The coronavirus pandemic caused our society to come to a screeching halt over the past 15 months. Now, things are finally starting to reopen and travel is beginning to pick up -- something hotels are extremely grateful for given the brutal financial hit they took in 2020.
But there's a difference between an uptick in leisure travel and the notion of gathering thousands of people under the same roof for massive conferences and conventions. Not only is business travel expected to lag behind leisure trips in the near term, but large-scale indoor gatherings may continue to be off the table even at a time when a growing number of Americans are getting vaccinated against COVID-19 and the CDC is loosening up in a very big way.
That's problematic for New York City in light of its recent $1.5 billion investment in Midtown's Javits Center, the city's largest convention space.
Though plans to revamp the Javits Center were put into place before the pandemic, the city has already sunk financial resources into adding roughly 1.3 million square feet to that space in the form of meeting rooms, a rooftop pavilion, a ballroom, and a staging area for the trucks that deliver conference exhibits. And now, the question remains -- was all of that work for nothing?
Will conventions come back?
By early summer, the Javits Center should be nice and ready to host conventions and other events. But whether organizers will bite is a different story.
The Javits Center's most prominent annual events have been canceled since the pandemic broke out. These include the New York International Auto Show and Comic-Con.
Over the past 15 months, the Javits Center has functioned not as a convention center but as a healthcare facility. Early on in the pandemic, it was converted into an emergency hospital with 2,500 beds. Then, after sitting empty for several months once hospitalizations declined, it reopened as a coronavirus vaccine center, providing more than 10,000 shots a day. But at this point, many New York City residents have gotten a jab, and the Javits Center should be in a solid position to revert back to serving as a convention center -- that is, if anyone wants it to.
New York City itself intends to reopen in full come July 1. But that doesn't mean event organizers will rush to book plans.
Another issue with the Javits Center itself is that it's located in a mostly industrial part of New York City without easy hotel access. New York Governor Andrew Cuomo recently announced that the state would seek bids for a lot just east of the Javits Center that could be developed into a hotel to better draw in visitors.
But even if that issue gets resolved, it could still be quite some time until large-scale conventions are reintroduced into the mix. And that could deal quite the blow to New York City, which relies on massive events to bring people in to shop and dine locally and to stay at area hotels.
So far, the pandemic has cost the Javits Center an estimated $200 million from canceled events. And the longer it takes to bring conventions back, the more money the facility is apt to lose.
Incidentally, New York isn't the only city to have invested heavily in convention centers recently. Over the past few years, Las Vegas, Seattle, and San Francisco have collectively invested billions to make their convention halls bigger and more appealing to event organizers and guests alike. But while things may be improving with regard to the pandemic, it could be quite some time until conventions regain their popularity, and investors will have to sit tight and ride things out until that happens.