Years of decline in the convention industry and a global pandemic weren’t enough to deter the Austin City Council from voting yesterday to move forward with an estimated $1.2 billion plan to expand the Austin Convention Center.
The mayor and nine council members voted ‘yes’ on a resolution authorizing $6.3 million in “earnest money” to initiate property acquisitions around the center – a first step toward executing the larger plan. One council member, Leslie Pool, abstained, citing concern about the potential cost of the project.
The council also approved payments up to $310,000 to the law firm Hornberger, Fuller, Garza & Cohen to provide legal services in connection with the expansion.
Even before the global coronavirus pandemic, the Convention Center was having only mixed success, according to five years of attendance data obtained by Honest Austin from city records.
Though overall attendance grew modestly over the five-year period, most of that growth came from the annual culture and technology conference South by Southwest (SXSW), and related events like “SXSW Eco” or “SXSW Wellness Expo,” with attendance at other events flat or lagging.
Excluding attendance at SXSW, attendance at Convention Center events dropped 10% over the five year period, with only 319,503 attendees in 2019 compared to 350,959 in 2014.
Over the five-year period, SXSW and related events accounted for a hefty 46.7% of all events attendance at the Convention Center, according to Honest Austin‘s analysis.
The total number of events was down too, with bookings dropping from 147 in 2014 to 101 in 2019, a decline of nearly a third.
The takeaway? The hype around SXSW has obscured an uncomfortable truth about the Convention Center: business is lagging. The numbers also suggest that the political effort to expand the Center is driven more by the needs of a single vendor, SXSW, than by market demand more broadly.
With average annual losses of $28 million a year, the Austin Convention Center Department is not profitable and relies on city subsidies. The industry faces headwinds as more businesses look to trim travel costs by moving sales, training, and networking functions online – a trend accelerated by the pandemic.
Some big corporate players have ceased using the Convention Center altogether. Dell, headquartered in nearby Round Rock, once hosted an annual event called Dell EMC World at the center, bringing in 11,000 visitors in 2014 and 8,000 in both 2015 and 2016. But it hasn’t returned since then.
“The numbers suggest that the political effort to expand the Convention Center is driven more by the needs of a single vendor, SXSW, than by market demand more broadly.”
Other clients had ambitions to draw big crowds but ended up falling short. For example, Wizard World Austin Comic Con forecast an attendance of 10,000 in 2017 before dropping to 4,412 in 2018 and 4,000 in 2019.
Other events come to Austin as one-time only events. A state robotics competition, for example, which brought 2,000 people to the Convention Center last year, plans to hold its next championship in San Antonio.
The pace of the industry’s decline could actually be larger than the city’s datasets suggest. That’s because the numbers above represent estimates of the number of people forecast to attend an event, as recorded by the City’s Convention Center Department, but they don’t represent actual headcounts of attendees.
Derick Hackett, Public Information Specialist at the Austin Convention Center Department, did not respond to a question about the quality of the data.
