Venues Pay to Play in the Game of Industry Events

By Heidi Genoist -- Tradeshow Week, 1/30/2006

Ask an official at any convention and visitors bureau or privately run venue, and they'll tell you times are tough. Customers want the moon — free shuttles, food and beverage, meeting rooms — and hosts are expected to deliver all this on top of first-class service, sometimes with budgets that are down millions of dollars from five years ago.

But if expectations are high in general, they're particularly high when it comes to hosting an annual meeting for the convention and exhibition industry itself. Venues liken it to cooking a meal for food critics or fellow chefs. You have to pull out all the stops — and it's on the house.

What goes into wooing these lucrative clients? And, more importantly, is it worth it?

When it comes to landing an industry meeting, the bid process is like any other. The group issues an RFP, and venues make competing bids. There's the usual insider gossip and spying, but because the RFP spells out expectations, the playing field is level.

Still, the competition is fierce.

Although venues are reluctant to divulge the dollars and cents involved, they acknowledge that convention and exhibition industry associations expect more pro bono work than other associations.

"Typically, for instance, they will assume they get a free convention center," said Richard Scharf, president and CEO of the Denver Metro Convention & Visitors Bureau, which hosted the annual meetings of the American Society of Assn. Executives in 2002 and Meeting Professionals Intl. in 2004.

"There do tend to be more requests from these groups, because of the great potential for developing future business, and to an extent, that is certainly justified," said Chris Meyer, senior director of convention center sales for the Las Vegas Convention & Visitors Authority, which hosted the Intl. Assn. for Exhibition Management's 2003 meeting, working in conjunction with Caesars Palace.

At the 2004 annual meeting of the Professional Convention Management Assn., a delegation from Hawaii, site of the following year's meeting, made what they called their "bodacious offer." Any PCMA member who booked a meeting for 2005 to 2010 would get free rent at the Hawaii Convention Center, managed by SMG.

The giving doesn't stop with the RFP, either. At the meeting itself, venues are often expected to provide hotel rooms for both meeting planners and major suppliers. The groups demand this because they bring so many customers to a city at one time, and suppliers are often partners in producing their own events.

If the bid process is stressful, the real pressure starts after a venue has landed the meeting. Now, it's got hundreds of its toughest critics and potential customers coming to give it the once-over.

"It's challenging, because even the hotel people (representatives attending the meeting from other properties) can really hurt or help you. They're more critical sometimes than the customers," said Randy Miller, vice president of sales for Gaylord Opryland Resort & Convention Center in Nashville, host of the 2005 ASAE meeting.

For PCMA's recent 2006 meeting, the Philadelphia Convention & Visitors Bureau formed a host committee made up of representatives from hotels, restaurants, cultural attractions and transportation services. The group met regularly throughout 2005 to coordinate a hospitable reception for PCMA attendees, arranging to have everything from banners to handshakes awaiting them at every point of arrival.

Cities rally the support of their best special event sites — such as the recently opened Georgia Aquarium in Atlanta, site of the opening reception for IAEM's last annual meeting. Chefs develop their best menus. Hotels offer up their presidential suites.

So, does it all pay off? In spades.

The Philadelphia CVB estimated that PCMA would have an immediate regional economic impact of $11 million.

And that's nothing compared to the long term.

Ask any venue salesperson and he'll tell you that getting people on-site is key to getting a booking. Denver, for instance, reports that 70 percent of those who visit book a meeting there.

Scharf said follow-up calls a year after ASAE helped Denver land about $100 million of tentative and definite business. "We just booked a corporate customer last month who was here for MPI and said they loved the city because of that experience," he said.

Miller agreed there is ROI in industry meetings. "Without a doubt," he said. "All we need is one, and it's $2 million." He estimated that Gaylord has booked about a dozen conventions — generating an average of 5,000 room nights each — that can be either directly or indirectly attributed to ASAE.

SMG reported that its offer resulted in 11 bookings for the Hawaii Convention Center, expected to generate more than $120 million in visitor spending and $10 million in tax revenue for the state.

A Philadelphia spokesperson reported that the city anticipates $100 million in new business as a result of hosting PCMA.

In addition, there's an abstract impact. Miller said that the ultimate value of hosting industry meetings comes from the lasting impression the venue makes on the community of people gathered there.

Noted Scharf: "Everybody talks about how important the industry is. The local newspapers cover it. It shows how friendly your city is."

Robert Moore, Gaylord Opryland's director of conference services, said hosting an industry meeting also provides an opportunity to revamp services. "You ratchet things up, and really take a thorough look at your operation," he said. "Then you question why you couldn't do it that way all the time, and keep it as a standard."

Getting an industry meeting on the books shouldn't be taken lightly.

First, it should be part of a larger marketing strategy. Gaylord Hotels had just opened the Gaylord Texan Resort & Convention Center in Grapevine, Texas, and was touting final plans for the Gaylord Natl. Resort & Convention Center in Washington, D.C. The company underwent a culture change following the 2000 arrival of Gaylord Entertainment Chairman and CEO Colin Reed. It saw ASAE as an opportunity to reintroduce the Gaylord brand to a key market.

Second, landing an industry meeting requires planning. A venue should be able to set aside some funds and build relationships with hotels and other beneficiaries to offer sponsorship packages.

"It's not inexpensive, and it's not easy," said Scharf. "You have to work at it. A lot of cities get into it and at the 11th hour cut back and get tired. You bid on it five years ago, and now your city's bankrupt."