Dean Dennis strolls the lower level of the Renasant Convention Center picking up discarded wrist bands and smaller stubs of litter. 

He explains how the lower level entrance was just a concrete wall before the center’s $200 million makeover a year ago. Now, the modernized convention center boasts two outdoor patio areas, a view of the Mississippi River, Mud Island and easily accessible breakout rooms to complement the center’s main 118,000-square-foot exhibit room. 

Yet, despite the upgrade, Dennis, senior vice president and general manager, worries the center is still missing a key element: a suitable hotel presence. 

Renasant Convention Center boasts $200 million makeover

According to a report from Pinkowski and Co., there are eight hotels under construction in the Memphis area, including four planned to launch this year. Between 2023 and 2025, 42 hotels are scheduled to open. 

Despite the influx of nearly 7,000 hotel rooms over the next few years, the lack of rooms adjacent to the Renasant continues putting strain on the convention center. 

‘Small hotels won’t help’ 

“We still need another big hotel near the convention center,” said Chuck Pinkowski, founder and CEO of Pinkowski and Co. 

While a potential renovation to the nearby Sheraton would benefit Renasant, Dennis said the hotel still needs at least two hotels with a total of 1,500 rooms close to the convention center. 

He said despite the renovated convention center and improved amenities, the Renasant still is a burden for event planners because larger 2,000- to 3,000-person events can be tough to accommodate. There are hotel rooms available, but the group is forced to be spread out. 

That gap impacts how many large and top tier events the center can attract. 

“Small hotels won’t help the convention business in Memphis,” Wayne Tabor of the Metro Memphis Hotel and Lodging Association said. “It’s inconvenient for meeting planners to do that.” 

According to the Memphis Tourism 2021 annual report, 10.7 million visitors came through Memphis and Shelby County. Those visitors accounted for 4.1 million hotel rooms sold, a 93% recovery rate compared to 2019 figures. 

Of those 4.1 million hotel rooms, 30,500 of those were directly booked as convention room nights. In total, 2021 events accounted for $116.6 million in economic impact, according to the report. 

“Small hotels won’t help the convention business in Memphis. It’s inconvenient for meeting planners to do that.”

Wayne Tabor, 
Metro Memphis Hotel and Lodging Association 

According to its 2022 report, the convention center is hosting 132 events this year. Those events have an estimated economic impact of $55.6 million and will occupy 71,000 hotel rooms. 

Despite some lodging limitations those figures have been cause for optimism for some industry personnel. 

“Memphis is on the verge of something big,” Peabody Hotel President Doug Browne said. 

While Memphis continues to benefit from events and leisure tourism, Browne was critical of the city’s inability to draw “lift.” 

Without larger conventions coming to Memphis, direct flights continue to be limited, he said. Compared to Nashville, which built its Omni Hotel in 2013 next door to a renovated Music City Center, Memphis’ ability to draw larger crowds continues to be neutralized. 

“They can easily go to many other cities: St. Louis, New Orleans, Nashville; and have all of those rooms in one hotel or two,” Browne said. 

Financing big hotels is challenging

Memphis Tourism CEO Kevin Kane said one of the main issues with big hotels remains financing. 

“It is much easier to get financing for a 100-room hotel,” he said. 

In February, the proposed 500-room Loews Hotel deal was scrapped due to financial pressure.

The hotel, which had been in the planning stages since 2018, was expected to serve as a nearby convention center hotel before Loews representatives pulled out.

The plan was put on hold in 2020 before officially coming to an end earlier this year. 

Loews Hotel deal is off

While the project was a disappointment, Kane said that Loews still wouldn’t have been a solution by itself. 

Kane said the market has less than a dozen large hotels (upwards of 300 rooms), citing the Guesthouse at Graceland, the Sheraton in Downtown, the Peabody Hotel and the combined trio of Hyatt hotels at One Beale as the main large group destinations for guests. 

In East Memphis, the hotel pipeline faces a different issue. 

Tabor said the East Memphis market is still largely dominated by office space and naturally the market is entirely different, focused on corporate travel. 

The hotel designs along the I-240 loop and Poplar Avenue are built as one-offs because most visitors are coming to East Memphis for business. 

While the Memphian in Overton Square opened last year and two hotels and 240 rooms are expected to be built at Liberty Park, there are few self-service hotels in East Memphis that offer a quick trip to the core of Memphis attractions and Downtown.

Southaven has sprouted up as an alternative, Tabor said. 

“It’s only a 12-minute drive to Downtown Memphis,” he said.

Out-of-state guests also pay less in hotel tax and are still only 15 miles from some of the more notable regional destinations. 

There are 13 hotels planned or proposed for Downtown compared to 10 in East Memphis, including the recently announced 130-room hotel planned at the Legacy at Courtyard development near Colonial Country Club. 

The Towneplace Suites by Marriott next door to Ikea is the only one of those 23 projects expected to be completed this year.

With the remaining projects estimated to open in 2024 and beyond, the focus comes back to Downtown and how the city is handling its convention center dilemma amidst a sea of smaller hotels. 

“Most of Shelby County comes into play when we have a big event,” Kane said. 

