A funny thing has happened on the way to today's hotel seller's market. Associations that previously never even considered second-tier cities are booking them. Those that tried them a decade or so ago are trying them again.
"We started thinking about second-tier cities again because in today's environment, we were finding first-tier cities considerably less interested in citywide conventions than in the past," says James H. Sweeney, associate executive director of the Chicago-based American Dental Association.
The ADA is anticipating attendance somewhere between 40,000 and 65,000, Sweeney says, but "The hotel environment in large cities is making it very difficult for associations to meet their members' expectations in terms of price, flexibility, and availability."
Not only are prices a comparative bargain in smaller cities, but the venues are first-rate. Second-tier cities are building convention centers geared to the large associations that were previously the domain of the first-tier cities, as with the expanded America's Center in St. Louis. They are hubs for major airlines, as Cincinnati is for Delta and Cleveland is for Continental.
They also have some of the finest hotels anywhere--two of metro Detroit's hotels made Conde Nast Traveler's 1997 list of the best places to stay in the world. And they have exciting entertainment. Riverboat gambling is growing exponentially, increasing attendee options for fun and relaxation. And, while premier destinations sometimes treat association planners as second-class citizens, second-tier cities provide first-class service.
All of which is not to say smaller cities don't still have a downside, most notably in the area of perception, which can affect their ability to draw attendees. Still, if you haven't taken a look at second-tier cities in a while, it might be time. Here are the experiences of three associations that recently turned to smaller cities as their first choice in meeting destinations.
Making Dentists Smile When the American Dental Association meets in Kansas City, Mo., in the year 2001, it will have been exactly 20 years since the association's last meeting in a second-tier city, which also happened to be Kansas City, in 1981. Although Sweeney says the overall membership appears to be enthusiastic about Kansas City as an upcoming site, the road to choosing a second-tier city wasn't always smooth.
"A couple of members of the board did express concern about Kansas City as a destination," says Sweeney. However, he notes that Kansas City offers not only a revitalized downtown and gaming, but several possibilities for off-site events. "It's too early in the game to say for sure where we'll have off-site functions," says Sweeney, "but Kansas City has Union Station and other unusual sites that we'll use, plus the gambling boats and country clubs just like every other city. There's no lack of places that will work."
Recognizing that members may have some of the same concerns as the board, Sweeney is well aware that he'll have to market and promote this meeting differently. On the plus side, though, Sweeney points out that not all members are interested in so-called "destinations."
"Some people prefer an easier environment," he says, "and a lot of the larger metro areas are simply not 'easy.'" He also notes that with a membership base of 160,000, the association always draws a different group of attendees, depending on where the meeting is based. "We try to meet the expectations of as many different people as possible," says Sweeney.
Certain issues might take more careful planning in Kansas City than in larger cities, Sweeney anticipates. "Ground transportation is going to be a challenge," he says, "because so many people will come in and out of the area in a short period of time. On the other hand, we were recently in a first-tier city where our members had to wait an hour and a half for cabs from the airport into the city."
In terms of hotels, the association is used to being spread throughout a city, but Sweeney thinks that they also will have to house some attendees outside of Kansas City. "But our members will do that," he says, "so it shouldn't be a problem. Plus there are significant pricing differences between Kansas City and first-tier cities, so that will work to our benefit."
The response of the hospitality community in Kansas City more than balances out the negatives, Sweeney says. "In the first-tier cities, we hear a lot about what the hotels and community won't do," he says, "but here we keep hearing about what they can do for us."
The next question the association faces is where to go in the years 2004 through 2007. "We haven't made any policy-change decisions," says Sweeney. "For those years, we're looking at both first-tier and second-tier cities. The reality is that we'll probably end up adding second-tier cities to our rotation without stepping away completely from first-tier cities."
Meanwhile, looking forward to Kansas City, Sweeney says, "It should be nice to see [attendees] smiling."
A Banner Welcome When the Washington, D.C.-based Association for Educational Communications and Technology decided to stop doing its convention andjointly with another association in 1994, it made a conscious decision to seek out second-tier cities for the convention/trade show. "At that point, we realized that things were going to be more expensive to produce on our own," says Stan Zenor, the association's executive director, "and we decided we had to find cities that we could better afford. So we started looking at second-tier cities."
Zenor says everyone was in agreement about the decision, from the members, who are educators, to the board of directors. "They're very lucky if they get any financial support at all to attend, so [meeting expenses] come out of their own pockets and price is a big factor," he says.
The exhibitors, too, favored the move, banking on lower costs across the board for food, hotels, and transportation. And the association can pass its savings on to the exhibitors by lowering booth space costs. Another factor for the exhibitors was the perception that there will be fewer labor issues in a second-tier city, although Zenor clarifies that the perception is not always reality, and that labor problems vary from city to city.
