Nearly a thousand meetings were held in New Orleans last year — and those are just the ones tracked by the city's convention bureau. (An estimated 44 percent of the city's 9.5 million room nights annually are derived from group business, according to a research report issued shortly after Katrina by Wachovia Securities.) So when the Metropolitan New Orleans CVB was forced to cancel all conventions using the convention center or three or more hotels through March 31, 2006, an unprecedented number of groups were scrambling to figure out what to do: Cancel, relocate, rebook at a later date?
For associations booked in the Big Easy through March 31 — and even after that — these questions are particularly difficult, as so many associations depend on their conventions and shows for a significant percentage of their operating revenue. Making the wrong decision, or making the right decision too late, can have a devastating financial impact. We offer here a look at four associations that had to make a difficult decision as a result of Katrina.
NADRA: Hello, Memphis
“In this business, we're used to moving quickly and thinking on our feet,” says Terry Dempsey, general manager for DeckExpo, a trade show and convention put on by the North American Deck and Railing Association, Meridian, Idaho, which had been scheduled for February 15 to 17, 2006, in New Orleans. The 20-year veteran of the meetings industry admits, however, that he has never faced a scramble like this: relocating a 300-booth show with about 2,000 attendees in the span of five months. “But compared to the people who have lost their homes, families, businesses, and jobs,” he says, his problems are minor. “We'll make this work.”
Canceling was never an option. “I said from the get-go, I have five months to pull this together,” Dempsey says. “The show will go on.” He immediately contacted exhibitors and attendees through phone calls and the Internet to let them know that the show would be moved, even though the venue and dates were still up in the air.
Next, he got in touch with Dallas-based International Association for Exhibition Management, which had set up a service after Katrina to help meeting and trade show groups find alternate venues. Dempsey found the IAEM service to be an invaluable resource. “There is trepidation on the part of a lot of venues. They don't want to be perceived as poaching or taking advantage of New Orleans,” he says.
IAEM found several cities that met his requirements for the meeting. “My No. 1 priority, besides finding a quality place to have this, was to stay on or as close to my current dates as I could,” he says. The Memphis Convention Center fit the bill, having availability just one day off the group's original dates.
Dempsey and his staff were then faced with the daunting task of planning and promoting the meeting from scratch on short notice. Registration had not opened yet, so that wasn't a problem, nor was air passage, as the official carrier agreed to switch tickets to Memphis. However, some promotional materials and exhibitor prospectuses had already been printed. DeckExpo planners are in the process of printing new materials at an out-of-pocket cost of about $10,000 to $15,000, he says. The exhibit floor was about 62 percent sold when Katrina hit, and Dempsey has confirmation from all of the previously booked exhibitors except one that they will exhibit at the show in Memphis. The exact same floor plan will remain in place.
The biggest challenge will be promoting the Memphis show, he says. “Fewer people are familiar with Memphis compared to New Orleans. So we'll have to do extra promotional efforts.”
ASDSO: A Silver Lining
The Association of State Dam Safety Officials did not have a small window of time to relocate their annual meeting — it was more like a peephole. ASDSO's conference had been scheduled at the New Orleans Sheraton September 25 to 29-26 days after New Orleans' levees failed.
After some immediate calls to Starwood Hotels and Resorts, Sheraton's parent company, Susan Sorrell, conference coordinator at ASDSO, found availability around the same time period at other Starwood properties. She also received calls from hotels and CVBs across the country looking to help out with the group's space needs. “No one was aggressive, and no one bothered me after I told them we had narrowed it down to a few properties.”
Ultimately, the association decided to relocate its meeting to Starwood's Swan and Dolphin Hotel at Walt Disney World Resort in Orlando, Fla. The dates were just two days prior to the original time slot for the convention, but they fell over a weekend. Not ideal, but close enough considering the circumstances, Sorrell says. The fact that the group's original contact had been moved from the New Orleans property to the Swan and Dolphin after the hurricane and continued to work on the account was an added bonus, Sorrell explains.
When the storm hit, close to 500 people had already registered, and Sorrell was expecting about 700. As this magazine went to press, some 300 people had registered for the relocated conference, and Sorrell hoped to get that number closer to 500. Also, the airlines were being cooperative in switching tickets to Orlando and not assessing a change fee.
Cancellation insurance proved to be a safety net for the association. “It's only the second time in our history that we bought it,” Sorrell says. The insurance covers expected loss of revenue and expenses incurred in moving the conference. If the association doesn't get the attendance it expected in New Orleans, Sorrell is hopeful that the insurance will pick up the potential loss of revenue.
As for rebooking speakers and exhibitors, Sorrell was blitzing the phones at press time to make sure that they would attend. Conflicts are inevitable on such short notice, but she expects the educational component to remain mostly intact. In fact, there were some major additions to the program. As this is an association made up of dam experts, the flooding and the broken levees in New Orleans was topic A.
“We cleared our opening general session in order to invite some officials from the Army Corps of Engineers and other agencies to speak to the issues in New Orleans and the Gulf states,” she says.
At the meeting, the association will address the problems caused by the storm and talk about ways to make improvements in dam safety. Says Sorrell, “We might be able to make a difference.”
SGIA: Déjà vu
When Katrina hit just weeks before the Specialty Graphic Imaging Association was to hold its annual convention and trade show at the New Orleans convention center, it was a case of déjà vu for SGIA. Four years ago, the Fairfax, Va. — based group had to cancel its convention when terrorists attacked on September 11.
That event, which was to have opened three days later, on September 14, had been expected to attract more than 15,000 people from around the world. The association, which had not bought cancellation insurance, subsequently lost some $3 million, precipitating a financial setback from which it took the SGIA two years to recover, says Michael Robertson, SGIA's president and CEO.
