Salt Lake City convention hotel is pushing skyward. Will conventions bounce back?

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Salt Lake City’s new 700-room convention hotel is rising fast, but will the world it was meant for return?

Construction of the Hyatt Regency skyscraper downtown will reach its full height of 26 stories in mid-November, just shy of two years after government dignitaries and hotel industry executives broke ground on the tower being built near the Calvin L. Rampton Salt Palace Convention Center.

The reflective and curvilinear hotel at West Temple and 200 South is set to open in late 2022. And like a tall stack of glass poker chips, it represents a major bet that in-person conventions and large corporate meetings will come back post-pandemic.

“This has been a time of uncertainty,” said Kaitlin Eskelson, president and CEO of Visit Salt Lake, a nonprofit promoting the city as a travel destination. “We are still in recovery mode but are making bold plans for the future.”

The $337 million hotel is meant to lift the Salt Palace by drawing more large crowds of visitors — and their spending — to Utah’s capital. It was debated and extensively studied off and on for almost two decades before shovels finally turned dirt in January 2020, with taxpayers chipping in $75 million in incentives to the hotel’s developers.

Signs of an upturn

Then, of course, the coronavirus pandemic all but decimated air travel and large face-to-face gatherings in a matter of weeks, not to mention short-circuiting the kinds of large-scale conventions that have drawn thousands of attendees from across the globe to the Beehive State.

A sharp rebound that tourism and travel boosters were predicting in late 2020 and early 2021 has since been stunted by the delta variant, persistently high COVID-19 case rates and wariness among event organizers.

Untold numbers of meetings of all sizes also shifted to platforms like Zoom and Google Meet as the people who typically hold conventions — businesses, governments, faith groups, academics and industry and trade associations — forged new and often less-costly ways to bring their members together and interact virtually.

Convention boosters acknowledge many of those groups may never fully return their prior in-person days and that virtual and hybrid gatherings are here to stay.

All the same, those in the convention and trade show industry say they are seeing signs of a gradual upturn for the sector that drew hundreds of millions of attendees yearly to events worldwide pre-COVID.

“Shows are happening now in all major cities,” said Cathy Breden, CEO of the Dallas-based Center for Exhibition Industry Research. That group’s forecasts for a busier second half of 2021 are also coming true, Breden said, thanks to groups that have rebooked venues after postponing shows in 2020 and early 2021.

Travel woes

Business-to-business exhibitions in the U.S. had an economic impact of $101 billion in 2019, according to the center, and the sector was on track to reach $105 billion last year — before COVID. That instead nose-dived to $24 billion in 2020, and Breden said it’s too early to project for 2021, though the outlook is improving despite obstacles.

The pandemic plunge in conventions was as much about travel restrictions imposed around the world as it was caution over gatherings, and many of those remain in place or have been reimposed. Forecasts from the U.S. Travel Association indicate that domestic and international business travel won’t be back to 2019 levels until at least 2023.

Show cancellations have slowed dramatically for Visit Salt Lake, but they’re still happening. Three big conventions recently pulled the plug on plans to huddle in Utah, including the American Fly Fishing Trade Association, the Fellowship of Catholic University Students, and the National League of Cities, after a cascade of cancellations with the onset of the pandemic. All three, though, have rebooked their shows for a year or more out.

“We’re still not out of the COVID woods yet,” said Mark White, chief sales and services officer for Visit Salt Lake, who added that attendance is averaging about half what it would be otherwise. “People are still a little leery to travel.”

Silicon Slopes, a trade association for Utah’s technology sector, went ahead with its fifth yearly summit at the Salt Palace in mid-October, with a crowd of about 15,000 attending in person and online, organizers said, down from previous years of about 20,000 participants. It’s hard to know how many actually showed up for the two-day show’s lineup of speakers and seminars and how many dialed in, because some attendees did both, a spokesperson said.

On-site participants were required to test negative for COVID-19 or be fully vaccinated, organizers said, and filled out short health questionnaires, along with being encouraged to wear masks when they couldn’t social distance.

“We felt the combination of all our health and safety protocols made for a very safe summit,” the spokesperson said, adding that in-person gathering proved to be a welcome relief for many in Utah’s tech community. “People needed to connect and this year we heard from attendees that it was so refreshing for them to reconnect with colleagues and friends.”

Silicon Slopes, which has rented Salt Palace spaces for the summit since 2017, added that it plans “to continue that relationship for years to come.”

‘Recovery and resilience’

White said Visit Salt Lake now has 119 meetings, sporting events and large conventions booked for upcoming years, with the potential to attract up to 430,000 participants. Fully 75 of them are large conventions on a calendar stretching past 2025, and the group is in talks with organizers of 42 other conventions that could be held in 2022.

