With fewer meetings and attendees to go around, convention and visitor bureaus — which sell their city's convention centers, which in turn fill downtown hotels with out-of-town attendees — are feeling the pinch. Because attendance at trade shows, the driver of visitors to convention centers, is at an industry low, it's no wonder mayors and local governments are looking for reasons — and possible scapegoats.
Convention centers traditionally operate at a loss in order to fill the local hotels, which fuel room taxes. But with a reduction in room taxes, convention bureaus are having a hard time finding marketing dollars when they need them most. And medical conventions and trade shows, up to now a lucrative market segment for convention centers, may begin to find higher rates at highly-sought-after centers or reduced services at some bureaus, although it's too soon to tell.
Boom Days Over?
Since last spring, the marketing efforts of convention bureaus in Boston, Los Angeles, Miami, and Hawaii have been called into question by city or municipal governments.
In June, the Greater Miami Convention and Visitors Bureau'swith Miami Beach for promoting tourism was extended for another two years, after a review. The convention and visitors bureau in Boston, a particular favorite with medical convention planners, was not so fortunate.
Late last spring, the city's mayor, Tom Menino, called for a review of the direct marketing agreement between the Massachusetts Convention Center Authority, which operates the city's new $800 million Boston Convention and Exhibition Center, in South Boston, scheduled to open in June 2004, and the Hynes Veterans Memorial Convention Center, in Boston's Back Bay. Bookings at the new BCEC have fallen short of expectations, with a report (commissioned by the CVB) citing one of the reasons to be a lack of hotel rooms near the center.
Starwood is scheduled to build a 1,200-room headquarters hotel adjacent to the new center, but plans are stalled because financing has not been secured. That hotel is one of eight in development for the convention center area, according to the GBCVB.
In mid June, the state called for the creation of a separate entity to sell the two centers (at a later date, the marketing of both centers was called into question and the possibility of selling the existing Hynes floated). The new “affiliate entity,” the Boston Convention Facilities Marketing & Sales Group, is made up of 12 salespeople, including about five staffers from the Bureau who sell the center as well as about five staffers from the center's sales staff, says MCCA spokesperson Andy Antrobus. In theory, medical planners could be better served because, according to Antrobus, they'll have a “one-stop shop.”
Up until then, both the CVB and the center staff were marketing the centers, and, according to Antrobus, the bureau was “serving two masters, since it has a broad mandate to market Boston as a destination. We want convention sales to be the sole focus.”
And there are other potential benefits for planners. The MCCA announced that it is willing to forego rent for select groups willing to commit their events to the new BCEC in its first six months (it's scheduled to open in June 2004).
Will Med Shows Book Beantown?
But whether the change in the center's marketing structure will help or hurt the city remains to be seen. Beth Torrey, vice president, Pri-Med Shows, Boston, says she is holding space at both the Hynes and the BCEC for fall of 2004 for Pri-Med East, a four-day regional show for primary care physicians, which attracts about 8,000 people, 3,000 of whom are drive-ins. “The reason we haven't committed yet to the BCEC in '04 is mainly because of the lack of adjacent hotel rooms and the development of the area. We may hold out until '05 because we want the first time out to be the best experience for everyone. There are no big shows booked in before us (November 2004), and it's tough to be the first one.”
Torrey adds, “We think the new BCEC would be the best experience for all, because it has larger meeting rooms, and we could sell more exhibit space. Boston has always been one of our strongest shows because of the local medical community and the fact that Harvard Medical School is our educational partner.”
James Youngblood, CEO, North American Society of Pacing and Electrophysiology, Natick, Mass., and immediate past president of the Professional Convention Management Association, heads one of the few medical associations that has committed business to the new BCEC, booking its annual scientific session for 2006, 2009, and 2012. He says, “Bureaus used to specialize in registration, but now there's huge competition for registration, particularly from technology companies. It's tough for them to figure out who they serve: the city or state? The client? The building? They get stuck in the middle a lot. And there's a lot of political pressure locally, which isn't new.” Youngblood adds that NASPE's conventions have always pulled very well when held in Boston.
We Feel Boston's Pain
Similar situations exist in Los Angeles and Hawaii. In Los Angeles, the convention center hasn't nearly the number of hotel rooms nearby that cities with comparably sized centers do. With only six conventions booked at the LA Convention Center this fiscal year, a city advisory committee suggested the marketing contract between the city and the Los Angeles Convention and Visitors Bureau, which expires in June 2003, be evaluated. In June, the city hired a consulting firm to conduct a performance audit on the bureau. Meanwhile, in May, the Los Angeles City Council voted to move forward on a redevelopment plan that would include a convention center headquarters hotel. And the city is considering a proposal to establish a nonprofit corporation to help pay for a 1,200-room hotel next to the center.
Bookings at the Hawaii Convention Center haven't met expectations either. Under recent legislation, the center must be marketed by one agency, not two, as is currently the case. As in Boston, officials hope one entity, concentrating on the center, will prove more successful.