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The 3 Things Austin Has Right Now That Will Guarantee Future Hospitality Success

Austin doesn’t have the space to land meetings that end up in New Orleans or Chicago, but what the city lacks in size it makes up for in sheer buzz among meeting planners, the leader of the city’s convention and visitors bureau told a recent Bisnow audience.

The 3 Things Austin Has Right Now That Will Guarantee Future Hospitality Success
Director Lisa Hankamer of Marcus & Millichap, Neil Beldock of Pender Capital and President Tom Noonan of the Austin Convention & Visitors Bureau

Compared to the larger city names, Austin often is named as second tier or junior class, but a panel at Bisnow’s Hospitality and Tourism event at the Austin Hilton brushed aside those monikers in a discussion of what does and does not work about Austin as it grows.

Austin Convention & Visitors Bureau CEO Tom Noonan, for one, said the city is at a critical juncture for its future. The City Council appointed an 11-member Tourism Commission last month to consider how to move forward on a convention center expansion, as well as the potential creation of a tourism improvement district.

“I will tell you that the Junior National label sticks with me a little bit, and not in a good way, because I don’t think we’re a junior anything to anybody,” Noonan said. “We’re seen as one of the top, great all-around convention cities, and the No. 1 buzz city in the country right now.”

In other words, meeting planners want to make Austin their next destination, more than any other place in the country, Noonan said. A year ago, Austin trailed San Diego and Nashville. No longer. When convention planners were polled last month where they wanted to hold their next meeting, the top choice was Austin.

Austin City Council sent the question of a convention center expansion off to the University of Texas at Austin, a study that will be released this fall. If that expansion happens, it needs to be done in a way completely unlike the original convention center, Noonan said. The center should take on more of the feel of an urban campus, with high-rise elements, street-fronting retail, a green roof and a lot of activity through and around it.

“It's going to have to meld into the neighborhood, almost to the point where people should be standing in front of the convention center and not know it’s a convention center,” Noonan said. "It's got to be for more than just the convention traffic downtown. It's going to have to be part of the fabric of our downtown."

Moving to the top tier of convention cities will require work, but panelists agreed Austin already has some features working in its favor as the council mulls the future of downtown.

The 3 Things Austin Has Right Now That Will Guarantee Future Hospitality Success
CEO Doug Manchester of Manchester Financial Group, Project Director Bryan Kent of DPR Construction and National Hospitality Group Director Lisa Hankamer of Marcus & Millsap

Austin-Bergstrom Poised To Take Its Place As A Regional Hub

Austin has been hobbled in competing with many larger venues because of the lack of direct flights into the city. The addition of nine, mostly booked gates and the expansion of the presence of Delta Air Lines in Austin will impact that picture, Noonan said.

One of the biggest mistakes San Diego made was failing to relocate its airport to Miramar when offered the chance in the late 1990s, Manchester Texas Financial Group CEO Doug Manchester said. That stifled the growth of the city’s hospitality sector.

“Politics got in the way,” said Manchester, who recently opened the Austin Fairmont Hotel.

Now the option is lost: Military bases can no longer be converted to commercial use. Faced with the same decision, Austin converted the former Bergstrom Air Force Base, shifting the city’s airport from intown Mueller to Del Valle in 1999.

To move to the next level, Austin is going to have to break through to international markets over the next year or two, Noonan said. Bergstrom needs to see European destinations added to its routes in addition to Canada and Mexico and, soon, Frankfurt.

“In the next year or two, we really need to add four, five new European destinations,” Noonan said. “San Antonio and Austin both used to have 8 million in passengers. Now we have 15 million, and San Antonio stayed the same. Some are even predicting we have 25 million by 2025.”

That only happens with a plan for expansion, sliding Austin in as the third big airport hub in Texas, Noonan said. Los Angeles-based Pender Capital Senior Executive Neil Beldock agreed, saying nothing had stymied Los Angeles more than a lack of long-term planning.

“In a place that is growing — and Austin is clearly growing — you need to take as macro a viewpoint as possible,” Beldock said. “The lesson I like to put out there is that Seattle isn’t just 20 years out, they’ve set out a 40-year plan and approved the segmented funding. If you think that 20 years will work, it’s not enough.”

The 3 Things Austin Has Right Now That Will Guarantee Future Hospitality Success
Bryan Kent of DPR Construction, Lisa Hankamer of Marcus & Millsap

Austin Carries The Right Brand For Expansion

Marcus & Millichap Hospitality Director Lisa Hankamer has her own list of what will take Austin from small and hip to big and cool, and a lot of the words end with “ility” — accessibility, walkability, workability and even her own word, character-ability. 

“You wrap those around the entertainment venues, the arts, the education, the cleanliness, and you can see Austin’s doing an incredible job already,” Hankamer said.

Noonan told the audience that J.D. Power’s Destination Experience Satisfaction surveys indicate Austin’s brand is a city that is both safe and clean.

“New Orleans is a great convention city, but do you think people refer to it as clean? Safe?” Noonan said. “I don’t think so. You can lose a lot in those categories and still be successful.”

Manchester said he had even borrowed one of the “Keep Austin Weird” taglines: Don’t Dallas my Austin and applied it to his own hometown. He told a crowd in San Diego recently, “Don’t Los Angeles my San Diego,” and got a standing ovation from the audience.

“From the perspective of the new guy from California here, the No. 1 greatest asset that sets us apart from Dallas and San Antonio and Houston is that those cities missed a few pivotal key classes in urban planning,” Manchester said. “When you’re engaging in curb cut appeal, Austin is a slam dunk in people’s minds. Once we get this amazing Waller District going and we finally do have everyone’s support on the convention center expansion, all that uniqueness that is Austin is still going to be there.”

Hotels Already Are Making Significant Inroads Into Capacity Issues

To add bigger events to Austin — in addition to SXSW and Austin City Limits — it is going to have to add hotel rooms. That the city already has begun the process of adding another 660-room convention hotel on top of the Fairmont, Westin and Hilton bodes well.

“I think we have a very optimistic landscape,” Manchester said. “We already have the hotel supply to support the expansion of the convention center.”

The activity of the Tourism Commission and the actions around the new money set aside for heritage activities will both be critical, Noonan said. Manchester added that the hotels were the first to step up to underwrite solutions to the ongoing challenges of downtown: getting the Waller Creek corridor off the ground and addressing the homeless problem.

“A lot of what we’re talking about is really creating a lot of good, positive change the city can embrace,” Manchester said. “I’m proud the hotels are already doing that."