A cross the country states are facing their worst budget deficits since World War II, and the resulting scenarios for convention business and the hospitality industry are not pretty. Exhibit A: Dave Whitney's recent resignation from the Dallas CVB following a probe into questionable expenditures at the bureau. (See page 43.)
Meanwhile, the exhibition industry, after decades of fabulous growth, is experiencing business declines that may not disappear when the economy picks up. (Cover story, page 18.) As Doug Ducate, who heads the Center for Exhibition Industry Research, says in his December '02 Situation Analysis, “The exhibition industry will face more competition for marketing dollars in the next five years than it has in the last 25.” He adds that the public spotlight will continue to focus on CVB performance and behavior, in part because few people in the public understand the mission of bureaus.
So what do we do? As one politician in Boston recently said, there's nothing like a fiscal crisis to kick-start reform. Or as the current buzz has it: It's time to change our “business models.”
Our cover story points to a couple of great places to start within the trade show realm: practices like cost-shifting, exclusive contracts, and ridiculously confusing and consequently cost-inflating labor jurisdictions at some convention centers. I sat next to one distraught exhibits manager for a major medical association at last month's PCMA meeting in Anaheim. She waved a bill for utility charges at a major convention venue that was $100,000 over what she had carefully budgeted. “How do I explain this to my boss? This kind of stuff makes me want to lock our show into two or three cities where we can better predict our costs.” Uh-oh.
Regarding public scrutiny of CVB expenditures, what the industry has failed to do is show how visitor expenditures make a real difference to people living in cities. When library doors are closing and public education is eroding, it's tough to ask for a tax subsidy to build a convention center — or tougher yet — a privately owned convention hotel. It's tough to swallow a city bill for a $250,000 convention reception. If public education is what's needed, let's get started. If education isn't the problem, what is?
Is there a silver lining to the red ink? I hope so.