Too many Kansas City hotel rooms prompt call to halt tax incentives

KANSAS CITY, Mo. -- A study commissioned by the city's tourism agency, Visit KC, suggests that Kansas City may have too many hotel rooms.

Some are concerned that a new taxpayer subsidized convention center hotel may make it harder to keep existing hotels busy.

The new Loews convention hotel will have 800 rooms when it opens next year.

And the Visit KC study concludes that may drive occupancy rates below what's considered normal in the hotel industry.

The tourism agency says the city should stop tax incentives for new hotel projects, at least until demand catches up with the growing supply.

The convention hotel project was sold to taxpayers as a way bring back large gatherings like Wal-Mart and Skills USA that left Kansas City in recent years.

But the Show-Me Institute, a libertarian think tank, says tens of millions of tax dollars have been poured into downtown, and convention business has actually dropped since 2000.

"Certainly this doesn’t make the argument that taxpayers should be subsidizing private development," said Patrick Tuohey, of the Show-Me Institute. "More immediately it tells us the Economic Development Corporation of Kansas City is not paying attention to the long run. Subsidizing construction today and doesn’t seem to know what’s coming tomorrow.

The idea that we have too many hotel rooms downtown should not be a surprise to anybody who’s paying attention."

The Hotel and Lodging Association of Greater Kansas City tells FOX 4 that Visit KC needs more funding to market what it calls a great product in downtown. The group says the occupancy rate may dip next year, but the metro area will sell more hotel rooms, which is a good sign for the long term.

"We need to pause and take a breath," said Kurt Mayo, executive director of the Hotel and Lodging Association. "Let’s start selling what we’ve got. We’ve also got the best product we’ve ever had. Many of the downtown hotels have reinvested in their properties. We’ve got the best product we’ve ever had."

Mayo is confident a bookings boost will follow and says no hotel faces closure because of oversupply.

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