“It’s not where it was in 2019 and 2018, for example,” White said, “but it’s certainly picking up.”

Going by the latest estimates, each of those visitors will spend about $971 apiece while they’re in town, which could amount to a crucial factor in Utah’s overall economic recovery from the pandemic.

A study by the University of Utah’s Kem C. Gardner Policy Institute, issued in June, predicted that urban travel will “regain momentum this fall as concerts, conferences and conventions return to the capital city’s calendar” — and sooner than previously estimated. Utah’s hotel occupancy rates climbed back to pre-pandemic levels last spring, the study noted.

Utah’s state and national parks, meanwhile, took in 2.1 million more visitors in the first half of 2021 compared to the same time in 2019. The number of passengers arriving monthly at the new Salt Lake City International Airport topped 2019 levels in July, at almost 2.5 million.

In June, Visit Salt Lake launched a rebranding campaign, called “West of Conventional,” aimed at luring visitors by emphasizing some Salt Lake City’s quirky combinations, including a vibrant urban culture juxtaposed with the scenic Wasatch Mountains minutes away. The ad drive is running nationally as visitor numbers start to pick up.

Eskelson, CEO at Visit Salt Lake, said her team “continues to monitor trends and pivot as we learn to navigate changing situations.” The nonprofit has also avoided heavy layoffs through the pandemic, she said. That’s due in part to budget moves by Salt Lake County to keep funding intact with pandemic relief money, even as revenues from hotel room taxes that normally help fund Visit Salt Lake declined sharply.

“This positioned us to be nimble and be well-situated to take advantage of new opportunities as they arise,” Eskelson said. “We’re confident we have the best team in place for recovery and resilience.”

Finding ‘the right mix’

The Hyatt Regency Salt Lake City will be a full-service hotel with lots of luxury amenities, including a grand ballroom and other features considered crucial for accommodating conventioneers. It’s being built by two private firms, Atlanta-based hotel developer Portman Holdings and DDRM Partners, located outside St. George, in a partnership with Salt Lake County, which owns the Salt Palace.

Incentives promised to the two firms involve nearly $75 million in special sales and property tax rebates to be awarded once the hotel is built and operating — including giving county-owned land beneath the Salt Palace site to the hotel’s partners. According to projections three years ago by state economic development officials, those incentives will yield $281 million in added capital investment over 20 years.

The hotel will be “seamlessly” connected to the Salt Palace, its designers say. Along with 700-plus rooms, the new hotel and adjoining complex will feature a 45,000-square-foot grand ballroom, nearly 164,000 square feet of additional meeting spaces along with 515,000 square feet of exhibit halls.

Breden, with the Center for Exhibition Industry Research, said there’s a nuanced picture for the impact that virtual and hybrid meetings ultimately may have on reducing in-person convention attendance.

“This all depends on the audience and their needs,” she said. Research “shows us that people prefer virtual platforms for consuming content and in-person environments for relationship building, new product demos and networking.”

“The key,” Breden added, “is to find the right mix to engage your specific audience.”

Visit Salt Lake and Chicago-based Hyatt Hotels & Resorts, which will operate the Hyatt Regency Salt Lake City once it opens, have also sought to get ahead of those emerging trends. They’ve incorporated a 500-square-foot, state-of-the-art media center in the hotel for use by meeting and convention organizers to create the virtual portion of their events.

High-tech for ‘hybrid’

The media center has been “strategically engineered” with the latest technology, the group said, including high-end cameras, digital video and audio production facilities, and a complete studio with lighting, desks and scenic background views. Conventioneers will also have access to five portable sets for off-site venues, each with its own kiosk of monitors for video playback.

The center will give customers the ability to stream content, produce podcasts, hold VIP receptions and take their multimedia offerings for off-site guests to a new level of quality, according Jarrod Finley, pre-opening director of sales and marketing for Hyatt Regency Salt Lake City.

“It’s essentially going to be the fastest, most efficient technology on the market,” Finley said, “and we’re having that infrastructure built into the hotel” including high-capacity network cabling throughout the building.

“It just gives us some technology enablement to look at meetings in a different way,” he said. Lobby areas, guest rooms and meeting spaces in the hotel have been designed to be touchless wherever possible, and the hotel will feature a six-floor terrace for outdoor events of up to 300 people.

“Those are the types of things that make attendees feel safe and secure,” Finley said. “We want to make sure we’re providing that for our guests.”

Hyatt Hotels & Resorts expects that up to 70% of revenues from the Hyatt Regency Salt Lake City will come from groups and conventions, so the multinational hotel operator has a lot riding on how those events come back to life.

“My goal when we open the hotel in fall of ‘22,” Finley said, “is to be bursting at the seams.”