HONOLULU — The Hawai‘i Convention Center achieved its best revenue performance since the center’s opening in 1998, which along with strong net income saved $8.9 million in state subsidy this fiscal year.
Teri Orton, convention center general manager, said the facility’s gross revenue was $28.9 million, compared with a budget of $18.4 million. That was an increase of 57 percent, or more than $10.4 million, over expectations. Orton added that net income amounted to $3.4 million, exceeding fiscal-year budget expectations by $8.7 million.
“These are the best results in the convention center’s history,” Orton said. “Through the years, the average revenue attained has been about $16 million. We’ve almost doubled the revenue for the building since ASM Global took over.”
She said the results were largely from the combination of “citywides,” the industry term for large events that spread business across multiple venues, as well as offshore events and the growth of corporate business and local business. Food sales also surpassed expectations, and the center has been creating new products to diversify its business.
Over the past 12 months ending in June, HCC hosted more than 250 events, including 21 citywides and 235 local events, welcoming over 410,000 attendees. Orton said 50 percent of the citywides this fiscal year were moved from the pandemic, and the other 50 percent were new business.
She said the state economic impact and tax generation of the 21 citywides amount to $390.9 million and $45.7 million, respectively. It also highlights the correlation between stronger financial results and the right mix of citywides, and association and corporate events, which tend to spend more on food and beverage at the convention center and the hotels where they stay.
Orton said four corporate events were part of the mix this year at HCC, including Best Western, which generated $1.5 million in gross revenue; Applied Materials, which generated $1.3 million; AIL Global Life, which generated $378,000; and Capricorn, which generated $137,000. She said corporate business tends to increase revenue because it usually includes opening and closing receptions and other big food and beverage events. High-performing attendees whose trips were paid for as an incentive also tend to have fewer personal spending limits, Orton said.
“When we have years with four to five corporate events along with business from the association and Asian market segments, we generate more revenue at the center, which reduces our state subsidy and still fulfills our primary goal, which is to fill hotels,” she said. “It’s the secret sauce to success for everyone.”
Orton said the center was built to support offshore business, which fills hotel rooms. She said offshore business, which comes from outside Hawaii, always will be the center’s focus and purpose. One of the brightest lights for fiscal year 2024 was FestPAC, the 13th Festival of Pacific Arts & Culture, which convened June 6-16 in Hawaii. Orton said the center served as the main venue for the event, which brought about 2,200 delegates from 26 nations and attracted 100,000 attendees.
However, she said business ebbs and flows due to recessions, pandemics and natural calamities, including the economy in the U.S. and abroad.
“ASM Global, the building operator, took the approach of diversifying our strategic business plan for short-term business to help offset the expenses to keep the center subsidy from the state to a minimal,” she said. “Creating new market segments to diversify our business at the center has helped to generate revenue in times when offshore business was not strong.”
Orton said that’s why another contributing factor to the center’s success this year was an increase in local events such as Made in Hawaii, the Okinawan Festival, Honolulu Festival, local sporting events and more. She said over the past decade, ASM Global has grown local business to $13 million annually from $4 million.
“Opening the center to our local community as a venue for business meetings, concerts, parties, trade shows and sporting events helps to fill the calendar where we don’t have large offshore conferences,” Orton said. “As the general manager of the Hawai‘i Convention Center, I have really looked at ways to utilize the center in a nontraditional way.”
She added that ASM Global has seen success from the introduction of new sports segments at the center. She said since purchasing volleyball and basketball equipment in 2017, the center has hosted over nine tournaments a year.
Orton said HCC recently purchased 45 pickleball courts and will host its first indoor pickleball tournament in November, and has another on the books for April. She said HCC also plans to partner with the Oahu Pickleball Association to use its exhibit halls for open play.
Orton said HCC also plans to purchase immersive technology equipment that will allow it to host its own immersive shows in the style of “Claude Monet: The Immersive Experience” and the “Van Gogh Exhibition: The Immersive Experience,” which previously have come to the center.
“We are planning a holiday immersive experience this year,” she said. “It’s going to be amazing. There will be interactive trees and a snow-lit forest and a section with Christmas lights. There will be a snow pit with balls where the kids can play.”
The center also is developing new cultural exhibits.
Orton said she has focused on “creating new business opportunities and opening the center to our local community” and on “working closely with the (Hawai‘i Visitors and Convention Bureau) sales team to diversify our offshore business and increase the number of events they bring to the center.”
Orton said this year’s results were the third year in the decade since ASM Global has managed HCC that the center has achieved a break-even or positive bottom line. She said that in 2017 the center achieved net income of more than $1.3 million and gross revenue of more than $17.5 million. In 2016 the center’s net income was $808,245 with gross revenue of more than $16.05 million.
Orton said the financial results are exceptional given that the center still is coming back from a COVID-19- related drop in large conventions and meetings. Prior to COVID-19 the center was averaging about 28 conventions per year, as compared with 21 this year.
She said the goal now is to bring at least 25 to 28 citywides and four or five pieces of corporate businesses to the center.
Orton said on the whole 2024 was a good year, and with HVCB now having a full sales force, 2025 is expected to be another good year.
Through the first six months of 2024, some 241,253 visitors came to Hawai‘i by air to attend a meeting or convention or to take an incentive trip, according to statistics from the state Department of Business, Economic Development and Tourism. That was up 11.9 percent from the same period in 2023.
Orton said business after 2025 is slower, but the center will use 2026 to repair its leaky roof, a $64 million project that also includes installing a shade covering so that it can be used during daytime sun or inclement weather.
She said the sales team is working hard to build business in 2027 and beyond.
“More leads are coming in, but we don’t have as much business on the books. There are less than 10 citywides on the books from 2027 onward,” she said.
Orton said HCC is still on the road to recovery from the pandemic, but there are positive signs. For starters, she said, the center is seeing more inquiries and bookings in a three- to seven-year window for citywide events from associations and meetings.
“Traditionally, the booking window was five to 10 years out. So the booking window has shortened. That’s great for us because we need short-term business,” Orton said.
Orton said another new development is the acquisition of ASM Global by Legends, whose client roster includes many top sports brands such as the Dallas Cowboys, Real Madrid, SoFi Stadium, One World Observatory, FC Barcelona, University of Notre Dame, New York Yankees and Ryder Cup, as well as leagues and properties such as the NFL, MLB, NASCAR, PGA of America and FIFA World Cup.
She said the acquisition is expected to be completed in the next two weeks.
