Myth vs. Fact

Exploring False CLaims about the convention center expansion

Despite claims to the contrary from from the convention industry, Austin can grow tourism and legally increase funding for music, arts, preservation, parks, small businesses and homelessness without spending over a billion dollars on a new convention center. 

MYTH: Austin can only use hotel tax dollars for an expanded convention center.

FACT  Under State Law, the City of Austin can spend unlimited dollars on tourism and promotion. Those funds could be used to promote the things that make Austin great—live music, arts and culture, history, parks, and local businesses.

MYTH: Without an expanded convention center, tourism in Austin is at risk.

FACT  The Convention Center accounts for less than 4% of all tourism in Austin (according to the Visit Austin Marketing Plan). Austin’s tourism has been and will continue to grow by leaps and bounds because the rest of the world has discovered that Austin is a great place to be because of our live music, our local businesses and restaurants, our arts and culture, and beautiful natural setting. (KXAN investigated and covered these figures in a story last year.)

MYTH: Without an expanded convention center, arts and preservation funding is at risk.

FACT  The expansion threatens arts and preservation funding. If the expanded center does not meet projections, or there are construction cost overruns, there will not be additional funding for arts and preservation. Further, instead of investing more than $1b in the Center expansion, Austin could invest some of that money into arts and preservation to greatly increase its current funding.

MYTH: Hotel tax revenue growth is slowing because the convention center is too small.

FACT  Last year alone, local hotel occupancy tax revenue increased by $ 6.7 million (7.2%, according to State Comptroller data). Moreover, the growth of Austin’s tourism economy is greatly outpacing the general Austin economy by almost 50%. Meanwhile hotel occupancy tax revenue has grown by 60% over the last 5 years while the convention center size and attendance has remained relatively flat.

MYTH: We need to expand the convention center in order to attract more visitors and build Austin’s brand

FACT  Even those who support a $2-billion-plus, 30-year commitment to expanding the Convention Center admit that the expansion cannot pass a cost-benefit test. As the UT Study commissioned by the City plainly says, “Whether or not such an expansion is justifiable therefore depends on the value one assigns to other benefits, such as enhancement to Austin’s “brand value…’” That’s their top selling point: adding to Austin’s brand.

We think the opposite is true: an expanded center will siphon off more than a billion dollars of local tax revenues that could support Austin’s real brand and soul—the people, places, and activities that we love most, that drive tourism, that are uniquely Austin, and that most often suffer in our City.

MYTH: All convention centers are subsidized, that’s the business mode

FACT  Paint us skeptical and fact-driven. We’re looking into this one more, through the literature on convention centers to find out whether center are always subsidized above certain scales. What is clear is that the convention center in Los Angeles, like other Centers across the country, actually make money for the city. Also, as the Comptroller for the State of Texas found, ”A 2012 report by Citylab, for instance, noted that U.S. convention space had risen by 50 percent in the preceding 20 years, yet ‘attendance at the 200 largest conventions peaked at about 5 million in the mid-1990s,’ and had declined steadily since.”

MYTH: We must expand the convention center to get additional funding for homelessness.

FACT  There are two ways Austin can create additional funding for homelessness without expanding the convention center.
1.) The Tourism Pubic Improvement District (TPID) could be created without an expansion of the Convention Center. (San Antonio has a TPID which they spend in ways other than what Austin Hotels may and have proposed.) Yet the hotels are threatening not to create the district, and funding for homelessness, unless the Center is expanded.
2.) The City could use a portion of the hotel tax revenue currently going to the convention center to offset general fund costs, freeing up substantial funds for homelessness.