“SMG now manages 135 facilities — including 35 convention centers — and is building a sales organization to scale.”
SMG, the fast-growing facilities management firm out of Philadelphia, is as much about sales and marketing these days as it is about management. Since January 2000, the company has increased its portfolio of convention centers 25 percent and, in response, is developing a national sales office support structure not unlike those of the major hotel chains. (Perhaps this is no surprise, since Hyatt has a 50 percent stake in the company.) We sat down with Gregg Caren, executive director of operations, in July at the ComputerAssociation Annual Summit, where the company, for the first time, sent representatives from nine of the 35 centers it manages, including the Denver Convention Complex, Moscone Convention Center, and Hawaii Convention Center.
Technology Meetings: SMG seems to be in the spotlight now more than ever.
Gregg Caren: It's a couple of things. For a very long time we were kind of like the Oz behind the curtain. We've been managing public facilities for about 25 years, yet the buildings always maintain their own identity. The last 18 months have been interesting. As of January 2000, we ran 65 total facilities [convention centers, arenas, stadiums, theaters]. Today we've more than doubled the size of the company. We now manage 135 facilities; 35 of those are convention centers [up from 28 in January 2000].
Two main things have happened in the past 18 months. We acquired two competitors [Leisure Management International and Ogden Entertainment], and because of this growth, we have grown our corporate support structure in Philadelphia.
TM: What does this mean to event planners?
GC: The private shows, and especially this audience — the Microsofts and the Oracles and the SAPs that are doing 20 to 700 events per year — need to move quickly. They need short-term lead response time, so what I've set up is the ability for a client to shop 35 convention centers with one phone call or one e-mail. I can put it out electronically, get the availability of dates back, and try to help find consistencies of service and the ways wewith them.
TM: In essence, a national sales office?
GC: Yes and no. When a client wants to leverage [a multi-city buy] from a negotiating standpoint, I have to remind them that we are a private company, but we work in each market for a publicly owned facility. The city of San Francisco owns the Moscone Center, the state of New Jersey owns the Atlantic City Convention Center, and so on. We can't just cut a deal. We can, however, do a lot of value-added things. We'll help you make the move quicker; we'll share our event resumes, BEOs, all the things that get an event off the ground more quickly and smoothly. At Microsoft's Global Summit in Miami this week [in July at the Miami Beach Convention Center], we've got eight senior managers from other [SMG] venues helping host this event. For a client that big and an event that big, we're actually mirroring the service contractors, a GES or a Freeman, by making our people portable.
[In a followup conversation, SMG Senior Vice President of Operations Thom Connors added that, like hotel chain national sales offices, SMG is working toward standardized templates forwith major clients. “That is a goal for this year. We're now in the process of working on this with three clients.”]
TM: What's next for SMG?
GC: The growth very clearly for us is in the smaller markets, those working to boost their convention base along with their tourism base, places such as Knoxville, Mobile, Savannah. Ten years ago you wouldn't have thought about a convention center in some of these markets, but they've become much more attractive as costs rise. You can find a lower hotel rate, a lower cost of doing business, as long as there's some reasonable air service and transportation mechanism.
Adding to that, we're seeing more vertical shows in more in-depth marketplaces. It used to be just the mega shows in the mega markets; now everybody is looking at vertical shows. They're getting into second- and third-tier cities.
TM: What new markets are you looking at?
GC: We are primarily concentrating on markets that have a new venue or expanded venue on their radar screen, especially the Midwest and some of the smaller markets.
If there's no facility to serve a market, maybe we can invest in a facility. That's one direction we've just started to explore. San Francisco is a good example. Moscone is very difficult to get dates in. If we could get a building in the Bay area for the right cost of entry to the marketplace — without interfering with our obligations to Moscone — I think that's a market that could use the extra space quickly.
TM: What are the biggest technology challenges for the convention centers you manage?
GC: Today it's about the fiber. And it's about trying to get a grasp on what the wireless need is going to be. At the end of the day, the toughest technology challenge for a convention center is planning ahead. The time between design and construction is just unbelievable. As we consult from our design division, we literally just tell people to plan for their conduit. We're going to run something through it, but what we're going to run may not even be designed yet.
TM: What other tech demands are you hearing?
CG: Twelve months ago we had videoconferencing facilities in two or three facilities; now we're up to 15 and adding a few more. If people are looking for alternative ways of getting people together without high travel costs, we see videoconferencing as a supplement to what big trade shows do.
[Connors adds that convention center clients are looking for more technical knowledge at the management and executive levels. “This was a theme of our recent corporate conference. This management-level education is an important goal for us this year.”]
SMG and the Society of Independent Show Organizers (www.siso.org) have launched an affinity program giving SISO members special consideration when booking any of the facilities under SMG management.
SMG's Thom Connors, senior vice president of operations, calls it a “most favored nation” status for SISO members, who will now have access to demographic surveys and other data for many SMG markets, reduced or eliminated advertising commissions for signage in public areas, and a “variety of other incentives.” Each facility is developing its own SISO benefits. In return, SISO will give SMG facilities special consideration when choosing a site for its annual meeting, promote the program to members, and provide testimonials for SMG promotions.