Fast forward to September 2005. SGIA's annual convention, with expected attendance of 14,000 and 500 exhibitors, was slated for the Ernest N. Morial Convention Center, September 26 to October 1. As he watched conditions worsen hours after the hurricane hit, Robertson knew the event was in serious jeopardy. “The situation just deteriorated to something no one would have imagined,” he says.
SGIA leaders quickly considered relocating the show and found availability at the Georgia World Congress Center in Atlanta on the exact dates. But despite Atlanta's best efforts to accommodate them, SGIA decided it was too big a show to move in less than a month. “We decided we really couldn't put on the kind of event that we would want to put on, so we're better off not moving it,” Robertson says. So, just days after the hurricane hit, SGIA canceled its convention for the second time in five years. But this time they had cancellation insurance.
“While it doesn't put us in the position, financially, that we would have been in if we had had the show, it certainly is a lot better than we were in 2001,” Robertson observes. “We'll buy it in the future because it is really helping us out.” With cancellation insurance, the association is reimbursed for losses — including expenses and some anticipated revenues. “It'll probably be a wash, which under the circumstances is a lot better than going in the hole.”
But the lost opportunity opened new doors for SGIA, which announced plans to introduce a new show for the industry later this year. It will be a smaller show aimed at the area most affected by the cancellation of the show — the digital component of the specialty graphics industry. “They're the ones that are in most need of a marketplace right now, and while it would be much smaller than the annual event, we feel we can really craft a strong marketplace for that industry sector and give them what they need.” SGIA's Digital Expo will be held December 8 to 10, 2005, at the Phoenix Convention Center.
NCEA: On the Fence
The Metropolitan New Orleans CVB had canceled all citywide meetings using the convention center through March 31, 2006, as of our press date, but what about groups that are scheduled to meet in the city after that? Will the city be ready to host them? Will attendees feel safe going? These are two of the questions that associations are asking themselves.
“We haven't made a decision yet,” says Sue Arvo, convention and exposition director for the National Catholic Educational Association, based in Washington, D.C. NCEA is slated to bring its 11,000 delegates to the convention center April 18 to 21. Arvo believes it will be difficult to pull off.
“So much of our work is done by our local committee, whom we can't locate. A lot of them have lost their houses, have lost their schools,” explains Arvo. “We just don't think it's fair at this point to ask them to do the 100 things they normally would do when they have bigger issues to worry about at the moment.”
As of press time, Arvo said it looked like some of the hotels in the 11-hotel block were planning to hold them to their contracts.
“We are trying to see if we can switch our dates with another city and go back to New Orleans in a couple years,” she says. But they had not been able to pursue the availability of dates in future years with the New Orleans CVB as of press time. NCEA officials met in late September to discuss their options, with a decision expected soon thereafter. Since the city is expected to be open by then, Arvo is not sure if her group will be covered by force majeure contingencies.
“It's not about our meeting as much as it is about our people who were supposed to attend and work on it,” Sorrell explains. “They are all displaced.”
AFTERMATH
- Amount the Big Easy loses in visitor spending each month that the city is shut down: $500 million
- Amount of visitor spending attributed to meetings and conventions: 40%
- Rank of New Orleans among largest U.S. convention cities: No. 5
- Minimum number of meetings displaced from New Orleans between August 29, 2005, and October 31, 2005: 120
Houston: Shelter From the Storm — for Awhile
From San Diego to Kansas City and Atlanta, cities across the country have had an unexpected windfall: new convention bookings as a result of displaced New Orleans business. But no city has felt the ripple effect from Katrina more than Houston. As the closest major city to New Orleans, Houston welcomed some 150,000 Katrina evacuees, in addition to booking some displaced meetings business.
That was before Hurricane Rita began moving toward the Gulf Coast just a few short weeks after Katrina, threatening areas in Texas and Louisiana. With fears of a Katrina replay, the entire city of Houston was evacuated before Rita arrived, creating massive traffic jams. Evacuees living in the city's public buildings were once again evacuated, this time to Arkansas. Rita turned out not to be as destructive as feared, but the two-storm experience has been a tremendous ordeal for the city of Houston.
Prior to Rita, in addition to evacuees, the city was trying to handle its own scheduled meetings as well as some that have been displaced from New Orleans. Some September meetings at the George R. Brown Convention Center, which up until Rita had been used as a shelter for evacuees, were postponed or rescheduled. These include the Turbomachinery Symposium, rescheduled to December 12 to 15 at the convention center, and the U.S./Arab Economic Forum, originally slated to run September 14 to 16, but postponed with no new dates set yet.
“We're using the Astrodome, Reliant Expo Center, Reliant Arena, and parts of the George R. Brown Convention Center [to serve evacuees],” said Gerard “Jordy” Tollett, president and CEO of the Greater Houston CVB, with whom we spoke in early September, before Rita came to town. “It's paid off to build three big new facilities in the last five years,” he said. “We're using them to their fullest, maybe for the best thing you can possibly do for someone.”
The first meeting to return to the GRBCC after Katrina was supposed to be the Texas Association of School Boards/School Administrators on September 23 to 25. Because of Hurricane Rita, which hit Texas over that weekend, the association postponed its meeting and will reschedule late in the year.
Before Rita hit, Tollett said that dozens of groups were exploring moving their meetings from Gulf Coast areas affected by Katrina to Houston, including some with meetings in New Orleans as far out as 36 months.
“The meetings world will be accommodated,” Tollett said, adding that U.S. facilities have the capacity to handle displaced meetings. “Everybody understands that groups are in dire need of a place to hold their meeting. And the people who have been evacuated are in dire need of a job and a place to live and a brighter future, so it's been rewarding trying to accommodate everyone.”
