Monday, October 15, 2012

Convention Center price war

There is a price war going on in the convention business. The Wall Street Journal reported Saturday:

"Across the country, cities are duking it out like never before over conventions, vying to host everyone from the Barbershop Harmony Society to the American Academy of Cosmetic Dentistry.

Convention-center officials in Boston say they were on track recently to snag a green-building trade show when they got muscled out by Atlanta.

Atlanta lured the group for its 2019 show by offering free rent at its Georgia World Congress Center, said James Rooney, executive director of the Massachusetts Convention Center Authority. He estimated comparable space in Boston would have rented for about $500,000. "At the last minute, they swooped in," Mr. Rooney said.

Georgia's capital city won because it "presented the best value proposition," said Mark Vaughan, chief sales officer for the Atlanta Convention & Visitors Bureau. He added that he was surprised by Mr. Rooney's comments but declined to comment about sweeteners offered to the group, U.S. Green Build, which also is mum on the details. The Georgia World Congress Center also declined to comment.

The nation's slow-growing economy has hurt attendance. With budgets tight, companies and associations aren't holding as many conventions or sending as many employees or members to them. And a glut of convention space has sharpened the competition among cities.

"If you get one of these events, you're talking about $20 to $30 million in spending in the local economy," Boston's Mr. Rooney says.

Between 2000 and 2011, convention-center exhibit-hall space expanded by 35% nationally while attendance fell 1.7% in the same time, said Heywood Sanders, a professor of public administration at the University of Texas at San Antonio, and an expert on convention centers. Attendance is down 5% since 2007.

Douglas L. Ducate, president and chief executive of the Dallas-based Center for Exhibition Industry Research, has been in the business since 1968. "It's more competitive today than at any time in my career," he says.....

City convention bureaus are undercutting each other with offers of freebies and incentives, such as free banners, breaks on rent and donations to a trade organization's charity. "It's been going on for years, but not at the magnitude that it is today," said Mr. Vaughan in Atlanta.

Some convention centers have added casinos or theaters. In Nevada, the Reno-Sparks Convention and & Visitors Authority is aiming to lure bowling conventions with its sprawling bowling alley only open to convention-goers. "We have the Taj Mahal of bowling," said Christopher Baum, the authority's president.

Mr. Ducate said conventions as a modern industry arose in the 1960s as highways and jet travel made multi-day gatherings economically feasible. The business model that evolved was to build large convention centers as loss leaders, paid for by local government bonds, which thenwere paid off primarily by hotel-occupancy taxes, Mr. Ducate said. The notion was that conventions would generate enough local business to eventually pay for themselves.

Deborah Sexton is president and CEO of the Chicago-based Professional Convention Management Association, an organization of about 6,300 meeting planners and convention and facility managers. "Many cities take this business for granted because it's been coming for years," she said. "It's only when you lose it that you realize its importance."

Business and leisure travel nationally has rebounded since the recession, but travel for conventions, trade shows and similar events, hasn't come back as strongly, said R. Mark Woodworth, president of a hotel market-research company and a member of the board of the Atlanta Convention & Visitors Bureau.

"In the past, where you might have two or three cities [bidding in] any given year, we're now up to four to six cities wanting to bid. It shows you the cities are hungry," said Dick Holmes, convention director for the American Legion. The group recently picked the Kentucky International Convention Center for its 2017 annual gathering after convention officials in Louisville offered free rent and free office space—and agreed to pay all costs for the organization's annual patriotic parade.

Louisville convention center officials declined to say what they gave the group, but Mr. Holmes estimates the perks add up to more than $300,000 in value. In return, he said, the city gets thousands of "guys and gals" who stay in hotels, dine out, take tours and "might have an adult beverage or two."

Mr. Sanders, the University of Texas professor, predicts the glut of convention space will only get worse, because a number of cities continue to push expansions. He blames cities' hired consultants, who he said predict "all these people are going to come and do wonderful things to your economy."...."

"But the problem is they aren't coming anymore, because there are lots of other convention centers ... that desperately want that business," he said. "So Atlanta steals from Boston, Orlando steals from Chicago and Las Vegas steals from everywhere."
Article

7 comments:

Clay Edwards said...

Great article, the convention business is just like the concert promoting business. You would be blown away at what sorta perks a city, venue, etc. will give a major promoter to bring a big festival to town.

Anonymous said...

So, they're giving away the store in 2019 and hoping they're still in existence by then?

Anonymous said...

The Jackson Convention Center is drowning in red ink and is the disaster many predicted it would be.

Kingfish said...

Don't worry. A hotel will fix it.

Anonymous said...

Well anyone who is considering scheduling a convention in Boston or Atlanta would certainly rather come to scenic Jackson, MS! I mean, why WOULDN'T they?!?

Jackson (ex) native said...

