City officials in Branson received a letter this month from Hilton Management Services stating the global company was ending its management contract for the Branson Convention Center.
With a termination date of March 31, the Branson Board of Aldermen last night considered a $250,000 contract amendment with St. Louis-based World Wide Technology Inc. to furnish computer hardware throughout the 220,000-square-foot convention center by April 1. Currently, Hilton shares its technology systems between the convention center and the connected Hilton hotel.
The city’s current contract with World Wide Technology expires June 30 and covers up to $50,000 in technology equipment.
Branson Economic Development Director Garrett Anderson said the first-reading bill would create a financial buffer as the city solicits proposals from other facilities management firms.
He said Hilton’s contract termination is tied to the company’s exit of managing both the Hilton Convention Center Hotel and the Hilton Promenade at Branson Landing. Hotel property owner HCW Development Co. on Jan. 17 hired Irving, Texas-based Pillar Hotels & Resorts LLC to manage the hotels beginning April 1.
“Hilton was not going to stay to do the convention center without the hotel. That puts us in a position to seek a new operator,” Anderson said, noting the city yesterday held a prebid meeting on-site and toured the center with a handful of prospects, including Pillar.
Anderson said about a dozen interested parties have requested bid information, and bids are due Feb. 11. The city plans to make its recommendation at the Feb. 25 Board of Aldermen meeting.
“It’s a fairly quick turnaround time. But looking at the few that were here yesterday, we’ve got some good operators to review,” he said. “It’s possible we could choose the same operator that HCW has picked for the hotel. We just need to go through that process for the convention center as well.”
The city owns the center and paid Hilton Worldwide Inc. $150,000 a year for management services.
Convention center operations have posted net operating losses every year since opening in August 2007, fluctuating between a $340,000 loss in 2010 and a $1.8 million loss in 2012, when the property was closed the bulk of the year from the
Leap Day tornado. While $20 million in repairs were ongoing during 2012, the property lost out on nearly a dozen conventions and hundreds of hotel room nights.
According to a financial report to the board last night, convention center business improved in 2013 but still remained $722,000 in the red for the year.
Operators have said the center contributes to Branson’s economy by bringing in groups that book hotel rooms, dine out and make purchases at retailers, theaters and attractions. A study released in early 2011 pinned the center’s economic impact at $16 million.
“It’s very typical for a convention center to be a loss leader for a community, where the community does not make a profit, but it will subsidize it by the increased visitation to the community,” Anderson said. “Getting to a break even would be great.”
Hilton’s year-end report showed event days and associated daily revenue – two key performance factors – bounced back last year to 2011 levels. The convention center posted 286 event days in 2013 with $14,341 in revenue per event day. Managers also said the Branson Convention Center performed better in meeting planner satisfaction surveys compared to the average Hilton properties. Overall satisfaction in Branson was 87.8 percent, a 4.6 percent clip above all Hiltons.
The Board of Aldermen plans to vote on the World Wide Technology contract amendment Feb. 11.
