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Downtown Phoenix facing costly glut of hotel rooms

PHOENIX -- Phoenix spent $600 million to triple the size of its convention center, and has added more hotel rooms to the downtown, but a convention expert said the city has yet to see a return on its investment.

Phoenix hosted three fewer conventions last year than it did in 2005. In fact, it hosted about the same number of conventions last year as it did in 1995. University of Texas-San Antonio public policy professor Heywood Sanders said quite a few of the rooms at the downtown Sheraton Hotel built to handle conventioneers have stayed empty.

Phoenix financed the building of that hotel. "The city tried for some years to find a developer who would invest in it, and failed," Sanders said. "So the city chose to go ahead and finance and build the Phoenix downtown Sheraton itself."

So far it has not been a success. The Sheraton's occupancy rate was 52.5 percent in the first three quarters of 2013, which is well below expectations. Downtown hotels had a combined occupancy rate of about 60 percent last year.

Sanders said that competition for convention business is fierce. While Phoenix was tripling the size of its center, Las Vegas and Orlando were doubling theirs. San Antonio and other cities have also financed hotels in the hopes of revitalizing downtowns by drawing more conventions, with little success.

Sanders had advice for Phoenix. "Don't do exactly what everybody else is doing, and think that somehow you're going to succeed. Build on your own community's assets," he said.

Greater Phoenix Convention and Visitors Bureau spokesman Doug MacKenzie pointed to the recession as a cause for the low numbers.

"People do remember that there was a recession just a few years ago," MacKenzie said, "but we are coming out of that. In fact, among the top 25 metro areas, greater Phoenix's hotel market recorded the seventh-highest increase in occupancy in 2013, and this trend is continuing in 2014."

MacKenzie also said that occupancy rates of downtown Phoenix hotels have grown for the past three straight years.

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About the Author


Years with the company: I started on January 2, 2006.

Education: I was born in San Antonio, Texas, but we moved to Phoenix when I was one-year-old in 1957. I grew up here and graduated from Alhambra High School and attended Phoenix College.

Family: I am married to my wife Rene', who is a librarian in the Washington school district. During free time, I may be found playing basketball in the driveway with my son, Devin. He's also keeping me busy with school, Little League, and playing in chess tournaments around the Valley.

Favorite food: Lots of favorite food, but our favorite restaurant is Fajitas.

Favorite spot in Arizona: The Little America Hotel in Flagstaff.

Favorite news memory: We have to go back to October 15, 1979. I was a country music air personality at KROP Radio in Brawley, California, when we had a 6.7 earthquake. Thankfully, there were no deaths and only minor injuries, but the entire community was pretty freaked out and listening to the station on their transistor radios. I would not want to go through an earthquake again, but it sure was a great night to work in radio and see how it can make a difference in people's lives.

First job: Working as a stringer for 'The Arizona Republic' at high school football games. My first real job was flipping burgers at the old Sandy's Hamburgers at 51st Avenue and Indian School Road. My first radio job was as announcer at KALJ radio in Yuma in 1977.

First concert: Doug Oldham gospel concert in the 1970s at the old East High School in Phoenix.

Favorite sports team: Phoenix Roadrunners minor league hockey. My dad took me to a game when I was in grade school, and I was hooked. I wanted to be a radio hockey play-by-play man. I used to take my cassette recorder and sit up in the rafters of the Coliseum and do play-by-play. It was great later in life to also take my son to Roadrunners games. Too bad the team just folded, I'll miss them. (Going to the Coyotes is fun, but they're not "my" team.)

Outside interests: My family and I are active in our church - Northern Hills Community Church in Phoenix. We enjoy going to movies, sporting events, and like to vacation at the Beach Cottages in the Pacific Beach area of San Diego. And I love to play catch, basketball, football with my son.

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