Anonymous 3:50. You obviously haven't been reading the C-l which has quit reporting crime and professes that everything is great. I'm sitting here mulling great entertainment possibilities. I'm sure I'll come up with something if you give me enough time. I'll get back to you after the Farish Street District opens. That is supposed to happen soon, right? New Orleans tour guides have been cashigg in on tours of the ruins of the 9th ward, perhaps we could have a tour of the ruins surrounding downtown. Or, a tour of Mrs. Stokes ward? Late night, of course with a visit to a "nightclub" to keep it real. JPD will provide security.

Anonymous said...

Interesting article, KF.
I attend bridge tournaments. I have attended bridge tournaments and other events at Mississippi convention venues and in other states. I participated in planning the regional held in June in Jackson.
Visitors from other states love Mississippi...the people, the food, the beautiful architecture, the music and art.
Attendees from other states represented our largest group of participants and they were extremely happy with our venue. I wish more Mississippians had attended. Those who did, were very pleasantly surprised and pleased.
And,yes, KF, the males from other states noticed how beautiful the women are down here!
The greatest expense in holding such an event in Mississippi is with the contracts convention venues have with food service providers. Coffee in Jackson was a bargain at $30 a gallon and it's $50 in Biloxi. Both are obscene prices given actual costs as far as I'm concerned. The food per person costs are too high as well. Spending $3000-$10000 to provide the expected free coffee to attendees becomes prohibitive. To contrast, our restaurant prices are very reasonable.
And, yes,a lack of proximity to hotels hurts Mississippi's Convention centers. The closest hotels to Biloxi's center are rather low end and old, but at least they have middle and higher end closer by at casinos and plenty of parking.
Event attendees prefer, however, to walk from the hotels to the event venue when it's held over several days. Our centers are more suited to 1 day events and I think that is hurting us.
And, accessibility is key. Jackson has the easiest travel access.
Without the convention centers in Biloxi and Jackson and Hattiesburg, the venues in the state are nearly non-existent if one needs over 8000 sq ft to meet fire code and needs food on site.8000 sq feet really isn't that large when you are planning events. I know it sounds big, but that is what is needed for 200 bridge tables. I was frankly surprised at square footage requirements not just for this event but in planning a daughter's wedding.

Our tournament was comparatively small in numbers of people but lasted over a week and a minimum estimate of revenue to Jackson for the week would be $700000.( Given how bridge players can party, I really think it topped a million!)

The Jackson Convention Bureau was outstanding and professional in helping us have a well received event.

Jackson restaurants were outstanding in meeting our needs and attendees loved the food.

I believe we can compete with other cities in the South if we take an approach of value for cost. We can't charge what a resort or larger city demands but I have come to believe there is an opportunity for a niche , which, as your posted article points out, is lucrative. Attendees to our event who plan the same event in other locations agreed that we have an opportunity when it comes to events.
By the way,when it comes to competitive contract bridge, Mississippi should be proud. The American Contract Bridge League's national headquarters recently moved to Horn Lake, MS. One of the top national US players with over 10000 master points, Annette McHann, is a Mississippian and the next President of ACBL is likely to be a Mississippian.
I wasn't lucky enough to be born in Mississippi, but I feel very lucky to make what I think is one of the most beautiful states in the Nation my home! If I can get a friend from some place else to come once, they come again! I worry those of you fortunate enough to be natives take all our fabulous assets for granted sometimes and focus too much on our challenges.
When people are looking for a bargain,for value for cost, we are it!
And, guys, let's not underestimate the attraction of our beautiful women! Motivates quite a few of you, doesn't it? ;-)

Susan Purdy



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Trollfest '07 was such a success that Jackson Jambalaya will once again host Trollfest '09. Catch this great event which will leave NE Jackson & Fondren in flames. Othor Cain and his band, The Black Power Structure headline the night while Sonjay Poontang returns for an encore performance. Former Frank Melton bodyguard Marcus Wright makes his premier appearance at Trollfest singing "I'm a Sweet Transvestite" from "The Rocky Horror Picture Show." Kamikaze will sing his new hit, “How I sold out to da Man.” Robbie Bell again performs: “Mamas, don't let your babies grow up to be Bells” and “Any friend of Ed Peters is a friend of mine”. After the show, Ms. Bell will autograph copies of her mug shot photos. In a salute to “Dancing with the Stars”, Ms. Bell and Hinds County District Attorney Robert Smith will dance the Wango Tango.

Wrestling returns, except this time it will be a Battle Royal with Othor Cain, Ben Allen, Kim Wade, Haley Fisackerly, Alan Lange, and “Big Cat” Donna Ladd all in the ring at the same time. The Battle Royal will be in a steel cage, no time limit, no referee, and the losers must leave town. Marshand Crisler will be the honorary referee (as it gives him a title without actually having to do anything).


