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Convention Business Is Essential To Compete For Tourism Dollars

San Juan, without a convention center, is losing the battle


July 18, 2002
Copyright © 2002 CARIBBEAN BUSINESS. All Rights Reserved.

It is a well-known fact that convention traffic is essential to cities because it brings in significant tax revenue and boosts economic activity, including business at restaurants and attractions.

Puerto Rico, however, is trailing in this battle because it lacks a convention center, an omission that is particularly unfortunate given such increased competition in the market.

"Puerto Rico without a convention center is perceived by convention and meeting planners as a typical Caribbean destination with nice hotels and strong appeal for small and midsize events, but nothing else," said Jorge Pesquera, executive director of the Puerto Rico Convention Bureau (PRCB). "We will not be taken serious by the larger convention and congress market," he said, unless the planned convention center in Isla Grande is completed.

Despite a judicial reversal, the Puerto Rico Tourism Co. believes there’s still hope for the $365 million project, scheduled to open by September 2004.

Last month, the local Circuit Court of Appeals revoked the Planning Board’s site plan resolution for the convention center, sending the Tourism Co. back to the drawing board. The court’s decision favored petitioner Empresas Fonalledas, owners of Plaza Las Americas, who in May 2000 filed a Planning Board Resolution Revision challenging the board’s approval of the project as presented.

Empresas Fonalledas claimed the amount of designated commercial and office space seemed to belie the fact that these applications would be ancillary to the convention center. They claim the designated space suggests the intention to develop a full-fledged commercial center. If so, given the convention center’s tax-exempt status, it would unfairly compete against Plaza Las Americas, the island’s largest shopping center, and against other retailers in the Old San Juan area.

On June 27, the Tourism Co. asked the court to return its case to the Planning Board so that it might resolve the problem related to the site plan and the environmental impact statement. The court dismissed the Tourism Co.’s petition and said its decision does not impede the agency from settling the issue through proper administrative channels before the Planning Board.

"The decision is a positive step that will allow us to take the necessary measures to resolve the actual situation with brevity and continue with this important project," Milton Segarra, executive director of the Tourism Co.

"Puerto Rico is competing with everybody," said Ana Maria Viscasillas, vice president of marketing for the PRCB.

Millions of square feet of new convention space have opened nationwide in the last several years, and more are being built. Heavy expansion in markets such as Orlando, New Orleans, Atlanta, Las Vegas, and Chicago, and even in lower-tier cities such as Cincinnati, is fueling competition for conventions. Cities are adding convention space not just to lure bigger conventions, but also to handle multiple events at once. Three midsize meetings can be more profitable than a giant one, experts say.

"If we can accommodate the space for the convention, then we’re ready," said Viscasillas.

There is more to it than that though. Meeting planners help choose destinations based on four principal factors, in order of importance: accessibility, facilities, cost, and attractions (things to see and do).

Puerto Rico has enough rooms to put on an occasional great show for 2,000 to 4,000 convention-goers, according to the PRCB, but the San Juan metro area lacks hotel rooms to accommodate megaconventions. Unfortunately, Isla Grande’s convention center will not be able to alleviate this room pressure because it will not have a hotel to anchor it when it opens, if it does.

Despite the uncertainty regarding the future of the convention center, the PRCB is continuing its promotional and marketing efforts for the complex.

"We are working on promotional material that announces an opening for late 2004," said Viscasillas. "But we are not selling groups for 2004. Instead, we have a group already booked for May 2006. If this convention center is not built, it would be devastating for the industry in terms of public relations. It would be the most devastating news to handle with the press and with our clients."

This Caribbean Business article appears courtesy of Casiano Communications.
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