First-tier vs. Second-tier: No Easy Choices

By Gary Tufel -- Tradeshow Week, 9/6/2004

By their own admission, smaller cities are not seeking mega-shows. In fact, with the trend toward more regionalized, niche-oriented tradeshows, CVB officials in many smaller cities believe they are entering a golden age.

However, there's a "but." Given the competitive atmosphere, first-tier cities are doing everything they can to attract small and mid-sized shows as well. Recent expansions in places like Chicago, Orlando and New Orleans were done not just to attract bigger shows, but to accommodate more than one moderate-sized show at a time.

All the cities mentioned here have venues that can accommodate a hypothetical 100,000-net square foot tradeshow.

But, as any tradeshow manager knows, that's just the beginning.

Two Florida cities, Fort Lauderdale and Orlando, are competing for different slices of the tradeshow market. And although they're in the same state, have similar costs and share sunny weather and a warm climate, that's pretty much where the comparisons stop, at least when it comes to tradeshows.

You can drive from one city to the other in about four and a half hours, but the tradeshows you'll find in each city couldn't be more different. The reason? The great disparity in available exhibit and hotel space between the two cities dictates what kinds of shows each can book.

Beachside Fort Lauderdale, whose Greater Fort Lauderdale/Broward County Convention Center offers 250,486 square feet of exhibit space, attracts primarily consumer and tradeshows that draw statewide audiences.

Meanwhile, inland Orlando's Orange County Convention Center offers more than 2 million square feet of exhibit space, with several hundred thousand square feet of additional exhibit space at smaller venues. That, along with its stellar entertainment attractions and capacious hotel space, allows Orlando to attract a variety of shows, ranging from some of the nation's largest to several smaller exhibitions all at the same time.

However, with the Fort Lauderdale facility's recent expansion and the construction of several hotels with meeting space, the destination is now positioned to attract events of all types and sizes, said Dennis Edwards, senior vice president for sales and marketing at the Greater Fort Lauderdale Convention & Visitors Bureau. Edwards insists that there's little reason why Greater Fort Lauderdale can't compete head-to-head with Orlando.

Costs are comparable. In Fort Lauderdale, the average hotel room goes for $89.21; Orlando hotel rooms average $90.40 per night. The space rate at the Greater Fort Lauderdale/Broward County Convention Center is 50 cents per square foot, while at the Orange County Convention Center, you'll pay 66 cents per square foot. Tradeshow Week found one service contractor's drayage rates to be $50 to $55 per hundredweight. In Orlando, the regular hourly rate for drayage is $51.83.

Obviously, only Orlando can handle the largest shows. It ranks No. 3 in the Tradeshow Week 200 for number of TSW 200 shows (17), market share (8.5 percent) and net square footage (5.2 million).

But Fort Lauderdale CVB officials are quick to remind anybody of the one benefit it will always have over Orlando: 23-plus miles of beaches.

Long known as the preferred location for some of the nation's largest tradeshows, Chicago's McCormick Place is firing a shot across the bow of second- and third-tier cities in an effort to corral more of the nation's smaller shows.

Can it compete for this business? With Navy Pier, Lakeside Center and the expansion of McCormick Place currently underway, it can, said Deborah Sexton, president of the Chicago Convention & Tourism Bureau.

Although its hotels and space rates are higher than a regional second-tier city like Columbus, Ohio, Chicago offers much to attract shows of all sizes. And its drayage rates are competitive.

Chicago's prime attraction is its location at the virtual crossroads of America, said Sexton. However, at 280 miles to the southeast, Columbus is pretty close to the center of the nation too.

That's one reason why ConvExx recently decided it would launch ScrapbookBIZ in Columbus, April 12–14. David Audrain, ConvExx executive vice president and COO, cited Columbus's proximity to the show's core marketplace. Its location "smack in the middle of the Midwest, and near the East Coast" made it the right choice, he said.

Jennifer Davis, the Greater Columbus Convention Center's marketing and communications manager, said show managers appreciate the Ohio city's cost-effectiveness and convenient location. Some clients also prefer the Columbus venue because it lets groups appear to have a bigger presence than in larger facilities where several events are held at the same time.

TSW's Annual Survey of Labor Rates lists drayage in Chicago at $59.45 per hour; in Columbus, it's $62.71. Space at McCormick Place ranges from $1.05 to $1.70 per square foot; at Navy Pier, it's $1.05. In Columbus, the average is 70 cents per net sq. ft., according to Davis.

Hotel rooms are a trade-off. They may be more plentiful in Chicago, but they cost substantially more, too. Chicago has 30,000 hotel rooms, while Columbus offers 21,399. Central business district hotels in Chicago charge an average of $148.72, according to Meghan Risch, public relations director for the CCTB. In Columbus, the average daily hotel rate is $99.85 downtown.

And then there's that Chicago tradeshow reputation. Said Sexton, "Chicago is known as a city that is serious about business, and one that increases attendance for shows."

What in the world does Fresno, Calif., have in common with Orlando, Chicago, New York or New Orleans? Not much, except a desire to compete with Las Vegas.

Just like the CVB officials in those larger tradeshow destinations, those at the Fresno Convention & Visitors Bureau insist they don't even try to compete, that comparing one to the other is a real apples-and-oranges kind of thing — but Las Vegas is always on their minds.

Believe it or not, the actual cost of putting on a show in the two cities separated by 260 miles is not all that different.

Fresno hotel rates average about $90 per night, depending on the season. There are about 7,500 hotel rooms citywide, with about 500 near the convention center. Marina Nicola of the Las Vegas Convention & Visitors Authority said visitors to her city pay an average of $92.07 per night for a hotel room.

Space at the Fresno Convention & Entertainment Center goes for an average of 25 cents per square foot per day, according to TSW's Major Exhibit Hall Directory. Space at the Las Vegas Convention Center is also 25 cents per square foot, and 30 cents at the Mandalay Bay Resort and Casino.

Drayage rates for the Fresno convention center were unavailable, but exhibitors are permitted to do their own drayage, said Misty Powell, SMG sales manager for the facility; some purchase it independently from contractors. According to TSW's Annual Labor Rate Survey, the average cost of drayage in Las Vegas is $64.42 per hour.

So what's the difference? Only the obvious.

"Fresno has a great facility, but Las Vegas has so much," said Pam Bradshaw, director of convention sales for the Fresno CVB.

Who, then, is Fresno's competition? According to Bradshaw, other California cities like San Jose, Ontario, Santa Clara and Sacramento.

The Fresno Convention & Entertainment Center offers two exhibit halls: the Valdez, with 32,500 sq. ft. of exhibit space, and Exhibit Hall North, with 66,371 sq. ft. Meanwhile, Las Vegas has 9 million square feet of meeting and exhibit space and some 130,000 hotel rooms.