The New A Word
Attrition has reigned as the most contentious issue for our industry over the past five years. But I believe that a new “a” word has come to predominate: accountability. For that we can thank corporate scandals that have led to accounting reforms and, some would say, a more ethically minded corporate environment. But corporate scandals aren't the only thing driving the accountability wave. Budget deficits are, too.
In a February 2003 article called “Budget Blues: How Record State Deficits Affect Your Meetings,” we analyzed likely outcomes of huge state deficits — collectively the largest since World War II. Pressure to raise sales and room taxes, more scrutiny and control of CVB expenditures, and the diversification of CVB funding were some of the trends we (correctly) identified two years ago.
Budget deficits remain an ongoing concern for all levels of government as they grapple with spending priorities. And state and local governments are increasingly looking for proof of return on investment when it comes to outlays of tax dollars for convention centers.
Cities' capital spending on centers has doubled in the past decade to $2 billion annually, says Heywood Sanders, author of the controversial Brookings Institution report on convention centers and the subject of our cover story this month (page 16). As Sanders points out, return on investment is increasingly difficult in today's over-supplied convention center market. With 44 new projects in the pipeline, and convention center attendance still below pre-9/11 levels, many centers are struggling to meet operating expenses. The big question is whether convention and trade show attendance is likely to grow significantly or whether it has reached a plateau. I don't know the answer, but I do know there are many hurdles: from the high cost of exhibiting to ongoing travel hassles and a relentless sense of time poverty that may turn out to be the biggest challenge of all.
What is clear for now, and maybe for a long time to come, is that associations are enjoying the fruits of a buyer's market in convention space (page 19). But caveat emptor: Meeting planners and their associations face issues of accountability, too. What are the ethical issues involved in playing one destination off the other in convention bidding? Can the price be right for the association but the venue/destination wrong for the members?
A story for another day.
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