Stephen Zanoni says that if Madison subsidizes a headquarters hotel to help Monona Terrace, it is Monona Terrace that has the most to lose.
Zanoni, who manages Monona Terrace's biggest competitor, the Madison Concourse Hotel, admits that his hotel also has skin in the game. The city is weighing two proposals for the Judge Doyle Square project, one of which would turn the Madison Municipal Building into a 308-room hotel; another would build a new 352-room hotel. Both hotel proposals would include thousands of square feet of meeting and conference space. The developers are seeking as much as $80 million in public aid.
"If you build a sizable hotel, it will take business away from Monona Terrace,” Zanoni says. "What people don't really understand is that Monona Terrace is not a large facility. It's really not a convention center, it's a conference facility. It does really well in that small market. But they compete with hotels like us for conferences and meetings."
Located on Dayton and Wisconsin streets, on the other side of the Capitol from Monona Terrace, the Concourse is Madison's largest hotel. The independent facility has 368 rooms (it's in the process of adding another 10) and has 27,000 square feet of meeting and conference space. In contrast, Monona Terrace has 85,000 square feet of meeting and exhibition space.
In 2012, the Concourse hosted 1,700 groups, 91 of which, Zanoni says, rose to the size of a conference or convention. Definitions vary, but conventions are larger than conferences.
The Concourse's bigger conventions are WisCon, the feminist science fiction convention, which draws about 1,000 people, and the UW Center on Education Career Conference, with about 800 attendees.
Monona Terrace hosted 65 conventions and conferences last year. Its three largest conventions were the Madison Marathon, with 6,400 people, Ironman Wisconsin, with 5,000, and Ink Life, the touring tattoo trade show, with 2,200.
Both facilities tend to draw mostly state and regional events. "Anything that's not state or regional tends to be associated with [UW-Madison]," Zanoni says.
The Concourse doesn't have the exhibition space that Monona Terrace has for trade shows. But hotels have one big advantage over Monona Terrace, Zanoni says. They can give away their conference space for free because they know they'll make money from conventioneers renting rooms. "A group can save a lot of money that way," Zanoni says. "Monona Terrace obviously can't do that" because it doesn't have hotel rooms.
Zanoni expects that a new hotel, heavily subsidized by the city and with brand-new facilities, will offer similar giveaways to convention groups, taking business from both Monona Terrace and the Concourse.
Gregg McManners, general manager of Monona Terrace, counters that hotels like the Concourse stand to gain if Monona Terrace gets bigger events.
"If we get more business, ultimately the Concourse will benefit, because some of our smaller events will go to hotels like the Concourse," McManners says.
Zanoni is also alarmed that the most recent market analysis done for the city, by the consultant HVS, projects a new subsidized hotel renting rooms for around $160 a night into 2021. That's less than the Concourse's current average daily rate, he says.
"A brand-new hotel is going to be able to compete with lower rates because it's getting such a significant financial subsidy," Zanoni says. "They're going to be directly competing with us for conventions -- and it's a brand-new hotel."
This might not be an issue if the convention business were booming. But Zanoni says the conventions at his facility have flattened out since the 2009 recession. "[They haven't] come back the way that business and individual travel have come back. You've got so many cities offering incentives that it's really difficult to compete."
Reported by: ISTHMUS The Daily Page