion-dollar mark. The $1.6 billion Summit Building is an expansion comprising 255,000 sq. ft. of event space being built alongside Seattle’s Washington State Convention Center. Construction officially started in July of this year, with an end date of 2022.

“Today, WSCC turns away as much business as it books,” the convention center’s website claims. “In the past five years, the convention center could not accommodate more than 350 event proposals due to lack of dates or space.”

In every destination, the promise of additional business and event opportunities is difficult to ignore. But such enhancements don’t happen in a vacuum.

Pressure to Compete

When announcing the America’s Center renovation, Explore St. Louis (the CVB) said, “The need to expand the complex has never been more urgent as cities across the country are making large investments in their convention centers and luring lucrative meetings and events to their communities.”

According to those cities, especially those in the shared market of the Midwest, that perception isn’t wrong. Feeling the same pressure to innovate and deliver for larger, more diverse groups, aging convention centers simply are not going to make the cut. But, for the time being, taking the plunge with renovations or diving in head first with an entirely new convention center is resulting in exactly the kind of city-wide return destinations want.

A sense of that urgency has peppered the conversation about St. Louis’s renovations for years, often with the market gains of other cities lurking in the backdrop. “We’ve lost ground,” Explore St. Louis President Kitty Ratcliffe told St. Louis Public Radio in May of 2017, when the prospect of a convention center upgrade seemed increasingly likely following a local election. “So, your question about when should we do it? We should have done it six years ago.”

While the process of hammering out exactly what improvements are needed and how to pay for them has continued ever since, Ratcliffe’s views haven’t changed. “Virtually every city in our competitive set for national convention business has improved their convention facilities,” she said in a more recent statement to St. Louis Public Radio, marking the announcement of the current renovation plans. The convention and visitors commission isn’t alone. “Frankly, “we see cities that are hardly our peer cities advancing and investing in their centers—and sort of leaving us behind,” said Steve Stenger, a St. Louis County executive. “We can’t have that. We have to be competitive.”

Planning for the Future

The CVB and businesses in Oklahoma City felt much the same about the now 46-year-old Cox Convention Center, located downtown. “The meetings industry has changed dramatically in the past 50 years,” says Mike Carrier, president of Visit OKC. “The old convention center just wasn’t meant to expand.”

Faced with the implacability of that hurdle, Oklahoma City is one of the handful of metro areas that has chosen to build a new convention center from the ground up. With a budget of $288 million, June saw the city break ground on what is the largest single construction project in its history, and what promises to be a state-of-the-art facility offering a 200,000-square-foot exhibit hall, a 30,000-square-foot ballroom and 45,000 sq. ft. of general meeting space.

But what excites Carrier the most is the fact that the new convention center is being built with the future in mind. Though there is no way to know exactly what the meeting’s industry will require of destinations over time, the new facility is designed specifically to make continued expansions and improvements as simple as possible. “For this, we’re looking 50 years down the road,” Carrier says.

And even though construction won’t complete until 2020, the convention center is already having an effect. The investment alone has driven greater interest at trade shows and generated a palpable excitement from groups. “It’s put us on the map,” Carrier says.

Staying Modern is a Moving Finish Line

Oklahoma City’s plan to stay flexible and open to renovations in the future matches with the framework already operating in destinations such as Indianapolis. Alongside pointing out the hard work Indiana Convention Center leadership puts in to make sure the facility is as desirable as possible to groups, Visit Indy Senior Communications Manager Lisa Wallace says, “We’re always looking for ways to enhance the space.”

That desire is the core drive behind the newly announced expansion, the sixth major expansion in the convention center’s 46-year history. As recently as 2011, $275 million went into another round of expansions, at the time propelling the venue to be the 16th-largest convention center in the country and connecting it to 4,717 hotel rooms.

Since 2010, however, even with the new additions, Visit Indy has been unable to bid on more than 200 conventions and events, due to not having enough hotel rooms and ballroom space, according to Visit Indy President and CEO Leonard Hoops. The new expansion “will transform our ability to secure major new events that have never been held in Indy,” he said in a statement. “It also gives us the capacity to better host multiple citywide conventions at the same time.”

Reaping the Rewards

Exhausting and expensive as staying on the cutting might seem, however, St. Louis, Oklahoma City and Indianapolis have inspiring case studies right in their regional backyard. It is hard to ignore the visceral impact a new convention center and an expansion have had in Nashville and San Antonio.

