Will the convention hotel be a boondoggle? Signs point to yes


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Denver built a convention hotel. Why not look at the results?
  • Denver built a convention hotel. Why not look at the results?

A hospitality consultant has come up with numbers supporting the idea of building a 1,000-room convention hotel in downtown Kansas City, Missouri. The consultant based the report on surveys of convention planners, who were asked what kept them choosing from KC as a site for their meetings.

In this week's Martin column, I question the consultant's data. It seems strange to me to rely on speculative convention bookings when real-word data is available.

In recent years, several cities have opened convention hotels like the one Kansas City is considering. Why not look at what's happened in those places?

The answer may lie in the fact that mega-projects become boondoggles almost as a rule.

A Danish professor named Brent Flyvbjerg collected information on 258 transportation projects completed worldwide. He found that nine out of ten of them went over budget.

Here's more on Flyvbjerg's research from a 2008 edition of Miller-McCune magazine:

The vast majority of public works projects go drastically over budget

and aren't as well patronized as proponents claim. He also found that

modelers didn't seem to be improving their estimates over time; the

scale of overruns remained relatively constant. Rail and highway

projects are often the worst boondoggles, and they form the bulk of

Flyvbjerg's research. But other researchers have found dangerous

overoptimism in all kinds of megaprojects.

One way to compensate for the overoptimism problem is a technique called reference-class forecasting.

This method encourages planners to focus on actual outcomes -- what happens in the real world. Reference-class forecasting attempts to diminish the roles that overconfidence and unrealistic expectations come to play when public officials get a notion to tear up some ground and build something monumental.

Like, say, a convention hotel.


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