Privately Speaking

For SMG's convention facilities team, 2005 was a pretty good year. The Philadelphia-based sports and convention venue manager marked the opening of the $415 million Puerto Rico Convention Center, teamed up with E.J. Krause & Associates in Mexico signed up the Intl. Exhibition & Convention Center in Mexico City's World Trade Center, and began working with Harrah's Entertainment and Keppel Land on plans for a Singapore casino and convention center project.

The international expansion has left Gregg Caren, vice president of operations and business development, racking up even more frequent-flyer miles than most in this globe-trotting industry.

And in addition to the burst of activity outside the continental United States, SMG, a nearly 30-year-old joint venture of Hyatt Hotels and Aramark, weathered a vicious hurricane season that damaged some of the facilities it manages (including its oldest client, the Louisiana Superdome) and forced others to convert quickly into shelters for storm survivors.The largest shelter operation was at the SMG-managed Reliant Park, whose Reliant Astrodome and Reliant Center in Houston accommodated more than 27,000 people — mostly from New Orleans' Ernest N. Morial Convention Center and damaged Superdome.

Caren took a moment recently to talk to Tradeshow Week Associate Editor Margo McCall about SMG's progress.

Question: With all of SMG's global expansion activities, will 2006 be filled with travel?

Answer: If the end of '05 is any indicator, absolutely so. It's not often that you can sit in your office and make travel plans in the same week for Acapulco, Mexico City, Hampton, Va., Singapore, Thailand and Toronto. My latest joke, which isn't so funny anymore, is that my wife puts name tags on my kids so when I come home I know who they are.

Q: It must be exciting though, career-wise.

A: There's no question it's exciting. We have to make the commitment while the opportunities are there. So far, everything's been positive.

Q: When did SMG start its global effort?

A: We've been a global company for some time. The newest push is really on the convention side. We've had a European division that has existed for a dozen years for sports and entertainment venues.

On the European side, for tradeshow venues, there's been less room for us at the table, the European model being the messe model, where the show organizers and the building are the same entity. There's been not as much room for us to enter that marketplace.

Q: What makes the international market promising?

A: In the eight years I've been with the company, we've taken inquiries from venues around the world. Whenever I'd come up with these oddball requests over the years, our CEO would come back to me and say, Look, we need to service these accounts and give them the same deliverables as we do in North America.

Based on how much we've built up our company in North America from a corporate structure, and the support of our European division, we've been more comfortable entertaining these conversations.

Q: How did E.J. Krause enter the picture?

A: In Mexico, I'd been in negotiations with a city for 2 1/2 years that did not pan out. All of a sudden, just based on our relationships with E.J. Krause, the Mexico opportunity came up, primarily because the building had been up for sale for a number of years, and a buyer came through.

They were astute enough to realize they weren't in the business of managing tradeshow facilities. It was a natural for them to go to one of the biggest show organizers in Mexico, E.J. Krause. There was a very quick call from E.J. Krause to us. It all came together very nicely.

Q: Is there a big difference between running a facility in Mexico or Asia and doing it in the United States?

A: From a pure industry standpoint, the differences are minor. The differences that you need to get into more quickly are cultural differences and legal differences when you're working in another country. Therein lies the unique partnership with E.J. Krause.

Q: So what exactly is E.J. Krause providing?

A: I'm very quick to point out when I talk to other show organizers that E.J. Krause has absolutely nothing to do with running the facility. They don't have access to the booking calendar. They're a good show tenant like anybody else.

Our partnership with them is completely separate. E.J. Krause has been in Mexico for the last 14 years. (If not for the relationship with them) it would have easily been two or three years of struggling through taxation issues and how you transfer funds across the border and how you deal with human relations issues like government protection for employees. I can be on the phone with my counterpart, Paul St. Amour, who is their director general down there. I can get very quick answers, as opposed to paying a fortune for attorneys or finding out through trial and error how things are done.

Q: How did the partnership for the Singapore resort come about?

A: Our relationship with Harrah's has existed for a very long time on a local level. I personally worked at the Atlantic City Convention Center. Yet this Singapore partnership came through a consultant named Jonathan Galaviz. He's an American who has a lot of experience in Singapore. I got a voice mail from him at 11 in the evening introducing himself as working with Harrah's. After a day or two of jockeying time zones and getting used to those across-the-world calls, he and I connected.

