Are breakout spaces really the key to Harrogate Convention Centre's future?

After much deliberation and the input of some expensive consultants, North Yorkshire Council finally announced plans this week to invest £7 million in improvements to Harrogate Convention Centre.

The money would be used to create conference breakout facilities for about 1,300 delegates, which the council reckons should generate an extra £1.5 million of income each year.

The cash injection, which was outlined in a report to be discussed at a meeting of North Yorkshire Council’s executive on Tuesday (December 17), has been universally welcomed, but it marks a significant contraction of ambition. 

After all, previous plans for an overhaul of facilities were costed at £57 million, before they were eventually rejected in March this year – and that was just for phase one.

So how has a facility that was meant to be the locomotive powering the town’s economy come to this point – relying on breakout facilities to save the day?

Built in 1982

The convention centre, originally known as the Harrogate Conference Centre, was built in 1982 with the purpose of filling the vacuum created by the demise of the spa industry.

It was an obvious choice, since Harrogate had been hosting conferences and trade fairs as far back as the 1880s, and they had become ever more popular since the Second World War.

The strategy worked for a while. The centre provided a huge boost to the town’s hospitality and retail industries, and by 2007 was contributing as much as £60 million a year to Harrogate’s economy.

But the beneficiaries of that revenue were the hotels, restaurants, bars and shops, rather than the council, which owns the property.

Simon Kent, who was director of HCC from 2013 to 2019, told the Stray Ferret back in April:

Age and competition

As time passed, the very fabric of the place deteriorated. In publicity material published when it opened, contractor Laing said that it was “an example of the best of British construction technology", which used “advanced materials and techniques”. But that was 42 years ago, and parts of it have been looking past their best for some time.

In 2018, market changes and increased competition from Manchester, Liverpool, Newcastle, Birmingham, Brighton, Bournemouth, Edinburgh and a slew of other smaller rivals made the issue more pressing, so Harrogate Borough Council hired Leeds-based property adviser Cushman & Wakefield to develop a masterplan for the site.

Project manager Ben Pretty said at the time the firm was “excited to be advising on this potentially transformational scheme for the city region”, and said the centre was “likely to also have strong market appeal from other occupiers”.

But that was before the covid pandemic, which put the convention and hospitality industries into a deep freeze they have yet to fully recover from.

Rising costs

To make shrinking demand worse, overheads grew. In 2023-24, operating costs were more than 60% higher than they were in the last pre-covid year of 2019-20, according to North Yorkshire Council figures. This is in large part due to the rocketing cost of utilities – heating and power – but the wage bill alone has also risen by 40% over those five years.

As a result, HCC runs at a loss and has been limping along thanks to a £2 million annual crutch provided by council taxpayers.

These fundamentals – the stiff competition, rising costs and the changing nature of the events market – lay behind North Yorkshire Council’s decision to abandon the £57 million plan for the centre’s overhaul. Seeking answers, the council added to its consultancy bill – which already approached £2 million – by hiring London agency 31ten to come up with a solution.

The options

In its report, which the council has so far declined to publish in full, 31ten identified five possible courses of action, with only three of them now deemed viable. One of these was a £30 million upgrade to the centre’s conference facilities, while either selling the exhibition halls or entering into a joint venture.

But that was ruled out because, the council report said, “there was limited interest in Harrogate Convention Centre from private developers”, “due to site constraints and the requirement to preserve the economic benefits”.

Another option was the sale or lease of the convention centre, but no buyers have been found yet. One global conference operator has shown an interest, so council officers are recommending that the council remains “receptive to potential market opportunities”, including offers to buy it.

That leaves just one option: the commercial investment approach, which entails the breakout spaces in studio two. But that too has its limitations. The projected revenues from such a development are not even forecast to negate the need for an annual subsidy – it would just reduce it to around £1 million.

The council report concedes:

This option, which is backed by HCC director Paula Lorimer, looks likely to be given the ‘thumbs up’ at Tuesday’s council meeting, but how long it will keep the wolf from the door is anyone’s guess.

But as Simon Kent told us back in April:

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