So You Want to Build a New Venue

The convention center building boom continues. Today, more than 70 new convention center projects and major expansions are underway in North America. While down from the high-water mark of 96 projects in 2001, it's still not far from the 10-year average of 73. These new venues and expansions will add approximately 8.2 million square feet of exhibit space to the existing inventory in years to come.

• The convention and exhibition industry is growing at a steady rate. Based on preliminary analysis, 2005 conventions and exhibitions in the United States and Canada expanded by more than 3 percent in net sq. ft. and close to 5 percent in total attendance. In 2004, they grew by 1.5 percent in net sq. ft. and 3.1 percent in attendance.
• The recently released 2005 Center for Exhibition Industry Research census identified 14,124 events with at least 3,000 net sq. ft. of exhibit space held in the United States and Canada in 2005. That was up from 13,185 events in 2000.
• In 2005, Tradeshow Week counted 440 venues with at least 25,000 sq. ft. of exhibit space in the United States and Canada. This was up from 379 facilities in 2000. Over the same period, total exhibit space increased from 65.5 million sq. ft. to 82.3 million sq. ft.
• The mega-venues, those with more than 500,000 sq. ft. of exhibit space, only account for 8 percent of all venues. The rest of the convention center market breaks out as follows: 100,000 to 499,000 sq. ft., 45 percent of the market; 50,000 to 99,000 sq. ft., 32 percent; and 25,000 to 49,000 sq. ft., 15 percent.
• The average U.S. or Canadian convention center offers 187,066 total sq. ft. of exhibit space, 157,243 sq. ft. of prime exhibit space and 26 meeting rooms with a total of 56,111 sq. ft. of meeting space.
• Conventions and meetings often drive between 25 percent and 40 percent of a community's tourism and hospitality gross revenues.
• According to Destination Marketing Assn. Intl., a convention and exhibition delegate generates an average economic impact for the host city of $1,449 per event visit.
• The average convention and exhibition is booked 4.4 years in advance. Twenty-three percent of events are booked six or more years out, and 9 percent are booked more than 10 years out.
• Beyond ensuring a city has enough prime exhibit space, the main site-selection driver for event producers is a city's hotel capacity, quality and range of price points.
• Most municipal convention centers are primarily built to serve the national association market. The only challenge is that few associations are launching new conventions today. A recent TSW study indicated that 6 percent of association executives expect to launch new shows with exhibits.
• Besides holding multiple events simultaneously and planning more efficient move-in and move-out schedules, venues today focus more than in the past on improving attendee productivity and serving both the local corporate community and general public. While convention centers are built to promote economic impact from business travelers from other regions, communities are key venue users as well.

In light of increased competition, disruptive effects of the Internet on traditional media, and generally conservative corporate spending on travel and marketing, the convention industry has been very strong.

Besides looking at market demand, lost business reports, competitive issues, land and construction costs, hotel development issues, and marketing challenges and opportunities, venue stakeholders should ask:

• What does our city's tourism, corporate, commercial, and convention brand (or brands) stand for? How can new venue investment link all these distinct aspects of the community?
• What does our current venue's brand stand for? How should a new venue or expansion enhance this brand image?
• Are the key stakeholders and decision-makers in the development process as up to speed with trends in the national convention, exhibition, hotel, travel and media industry as they should be?
• What will the convention and meetings industry in our city and competitive set look like in five, 10 and 20 years?
• How can we develop new services to become the best-of-class venue in our competitive set?
• Are we hoping to compete mainly by building a new facility? Or are we also committed to investing in marketing and new service development to compete and service event planners, exhibitors and attendees?
• Does the local hotel community truly understand how the national convention market has changed?
• Are we pricing our exhibit space and services effectively? How will a new venue or expansion affect our pricing model?

The good news is that the convention industry is experiencing attendee-led growth, and the growth should be sustainable. The challenges are more competition and the sheer quality of today's convention centers in terms of design, fit and finish.

But it may be time for venue development stakeholders to say what the next version of the municipal convention center will be. I believe it will be focus on providing new services and helping event producers, exhibitors and attendees become more efficient and successful.

Eventually, a visionary group will create the next model.