Q: What makes the proposal interesting?

A: The long-term implications for this first gaming license in Singapore are going to be in the billions of dollars for any gaming operator that gets the award. Clearly, the Singaporean government is licensing gaming not for its own sake, but because it was a means to an end to get incentive to develop a new convention-congress-meetings-exhibition facility that would of course drive new business tourism into the country.

People don't have to look back too far to when Singapore really owned the Asian congress and exhibition hall market before China opened up. It's still a wonderful place for people to look to because of its westernized feel and the fact that English is the primary language.

Q: Does China have potential for facility management clients?

A: We're certainly looking at China, just as everyone else is. We're talking right now to two cities in China. We have a delegation coming from one of those cities to do a property tour that will start in Toronto and then weave through Denver, Salt Lake City, Mexico and Honolulu before heading back to China. The ironic thing is I'll be meeting them in Toronto the day after I fly back from Singapore.

We're also discussing things with a number of Middle Eastern cities. As well, finally both Western and Eastern Europe are recognizing that the messe model is not the only one.

Q: When will private management really take off?

A: We think it's today. We think it was yesterday. We're certainly not in search of world domination. We believe we're the right model for a lot of people. Yet there are certainly plenty of facilities that are extraordinarily well run without necessarily subcontracting services out to a company like SMG. We don't usually drive into town and say we'd like to run your building.

Q: How does SMG secure facility-management contracts?

A: There are really only two models for how we get these management contracts. The most traditional one these days is new development. Cities are so used to privatization at this point that if they're going to develop a new asset, such as a convention center or arena or stadium, they realize they're not in the business of running those things. We'll get a lot of inquiries from cities in the development stage, or architects or consultants that do the feasibility studies for these things.

Q: Have many existing centers become SMG customers?

A: There are not as many, but certainly a few of them. These are cities that have had a venue for an amount of time and see us as a means to better their financial performance, better their service levels and let a company that specializes in this field take the keys and run with it.

In the old days, there was a simpler model of trying to run a building. It was turn on the air-conditioning and lights, lock up at the end of the day.

Q: What are some other advantages of the private-management model?

A: The first thing we tell people trying to get a building built is we're not architects, we're not engineers. What we are is professional operators, so we can sit alongside the architects and engineers and be the owners' and operators' eyes.

It could be a real simple thing, like cathedral ceilings that are so high you can't get them clean. Functional things like how much power and electricity and exhibitor services are provided for in the lobby.

Q: How does the fact that SMG is owned jointly by Hyatt and Aramark play out on a facility-management level? Does SMG use Aramark for food services in the facilities it manages?

A: No, clearly the opposite is true. It's typically not up to us as a facility manager who runs the food and beverage. We're very arms-length from Aramark. We have a great relationship with them, but we have a great relationship with the other food and beverage providers as well.

Q: Many SMG facilities were affected by this year's hurricanes. What lessons came out of those disasters?

A: The entire Gulf of Mexico, which tends to be a target for hurricanes, is lined by facilities we operate. It's not a question of "if," it's a question of "where." So obviously, preparedness is important.

The first thing we learned was, count your blessings, both personally and professionally. Systems help in a time of crisis. We have crisis management manuals, simple checklists of what to do with various crises. It's helpful to go to a notebook. When you're calm, it's fine, but when you're under duress, it's a different story.

Q: Do most facilities have crisis management manuals?

A: Every one of our facilities does. The other thing we learned is the importance of having satellite phones on hand. You lose communication and you're in a lot worse shape. Once Katrina hit, we started shipping satellite phones to our facilities just to make sure they'd be able to get in touch, not just with authorities, but with our corporate offices in Philadelphia.

Q: How did SMG react to the disasters?

A: We each went into our modes. The operations people were all about making sure our employees and assets were as well-protected as could be. From my standpoint, within those few days I was dealing with anywhere from a half-dozen to a dozen calls from show managers who realize that life does go on.

Q: Will there be any lasting impact from Katrina?

A: I think a lot of what the impact could have been was already instigated after 9/11. Clearly, there are huge differences between terrorism and catastrophic weather events, but the end results are still the same. I think things that 9/11 caused people to look at may have been a head start for things like Category 5 hurricanes.