A ‘convention center campus' in jeopardy

The potential answer — so far — seems to be One Beale. A three-hotel, 725-room site at the corner of Beale Street and South Front Street. Carlisle Corp. has spent more than $400 million building the Hyatt Centric, Caption by Hyatt and Grand Hyatt (the latter of which is still awaiting construction and public financing).

The Caption by Hyatt, which is the world’s first for the brand, opened on Wednesday, June 28. The Grand Hyatt is expected to open in 2024.

Carlisle CEO Chance Carlisle describes One Beale as a “convention center campus.” The scope of the project came out as a potential answer to the convention center issue and avoiding a piece-meal approach to where large groups of visitors could stay.

The issue — at the moment — is perhaps in perception.

With the 365-room Grand Hyatt still under construction the impact that block has is still in a waning period. 

Following a special session with City Council on Thursday, July 14, which saw Mayor Jim Strickland refuse to sign off on a revamped $66.5 million public financing plan to complete the Grand Hyatt project, the 365-room Grand Hyatt’s financing has stalled.

With the pause, the impact that block has is still in a waning period. 

During the Caption by Hyatt grand opening celebration that same day, Carlisle said his team had secured their portion of private financing and are waiting on city approval to begin construction. 

“No one wanted to be in this situation,” Carlisle said. “The Grand Hyatt is a great investment and gives us the ability to draw events… like the (NBA) All-Star game.”

Carlisle said there seems to have been some miscommunication between his company, the Center City Revenue Finance Corp., City Council and the Strickland administration.

Inside the world’s first-ever Caption by Hyatt in Downtown Memphis

The gap became clear as concerns and more questions regarding the public financing portion of the project arose during Thursday’s meeting.

Despite the potential impasse following the special session, Carlisle remains optimistic there is enough time for his company, the council and the Strickland administration to finalize a deal. 

However, Carlisle said the longer these discussions continue, the greater risk there is for the project.

He said the future cost of the project will increase and if the deal does fail, it increases the likelihood that any project involving a convention center hotel would likely involve an out-of-town developer.

If the deal does collapse, Carlisle said his desire and obligation to invest in another convention center hotel for Memphis would also go with it.

“If the Grand Hyatt gets shut down will I continue to invest in Memphis? Probably not, no,” he said regarding a large-scale hotel investment. 

On Friday, July 15, Mayor Strickland commented on the One Beale project in his weekly update newsletter.

“Hosting conventions and tourism is a large and growing industry in our city. With our newly renovated Renasant Convention Center and future dock expansion at Beale Street Landing that future will be even brighter,” he said.

In the newsletter, Strickland said One Beale has already received more incentives than any other development in the city’s history including the city administration recommending (and City Council approved) a 50% backstop on the project for a maximum of $3.5 million for 30 years.

Included in the newsletter was a separate email Strickland sent to City Council members discussing concerns about the project and differences in financing terms. The largest difference was Carlisle Corp asking for a 100% backstop and a $6.9 million annual cap. Strickland said for his consideration for any deal involving a higher percentage of backstop would need to have another meeting with bond rating agencies, the state comptroller and a review of the city’s debt capacity reduction.

“Currently, there is too much risk and too much uncertainty for city taxpayers to move forward at this time,” he said.

Are amenities still lacking or just too far away? 

“They would like to call it a convention center hotel, and we’re the same distance away,” Browne said in regards to One Beale and the Peabody Hotel’s proximity to the Renasant. “And the reality is we’re not.” 

The crux of Browne’s criticism is largely around a mile walking distance from where the Peabody Hotel and the three hotels at One Beale sit in comparison to the convention center, which is located on the border of the Pinch District and edge of Downtown. 

“A key component is how do we deal with that walkability street issue,” Dennis said.

The trolley system, while a nice addition for Downtown and the nostalgia adds a charm to Memphis, isn’t ideal for shuffling people from one place or another in a timely manner. 

Trolley Night makes strong return

Kane said the trolley system is part of the solution, but the system still needs to improve reliability and consistency issues. The system is a positive for Memphis, but it isn’t the sole solution. 

The other factor is the perception of Memphis and Downtown being unsafe. For Tabor, protecting an amenity such as Beale Street, which is one of the biggest tourism destinations in the state, needs to remain a priority. 

“We need to make sure Memphis (and) Shelby County is a safe place,” he said. 

While improved travel may not change poor perceptions immediately, it does help. Or improve selling points for hotels more than a few paces away from a draw such as the convention center. 

Carlisle also expects the Downtown Mobility Center to aid in improving foot traffic and overall travel throughout Downtown by creating more parking spaces and more reasons to visit and explore. Much like the Grand Hyatt, the impact of that might still be a few years away. 

“I have no concerns,” Carlisle said. “By 2024, 2025 we will have addressed how to move large groups around the city as a whole.” 

Bluff City Biz: 100 N. Main with Kevin Kane

Kane was candid about more supply being needed and, specifically, the need for a large select service hotel with upwards of 400 rooms.

“The biggest challenge we have is a big, full-service hotel that can attract its own business and move the market,” he said.