This story was updated at 11:50 a.m. to reflect that lodging revenue last year was up 25.8%
Buoyed by record revenues last year, Chattanooga's $1.5 billion-a-year tourism industry is looking at expanding the city's biggest convention facility by building onto or even replacing the trade center in downtown Chattanooga.
The Chattanooga Tourism Co. has commissioned a study by the Minneapolis-based consulting firm CSL to assess the need and feasibility of building a new and bigger convention center.
Barry White, president of the Chattanooga Tourism Co., told the Hamilton County Commission on Wednesday that a new facility could better meet the needs of today's conventions and accommodate bigger events and meetings than what the 38-year-old complex on Carter Street offers.
(MORE: Photos of Con Nooga at the Chattanooga Convention Center)
"A lot has changed since the trade center was first built in what people are looking for in their convention and meeting space," White said in an interview. "Especially in the post-pandemic era, people are looking for new ways to collaborate and to use outdoor spaces, and there are events that we have to turn away or not compete for because of the size restrictions of our Convention Center."
The existing center, which was built in 1985 and expanded in 2003, is 312,000 square feet, including 185,000 square feet of function space on one level.
White said the consulting firm's study, which he hopes to be completed by this summer, will explore the potential costs and benefits and make recommendations on how Chattanooga should proceed with its facilities for conventions, meetings and other events at the trade center.
"We don't know what the study is going to come back with, but it will look at the building, the area around the center and the hotel facilities nearby," White said.
The trade center is jointly owned by the city of Chattanooga and Hamilton County, which issued bonds to pay the $46 million cost of the initial convention center built in 1985. The city financed the $52 million expansion finished in 2003.
The trade center is governed by the Carter Street Corp. and its seven-member board of directors is appointed by the city and county mayors.
Any expansion or replacement of the existing trade center will likely require both the Chattanooga City Council and the Hamilton County Commission to approve issuing bonds or other financing means to pay for a new facility.
Initial concerns
The initial trade center and parking garage downtown were built despite initial concerns about its cost and competition with private hotels and facilities such as the Chattanooga Choo Choo.
The expansion of the trade center 16 years later coincided with the building of The Chattanoogan hotel and the Downtown Resource Center.
The trade center was built beneath the 320-room Marriott Hotel, first developed by former Chattanooga developer Franklin L. Haney as one of four such convention centers he erected in the early 1980s in Chattanooga, Knoxville, Nashville and College Park, Georgia. A 120-room Staybridge Suites was added on the south end of the Convention Center when it was expanded.
Since its opening, the Chattanooga Convention Center has helped attract more regional conventions, trade shows and business seminars to Chattanooga and has been a key part of the quadrupling in the size of Chattanooga's tourism industry over the past three decades, officials said. The convention business, which tends to be busiest during the school year, also complements Chattanooga's summer-oriented outdoor tourism attractions, they said.
Last year, the Chattanooga Tourism Co. helped service 177 groups that collectively brought more than 200,000 visitors to the center and other hotel and meeting facilities, White said.
Combined with leisure travel and other business travel in Chattanooga, tourists help support 31,300 jobs in the Chattanooga area, or one of every six jobs in the region, according to the U.S. Bureau of Labor Statistics.
CSL's research in other markets indicates the next generation of event attendees will want more flexibility in presenting hybrid events for both digital and in-person shows, as well as space for outdoor functions and nearby hotel and entertainment options.
"This assessment will analyze every aspect related to the Convention Center, including sustainability, size, type of space, operations and governance, competitive analysis, lost business, future needs and attendee satisfaction," the Chattanooga Tourism Co. said in a summary of the study. "Over the past decade, our hotel product and additional meeting and convention amenities citywide have changed dramatically, but the Convention Center has not."
The West Village has developed over the past decade just a couple of blocks from the center, and seven new downtown hotels are either being built or are in the planning stages to add more than 1,000 more hotel rooms.
With a free downtown shuttle and attractions such as the Tennessee Aquarium, the Children's Discovery Museum, the IMAX Theater, the Hunter Museum of Art, Finley Stadium and the proposed new Lookouts stadium within a mile of the Convention Center, White said Chattanooga offers a more complete package and walkable downtown for conventioneers than most cities.
The Chattanooga Tourism Co. estimates it will take about seven years to plan and build any new facility or major expansion of the existing center if the study determines it is warranted and local governments agree to help fund the project.
Music needs
In addition to its study on the trade center, CSL will also conduct a music venue needs assessment for Chattanooga, White told the County Commission.
Chattanooga has about 75 locations of varying sizes offering live music at different times, but only three of those venues have the capacity for more than 2,000 people -- the McKenzie Arena at the University of Tennessee at Chattanooga, Memorial Auditorium and Finley Stadium -- and none of them were specifically built to host live music.
"The local landscape is changing rapidly," White said, with both the Tivoli and McKenzie Arena undergoing renovations, the Barrelhouse Ballroom just opening on the Southside and Finley Stadium finding success with its largest concert yet by Kane Brown last year.
"In addition to our growth, the overall music industry has undergone substantial changes over the past several years, which increases the demand for appropriate venues," White said. "This study will focus on assessing existing venues, industry trends, demographics, attendance, comparable market benchmarking and potential user interviews."
Chattanooga's growing music scene and rebound in leisure travel coming out of the pandemic helped Chattanooga's tourism industry bounce back faster than most cities in 2021, White said. The Chattanooga Tourism Co. released figures Wednesday to the County Commission showing that overall lodging revenue last year was up 25.8% from the pre-pandemic peak reached in 2019, with a 5.4% increase in rooms sold in 2022 to a record high.
"We are a hot market, and we have several hotels under development because of that," White told the County Commission.
The new year is also starting strong with March hotel bookings up 13% and next month's hotel booking up 38% compared with comparable figures a year earlier, White said.
Contact Dave Flessner at dflessner@timesfreepress.com or 423-757-6340.
Trade center at a glance
— History: Originally built in 1985 and expanded in 2003
— Cost: $46 million for the initial facility and $52 million for the expansion
— Ownership: Jointly owned by the city of Chattanooga and Hamilton County
— Operator: The Carter Street Corp.
— Size: The 312,000-square-foot trade center includes 185,000 square feet of function space on one level. Column-free exhibit space totals 100,800 square feet in four halls and there are 21 meeting rooms ranging in size from 812 to 1,800 square feet.
— Annual government support: The city of Chattanooga and Hamilton County each provide $500,000 a year to support the Carter Street Corp.