Manchester was warned not to build in Austin

As the Reader has been saying for years, convention centers are vastly overbuilt in the U.S. As a result, the centers have to slash prices, and lose money, to attract business. But expansions go ahead because the purpose of these centers is actually to boost business of nearby hotels. Thus, this is the quintessential corporate-welfare operation.

More proof comes from Austin, Texas, where San Diego-based Manchester Financial Group has built a huge convention center hotel. However, the hotel was delayed for many months. Hotel experts in Texas warned that the market was saturated in Austin; some recommended Manchester abort the project.

It went ahead. Now, as expected, the market is badly saturated. So, predictably, hoteliers are politicking for an expanded convention center. On March 14, hoteliers convened a meeting, lobbying for a bigger convention center. "We're turning away opportunities, and we're letting other cities capitalize on it," said one hotelier. Sound familiar? That is the same tune played by hoteliers in San Diego. Doug Manchester, son of San Diego hotel tycoon Doug (Papa Doug) Manchester, is heading the Austin project.

Young Manchester told the hoteliers that three hotels, including Manchester's Fairmont Austin, get most of their business from conventions."The reality is, everyone wants to come to Austin. But frankly, we can't accommodate them as the number one offering because we lack the [convention center] infrastructure." In short, the hotels need more corporate welfare.