“The Music City Center has exceeded expectations on every level,” Visit Music City President Butch Spyridon says regarding the $623 million, 2.1 million-square-foot Nashville facility, built in 2013. “[There is] surrounding hotel development, restaurant development, healthy reserves and performance. It is essentially booked to capacity. Our only regret was not building it sooner or making it bigger.”

Discussing the 2016 expansion of Henry B. Gonzalez Convention Center, Casandra Matej, president and CEO of Visit San Antonio, tackles the numbers head-on. While the expansion itself, adding 726,000 sq. ft. of event and meeting space, carried a total budget of $325 million, she says, “We have booked 68 major meetings with planners that otherwise would not have considered San Antonio. These meetings represent an estimated economic impact of $685 million for San Antonio.”

But the benefits don’t stop there. “On top of that,” she says, “we would not have been able to secure the 2018 NCAA Men’s Final Four without the expansion and upgrades. The economic impact of the 2018 NCAA Men’s Final Four Basketball Championship alone was another $185 million in direct spending for San Antonio and a total economic impact generated by jobs of $350 million.”

What’s Next?

The potential upside is clear for destinations willing to make the investment, but that doesn’t mean upgrading to a modern convention center is an easy sell. St. Louis and Indianapolis now must wait for new county and city legislation to pass, enabling—among other things—taxes that would ultimately pay for both projects.

Estimating a potential 36 percent growth in event bookings in St. Louis, more than making up for the 20–30 percent decline the city has seen in in recent years, proponents of the expansion have put forward a plan to extend the hotel-tax model still being used to pay off the last major America’s Center expansion. Funded through taxes on out-of-town visitors, the plan would see the city and county paying off a new set of 40-year bonds.

Taking a different tactic, Indianapolis is proposing that Indiana Convention Center expansion will, in a way, pay for itself. Funds will come from the property tax increment generated by the development, and reallocation of tax increment financing (TIF funds) already dedicated to downtown for the Capital Improvement Board of Managers, the organization managing the project.

While we will likely have to wait until 2019 to hear the fate of both convention centers, the growing pressure on the destinations isn’t likely to be alleviated any time soon, since there is an intense need to stay competitive for meetings.

Originally published November 1, 2018 on SmartMeetings.com

You can find the rest of my work with Smart Meetings here

Imagine if attending a meeting in a different city, or even a different state, required nothing more than a quick afternoon trip. It could be possible with hyperloop technology, and recent headlines have caused us to wonder if it really will be the high-speed, eco-friendly transportation answer for the future.

Since entrepreneur and investor Elon Musk first introduced the idea for hyperloop in 2013, multiple companies have been quietly working away, and there have been estimates of general application as early as the mid-2020s.

What is Hyperloop? 

When Musk released his first hyperloop designs to the academic and business community, he requested an open-source process, asking for feedback and collaboration on what he saw as a new, fifth mode of transportation—beyond rail, road, water and air. The first four currently exist in a balance between cost and efficiency. “Hyperloop is a new mode of transport that seeks to change this paradigm by being both fast and inexpensive for people and goods,” Musk wrote.

Utilizing a low-pressure, sealed-tube system, Hyperloop is essentially a much larger-scale version of the pneumatic tubes some buildings use for mail and other deliveries. But using compressed air or magnetic repulsion, capsules can travel through the low-friction environment, carrying passengers at more than 700 mph. If functional, that could shorten the current six-to-seven-hour commute between San Francisco and Los Angeles to a breezy 35 minutes or less.

When it comes to the structural designs of the various capsules, the tubes themselves and everything needed to ensure the trips are completely safe, other companies picked up the baton. The five years since have then seen important, though limited, progress.

Who are the Major Players?

Currently there are three companies working at the cutting edge of the still-embryonic hyperloop industry. Hyperloop One was the first to produce a successful test of the propulsion and levitation technology required for the system to work. In December, seven months after that initial test, the company entered a partnership with Virgin, making the company officially Virgin Hyperloop One, with Sir Richard Branson taking over as chairman.

When it comes to making waves and kickstarting the technology across the globe, Branson’s company has been at the forefront. In January, Virgin Hyperloop One partnered with University of Missouri to begin a feasibility study for a possible route between St. Louis and Kansas City, Missouri, potentially shortening a 3.5-hour trip to only 28 minutes. Less than a month later came an agreement with the Indian state of Maharashtra to build a hyperloop between Pune and Mumbai. Deals in Dubai and Saudi Arabia soon followed.

