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Houston Considering Privatization of Convention Center and Marketing Activities

Leonard Gilroy
March 2, 2009, 6:58pm

According to the Houston Chronicle, officials in Houston are considering the possibility of consolidating and privatizing the city's marketing functions:

A committee set up by Mayor Bill White is strongly considering a move that would partially privatize the Greater Houston Convention and Visitors Bureau, as well as a city department with a $60 million budget.

Although the details have yet to be worked out, the possibility being weighed by the Mayor’s Committee on Marketing Efficiency effectively would combine the operations of several groups tasked with marketing the city and would move them into a local government corporation, a nonprofit agency supported by public funds. [...]

Ric Campo, an apartment developer who chairs the committee, said combining some operations of the Hilton Americas Hotel, the visitors bureau’s convention operation, and the city’s Convention and Entertainment Facilities Department, makes good business sense.

Combining the three could eliminate redundant sales efforts, leading to $1.5 million to $3 million in annual savings, committee members said. It also would lead to a more agile marketing effort, Campo said, allowing the city to quickly create packages that include hotel, convention and event tickets.

This seems very consistent with how Houston spun off its economic development functions several years ago into the Greater Houston Partnership.

One official interviewed in this article suggested that running a zoo was not a core government function, but that marketing the city is. I'm sure that many would suggest the same thing about economic development, but the GHP example would seem to indicate otherwise. And the "Yellow Pages test" proves a handy analytic tool here. A simple search on YellowPages.com shows that there are 534 businesses providing marketing services in the Houston metro area, with many more nationally. So by definition, it isn't inherently governmental and is thus a natural opportunity to apply competition or privatization.

Not to mention that governments aren't very good at running businesses, and right now Houston is effectively in the business of running a convention center and hotel. In times where governments need to exploit every smart opportunity to do more with less, the first thing they should do is spin off non-core commercial enterprises like convention centers & hotels, toll roads, parking facilities, and more, as Mayor Daley's been doing in Chicago.

» Reason's Privatization Research and Commentary


Leonard Gilroy is Director of Government Reform


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