Massachusetts Office of Travel and Tourism T5 Presentation

1. James E. Rooney Executive Director Massachusetts Convention Center Authority Massachusetts Office of Travel and Tourism T5 Presentation  I want to introduce a new strategic mission for our organization Boston�s position as a leading meetings and convention destination is strong, but to remain competitive much work is required. Defined as TOP 5 What I mean by Top 5 is: I want to introduce a new strategic mission for our organization Boston�s position as a leading meetings and convention destination is strong, but to remain competitive much work is required. Defined as TOP 5 What I mean by Top 5 is:

2. 1/28/2010 2 MCCA Overview Economic Impact: (in millions) FY 2009 $525.4 FY 2008 $586.9 FY 2007 $515.0 FY 2006 $439.9 FY 2005 $337.4 Total $2.4 Billion

3. 1/28/2010 3 MCCA: Demonstrated Success Over the last five years the BCEC and the Hynes have more than doubled their return on investments: Initial BCEC investment $850.0 Million Operating & capital investments $118.7 Million Tax Benefits $129.3 Million Economic Impact $ 2.4 Billion

4. 1/28/2010 4 Demonstrated Success We know the story of the past four plus years: Boston hosted its 1 millionth BCEC-generated hotel room night in 2008 BCEC events generated more than $522 million in 2008, a 9 percent increase over 2007 BCEC has generated an estimated $1.7 billion in economic impact for the Commonwealth in just four years BCEC has made TSW�s Top 10 list for 4 years Named 2007 Convention Center of the Year Key events support Massachusetts� economic development strategies Both the BCEC and the Hynes are consistent economic impact generators, but if we sit here �fat, dumb, & happy� will we continue to succeed? Will we be listed in the top 10? What opportunities are we missing? What are the Top 5 cities getting that we aren�t? We know the story of the past four plus years: Boston hosted its 1 millionth BCEC-generated hotel room night in 2008 BCEC events generated more than $522 million in 2008, a 9 percent increase over 2007 BCEC has generated an estimated $1.7 billion in economic impact for the Commonwealth in just four years BCEC has made TSW�s Top 10 list for 4 years Named 2007 Convention Center of the Year Key events support Massachusetts� economic development strategies Both the BCEC and the Hynes are consistent economic impact generators, but if we sit here �fat, dumb, & happy� will we continue to succeed? Will we be listed in the top 10? What opportunities are we missing? What are the Top 5 cities getting that we aren�t?

5. 1/28/2010 5 Boston will become a �Top 5� destination for conventions and meetings, substantially increasing its market share among North American competitors and enhancing the economic benefit to the City of Boston and the Commonwealth and be identified as the #1 destination in North America for international corporations and associations to hold meetings, conferences and exhibitions. Statement of Purpose Top 5 is defined as increasing market share and enhancing economic impact as a result. Defined by Trade Show Week as �The number of meetings, conventions and tradeshows utilizing 5,000 or more square feet of exhibit space hosted by a destination.�Top 5 is defined as increasing market share and enhancing economic impact as a result. Defined by Trade Show Week as �The number of meetings, conventions and tradeshows utilizing 5,000 or more square feet of exhibit space hosted by a destination.�

6. 1/28/2010 6 A Shared Vision for a Top 5 Boston Have Boston be continually recognized as the �BEST� convention and meetings destination in North America Make Boston a consistent �TOP 5� destination among North American convention and meetings cities Make Boston the leading international meetings destination in the US Build on the direct economic benefit we currently create here at the BCEC Host key events that support Massachusetts� core industries Achieving this shared vision requires not only BCEC Master Plan Expansion, but a shared and strategic approach to substantially increase Boston�s market share while maximizing the economic impact to the City of Boston and the Commonwealth. $936 million in investment by the Commonwealth [$850 million initial investment + $86 million operating and capital investment from 2004 � 2008] has produced over $1.7 billion in economic impact in just four years. We will demonstrate in this presentation that additional opportunity exists and that Boston and the MCCA is well suited to seize a large share of it. The Commonwealth has made significant investment in these facilities and the convention area to date If we don�t choose to capture these dollars other cities will Our responsibility is to be ready to take advantage of these opportunities and to do that we need to start now .  Achieving this shared vision requires not only BCEC Master Plan Expansion, but a shared and strategic approach to substantially increase Boston�s market share while maximizing the economic impact to the City of Boston and the Commonwealth. $936 million in investment by the Commonwealth [$850 million initial investment + $86 million operating and capital investment from 2004 � 2008] has produced over $1.7 billion in economic impact in just four years. We will demonstrate in this presentation that additional opportunity exists and that Boston and the MCCA is well suited to seize a large share of it. The Commonwealth has made significant investment in these facilities and the convention area to date If we don�t choose to capture these dollars other cities will Our responsibility is to be ready to take advantage of these opportunities and to do that we need to start now .