Meanwhile, the next biggest player has been the global team of Hyperloop Transportation Technologies (HyperloopTT). Utilizing a crowd collaboration approach, drawing in team members and crowdsourced funding from around the world, the company began construction of its first full-size hyperloop track in Toulouse, France, in April. Since then, HyperloopTT has signed on to build the first routes in the United Arab Emirates and China.

And finally, there is Musk’s own Boring Company. Though the company did not start up until 2016, it has already made significant progress. Notably, it began as a pet project after Musk joked about “digging” his way out of the mess of Los Angeles traffic. While it is predominantly a construction company devoted to developing new technology for boring tunnels—and perhaps most famous for its fundraising stunt of selling actual flame-throwers—Musk plans to use those tunnels for ultra-high-speed passenger transport pods. Somewhere between trains and hyperloop, these pods will carry passengers, or entire cars, at 155 mph. Going forward, the same tunnels could be used for full hyperloop systems.

Over the past year, Musk received approval to begin digging between Washington, D.C., and New York City, as well as a deal to dig between downtown Chicago and Chicago O’Hare International Airport (ORD).

What’s Happening Now

Each of the three major companies has made headlines in the past two months, and have reached a few major benchmarks.

On Sept. 13, Virgin Hyperloop One became the first company to send a representative before the U.S. Congress. Josh Raycroft, director of business strategy, spoke to the Senate Committee on Commerce, Science and Transportation in a hearing called “Transportation of Tomorrow: Emerging Technologies that Will Move America.” While answering senators’ questions, Raycoft acknowledged the current limitations of hyperloops being under the jurisdiction of the Federal Railroad Administration and pushed for the regulatory pipeline to be sped up. He also stated that, at the current pace, hyperloops will be ready for widespread use by the mid-2020s.

As if to emphasize the point, the results of the Missouri feasibility study released on Oct. 17 shined favorably on the proposed route and the economics behind it. Steve Edwards, chairman and CEO of Black & Veatch, the company responsible for the study, said, “We found this project is a case of solid engineering meeting up with Virgin Hyperloop One’s innovative vision to create a network transforming the very concept of community.”

This all took place against a growing political turmoil with Saudi Arabia, however. Following the alleged murder of journalist and The Washington Post columnist Jamal Khashoggi by the Saudi government, Richard Branson severed several business ties with the country, resulting in the proposed hyperloop plan being canceled. A week later, on Oct. 22, Branson announced he would step down from his position as Virgin Hyperloop One’s chairman. The search for a replacement is underway.

Meanwhile, moving ahead with projects around the globe, and in the United States, HyperloopTT unveiled its first passenger capsule on Oct. 2. Company Co-founder and CEO Dirk Ahlborn marked the occasion, saying, “This capsule will be a part of one of the most efficient transportation systems ever made.” Likewise, on Oct. 24 the company announced a deal to begin construction on a commercial hyperloop in Abu Dhabi in the third quarter of 2019.

Within the United States, however, HyperloopTT has continued working away on a deal with Northeast Ohio Areawide Coordinating Agency (NOACA) to build a route between Chicago and Cleveland. The multistate proposal, known as Great Lakes Hyperloop, is in the midst of a feasibility study of its own due to conclude in 2019.

NOACA Executive Director Grace Gallucci explained the deal, saying, “We believe in investing in projects that promote mobility options and improve quality of life. What hyperloop represents to Northeast Ohio and the entire Great Lakes Megaregion is so much more than just speed and efficiency. It opens our region to the rest of the Midwest, connecting us all in a network of technology, resources, people and jobs.”

It is an excitement echoed in the deals The Boring Company has made. But to top it off, Musk took to Twitter and announced on Oct. 22 that the public can look forward to a fully functional prototype system of the company’s high-speed sled in the tunnels dug beneath SpaceX headquarters as soon as Dec 10. Seeing Musk’s new design in practice will tell us a lot about the future of The Boring Company’s contracts.

Where Does That Leave Us?

Hyperloops sound like something out of science fiction—probably because they are. And there’s no shortage of detractors and critics, citing everything from logistics to cost as reasons to not buy into the technology. Rather tellingly, the very first response to Musk’s “Opens Dec. 10” tweet is a post of Wile E. Coyote painting a fake tunnel on a cliff face. But none of that means it won’t work.

Some of the best scientists in the world are tackling the question of hyperloops. And while a healthy skepticism of Virgin Hyperloop One’s mid-2020s estimate might be for the best, the progression toward a new form of transportation likely isn’t stopping anytime soon. Whether it is the near-vacuum tubes of Virgin Hyperloop One and HyperloopTT, or the tunnels of The Boring Company, change is coming, and this is still only the start.