Meet KIM Waaaaaade at the Entergy Tent. For five pesos, Kim will sell you a chance to win a deed to a crack house on Ridgeway Street stuffed in the Howard Industries pinata. Don't worry if the pinata is beaten to shreds, as Mr. Wade has Jose, Emmanuel, and Carlos, all illegal immigrants, available as replacements for the it. Upon leaving the Entergy tent, fig leaves will be available in case Entergy literally takes everything you have as part of its Trollfest ticket price adjustment charge.

Donna Ladd of The Jackson Free Press will give several classes on learning how to write. Smearing, writing without factchecking, and reporting only one side of a story will be covered. A donation to pay their taxes will be accepted and she will be signing copies of their former federal tax liens. Ms. Ladd will give a dramatic reading of her two award-winning essays (They received The Jackson Free Press "Best Of" awards.) "Why everything is always about me" and "Why I cover murders better than anyone else in Jackson".

In the spirit of helping those who are less fortunate, Trollfest '09 adopts a cause for which a portion of the proceeds and donations will be donated: Keeping Frank Melton in his home. The “Keep Frank Melton From Being Homeless” booth will sell chances for five dollars to pin the tail on the jackass. John Reeves has graciously volunteered to be the jackass for this honorable excursion into saving Frank's ass. What's an ass between two friends after all? If Mr. Reeves is unable to um, perform, Speaker Billy McCoy has also volunteered as when the word “jackass” was mentioned he immediately ran as fast as he could to sign up.


In order to help clean up the legal profession, Adam Kilgore of the Mississippi Bar will be giving away free, round-trip plane tickets to the North Pole where they keep their bar complaint forms (which are NOT available online). If you don't want to go to the North Pole, you can enjoy Brant Brantley's (of the Mississippi Commission on Judicial Performance) free guided tours of the quicksand field over by High Street where all complaints against judges disappear. If for some reason you are unable to control yourself, never fear; Judge Houston Patton will operate his jail where no lawyers are needed or allowed as you just sit there for minutes... hours.... months...years until he decides he is tired of you sitting in his jail. Do not think Judge Patton is a bad judge however as he plans to serve free Mad Dog 20/20 to all inmates.

Trollfest '09 is a pet-friendly event as well. Feel free to bring your dog with you and do not worry if your pet gets hungry, as employees of the Jackson Zoo will be on hand to provide some of their animals as food when it gets to be feeding time for your little loved one.

Relax at the Fox News Tent. Since there are only three blonde reporters in Jackson (being blonde is a requirement for working at Fox News), Megan and Kathryn from WAPT and Wendy from WLBT will be on loan to Fox. To gain admittance to the VIP section, bring either your Republican Party ID card or a Rebel Flag. Bringing both and a torn-up Obama yard sign will entitle you to free drinks served by Megan, Wendy, and Kathryn. Get your tickets now. Since this is an event for trolls, no ID is required. Just bring the hate. Bring the family, Trollfest '09 is for EVERYONE!!!

This is definitely a Beaver production.


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Jackson Jambalaya is the home of Trollfest '07. Catch this great event which promises to leave NE Jackson & Fondren in flames. Sonjay Poontang and his band headline the night with a special steel cage, no time limit "loser must leave town" bout between Alan Lange and "Big Cat"Donna Ladd following afterwards. Kamikaze will perform his new song F*** Bush, he's still a _____. Did I mention there was no referee? Dr. Heddy Matthias and Lori Gregory will face off in the undercard dueling with dangling participles and other um, devices. Robbie Bell will perform Her two latest songs: My Best Friends are in the Media and Mama's, Don't Let Your Babies Grow up to be George Bell. Sid Salter of The Clarion-Ledger will host "Pin the Tail on the Trial Lawyer", sponsored by State Farm.

There will be a hugging booth where in exchange for your young son, Frank Melton will give you a loooong hug. Trollfest will have a dunking booth where Muhammed the terrorist will curse you to Allah as you try to hit a target that will drop him into a vat of pig grease. However, in the true spirit of Separate But Equal, Don Imus and someone from NE Jackson will also sit in the dunking booth for an equal amount of time. Tom Head will give a reading for two hours on why he can't figure out who the hell he is. Cliff Cargill will give lessons with his .80 caliber desert eagle, using Frank Melton photos as targets. Tackleberry will be on hand for an autograph session. KIM Waaaaaade will be passing out free titles and deeds to crackhouses formerly owned by The Wood Street Players.

If you get tired come relax at the Fox News Tent. To gain admittance to the VIP section, bring either your Republican Party ID card or a Rebel Flag. Bringing both will entitle you to free drinks.Get your tickets now. Since this is an event for trolls, no ID is required, just bring the hate. Bring the family, Trollfest '07 is for EVERYONE!!!

This is definitely a Beaver production.

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