When the association staff started looking into second-tier cities, they were pleasantly surprised. "There really wasn't much difference at all in terms of support from the convention and visitors bureau, or from the standpoint of expertise and experience among the convention center staff," says Zenor. "And of course, we looked at only convention centers that could accommodate us, so size wasn't an issue." The association found the right facilities at the right price in Nashville, then moved on to Anaheim, Indianapolis, St. Louis, and this year, Albuquerque.
Lower hotel rates have been a big benefit for the approximately 3,000 members who usually attend the convention, Zenor says. "In a New York or Chicago or San Francisco," he says, "you have to go an awfully long way to find a $60 hotel, but in some of these smaller cities, you just walk across the street to a $29.99 hotel."
The downside is that attendees end up in hotels miles apart, which has led to some transportation obstacles. "That's the one area where we really found some distinguishable differences," says Zenor. "Ground transportation can be a problem in cities that don't have the number of DMCs or charter bus companies that you find in a larger city." But Zenor agrees with Sweeney that there is a plus side to the transportation--traffic in most smaller cities tends to move more efficiently, so it might take the same amount of time to move people five miles in a second-tier city as two miles in a first-tier city.
Zenor also notes that flying into a second-tier city "almost without exception means that you have to go someplace else first to get there. With a February convention, we almost always get a decent air rate, but perhaps the discounts into second-tier cities are not as great then as into the larger cities."
Although Zenor believes that many second-tier cities offer restaurants, special events, and nightlife opportunities that rival those in major cities, there's still a perception problem with most of the smaller cities. For example, he says Indianapolis is a wonderful city where the people do a great job hosting a meeting. "But Indianapolis has no reputation," he says. "It's not that it's a bad reputation, it just doesn't exist."
To combat the perception problem, Zenor says he has made an effort to feature the host city and its attractions more prominently in the convention registration brochure than ever before. "It makes the marketing and public relations more difficult," he says. But there are creative ways to lure attendees. "For the Albuquerque meeting, we had a link on our homepage to Albuquerque's page," Zenor says, "and people who bounced from our site to theirs got coupons and other special deals."
Smaller cities also tend to put out a big welcome effort. In Indianapolis, for example, welcome signs were posted on billboards along the interstate into the city, and centerpieces that welcomed the attendees adorned tables in the bars and restaurants. St. Louis put banners on the light poles downtown. "Those things make the community more aware that we're there, and the attendees feel more welcome," he says.
Despite all the good experiences, Zenor says the association is considering making a move back to first-tier cities. "From the comments we've received and a slight decline in attendance, this is something we have to research more," he says. "We're going to do some surveys this spring to determine what our members really want." Zenor believes part of the problem might be the convention's February dates. "We've had some indications that people want a good deal, but if [the money] is coming out of their own pockets, they might be willing to spend an extra $200 to be in a warmer first-tier city rather than a cold second-tier city--which describes most of the ones that can accommodate a group our size.
"A second-tier city is not necessarily the best solution," he concludes, "but there are times when you owe it to the members and to the organization to look at them--they do work hard. There are some really great people and cities out there."
Closing the Gap Flat out, Gary LaBranche, vice president for education and convention services of the American Society of Association Executives in Washington, D.C., says: "We don't have a philosophy or plan that we will go to large cities or to small cities. We simply choose cities that are appropriate, given our membership audience, the size of the meeting, interest, and so on. We go to different cities because there are differences. But I've never really thought of those differences as necessarily breaking down into second-tier versus first-tier."
Minneapolis, the last second-tier city to host ASAE's annual meeting, in 1993, "has a great convention center that can rival any first-tier city," LaBranche says. Nine years later, ASAE is again booked for a second-tier city, Denver in 2002.
"Convention planners are having to look at other places that they might not have gone to before, and many are surprised when they see what good packages these second-tier cities have," LaBranche says. "Denver might not have been on the radar screen a few years ago, but it has a tremendous convention and hotel package, and is conveniently located." He adds that he is seeing a big interest in Denver from members.
The differences between first- and second-tier cities are shifting, he says. "Because of expansions and infrastructure development, many second-tier cities can now accommodate larger groups and are more competitive from a convention standpoint," LaBranche says.
In fact, smaller cities have become so attractive, first-tier cities are in reaction mode. LaBranche points out that Chicago, for example, is now focusing more on marketing to small and mid-sized conventions. "That might seem unusual when you think of Chicago as a place for mega-conventions, but they're responding to the value and importance of small and mid-sized conventions, and increased competition from second-tier cities." *