7. 1/28/2010 7 Leading Cities

8. 1/28/2010 8 How we will get there:

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11. 1/28/2010 11 Potential Buildout Option

12. 1/28/2010 12 Destination Challenges Destination Challenges Hotel Room Supply Transportation / Mobility Inherent Cost Massachusetts�s Bermuda TriangleMassachusetts�s Bermuda Triangle

13. 1/28/2010 13 Opportunities Lost Over the past 3 years, a total of 143 shows were lost due to Space, Dates or Rates at BCEC (Event dates ranged from 2007 � 2029) Total Room Nights Lost: 2.07 M Total Economic Impact Lost: $1.50 B Total Tax Benefits Lost: $92.3 M Over the same 3 years, 228 shows were lost at the Hynes, of which 69 shows were due to conflicts with BCEC business.

14. 1/28/2010 14 Cost Constraints Am Society for Therapeutic Radiology & Oncology (ASTRO) September 16-26, 2008 Attendance:���� 12,000 persons Room Nights:����34,200 (as of cut-off) Shuttle cost:��� $750K Am College of Rheumatology November 5-11, 2007 Attendance:���� 14,000 persons Room Nights:�� 30,500 Shuttle cost:��� Between $500-$550K �� Cost Constraints: Transportation & shuttling costs for the BCEC. In some cases the transportation cost can exceed the building rental costs The destination may be able to survive these costs for a first or second visit, but eventually planners will consider it prohibitive Boston room rates are double the national average National Average: $100.54 Boston: $211.40 (Source: Smith Travel Research) Current hotel RFP conducting a market demand analysis.Cost Constraints: Transportation & shuttling costs for the BCEC. In some cases the transportation cost can exceed the building rental costs The destination may be able to survive these costs for a first or second visit, but eventually planners will consider it prohibitive Boston room rates are double the national average National Average: $100.54 Boston: $211.40 (Source: Smith Travel Research) Current hotel RFP conducting a market demand analysis.

15. 1/28/2010 15 Comparison of Hotel Rooms Within � Mile of the Convention Center

16. 1/28/2010 16 Boston Hotel Development What�s Coming up the Pipeline: 2,200 rooms under development Likely to be small and 4-5 star based on high development costs New construction is expected to proceed at a slow pace These proposed new hotels do not meet our current requirements Expansion will require additional hotels With expansion we need 2,000 more rooms for a total of 6,000 Part of that development needs to be an additional 1,000 room headquarters hotel Mid priced inventory is necessary elsewhere in Boston Hotel Financing Options: Private: None Public � Private: Indianapolis, Washington D.C. *, Los Angeles, San Diego, Boston Tax Exempt Financing: Denver, Houston, Austin, Baltimore, Sacramento, Dallas * = In Planning Stages Current MCCA RFP: �on hotel financing and market demand� underway. What�s Coming up the Pipeline: 2,200 rooms under development Likely to be small and 4-5 star based on high development costs New construction is expected to proceed at a slow pace These proposed new hotels do not meet our current requirements Expansion will require additional hotels With expansion we need 2,000 more rooms for a total of 6,000 Part of that development needs to be an additional 1,000 room headquarters hotel Mid priced inventory is necessary elsewhere in Boston Hotel Financing Options: Private: None Public � Private: Indianapolis, Washington D.C. *, Los Angeles, San Diego, Boston Tax Exempt Financing: Denver, Houston, Austin, Baltimore, Sacramento, Dallas * = In Planning Stages Current MCCA RFP: �on hotel financing and market demand� underway.

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18. 1/28/2010 18 International Shows in Boston Boston ranked top destination in the United States for international association meetings, yet no single U.S. city ranks in top 20 (Boston is #45)

19. 1/28/2010 19 Next Steps Public Outreach and Dialogue The Convention Partnership: 27-member group to steward public study and analysis of feasibility of BCEC expansion Membership: Appointments by Governor, Mayor, Senate President, Speaker of the House; Includes South Boston Elected Officials, South Boston Community Development Foundation, Hotels and Tourism Groups, Watchdog Organizations, MCCA Board, Labor, Massport Analyze need for expansion, state of industry, potential expansion program, financing options, impact of expansion Conduct public meetings as needed Files a report to Governor, Mayor, Speaker and Senate President by December 31, 2010