SALT LAKE CONVENTION CENTER HOTEL 

Utah Taxpayers Association“Utah Taxes Now” Conference

May 2013

Existing Downtown Hotel Market 11 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 market

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.17

Problems and Issues Unfair 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