The $520 million Marriott Marquis convention center hotel opened last year in downtown D.C. and the early returns for the District are beginning to look promising.
According to an Oct. 20 report from the D.C. auditor, there is reason to believe the hotel has begun achieving one of its central purposes: growing the number of large conventions that draw thousands of hotel guests to the city.
Major events are often booked two years in advance and Events DC, which manages conventions and sports for the District, has seen a 25 percent increase in hotel rooms booked ahead of time for 2017. So far 528,355 rooms are booked for 2017, compared to 422,776 in 2016 and 401,942 this year.
The number of rooms booked on peak nights of conventions is expected to rise a similar amount.
Although the convention business remains highly competitive, the 2017 bookings data makes it “likely that the Marriott is having its intended effect on convention center bookings,” according to the 13-page report.
“The recent opening of the Marriott Marquis hotel appears to be a success story so far. The presence of this large hotel, immediately adjacent to the Convention Center, is making it a more attractive venue for the conventions and meetings that bring in large numbers of attendees,” the auditor’s office, overseen by Kathleen Patterson, wrote.
Improvements in convention hotel business comes as the District’s status as a tourist destination is growing, with a record 20.2 million visitors coming last year, supporting approximately 75,000 jobs and more than $3 billion in annual wages.
The boost from the Marriot Marquis may overshadow spending concerns at Events DC.
The auditor’s office questioned whether Events DC was overspending to get convention business when compared with data from other cities compiled by the Texas-based International Association of Venue Managers. (After being contacted by Events DC, IAVM said the auditor had misstated some data and provided a replacement set to The Washington Post.)
Frank Ingoglia, IAVM research manager, said it’s difficult to compare convention business in different locations. But among cities with at least 500,000 square feet of convention space, D.C. rents its space for below average rates and spends much more on some expenses than other locations.
The District’s total revenue per square foot was $35.54 last year, while other convention centers brought in $41.55 per foot in 2013. The District’s occupancy rate was 48 percent, compared to 59 percent nationally.
The auditor suggested that there was room for Events DC to improve its bottom line and take a closer look at how it spends marketing dollars.
Events DC executives should investigate “if there are any areas where they can improve their financial or operational performance,” the report said.
The District government has invested more than $1 billion during the past 15 years into growing its convention business. D.C. opened the $850 million Walter E. Washington Convention Center in 2003 and put up $206 million — 40 percent of the cost — for the Marriott Marquis.
Events DC also receives around $100 million annually in hotel and restaurant taxes and under Greg O’Dell, president and chief executive, it has broadened its purview, putting $10 million toward a youth baseball academy and acquiring the rights to the Carnegie Building in Mount Vernon Square. Events DC also plans to put $32.5 million into an entertainment venue and Wizards practice facility.
O’Dell defended the organization’s spending, particularly on concerns like security, which is far more of a priority in Washington than in other parts of the country. He also said because D.C. is not part of a state, it does not get to piggyback on state marketing campaigns the way other cities do.
“We’re actually underfunded when it comes to marketing compared with states,” O’Dell said.
Follow Jonathan O’Connell on Twitter: @oconnellpostbiz