Trying Harder: Being Second Is Getting Better

By Heidi Genoist -- Tradeshow Week, 2/20/2006

Like a lot of other industries, the tradeshow business is dominated in certain sectors by suppliers so huge that it might seem like they have a monopoly on the services they provide. But in the shadow of companies like SMG, Aramark and Smart City Networks are runners-up that are successful in their own right — and hungrily eyeing the market share of their Goliath competitors.

Take Global Spectrum, for instance. Founded in 1994 as Globe Facility Services by former SMG executive Michel Sauers, the company became Global Spectrum in 2000 when Comcast-Spectacor acquired a majority interest. Although Comcast-Spectacor's parent company is cable giant Comcast, which reported $3.7 billion in consolidated operating income for 2005, in tradeshow-industry terms Global Spectrum is most comparable to SMG (itself a joint venture of Hyatt Hotel and Aramark).

With more than 50 convention centers, SMG claims to serve 98 percent of the market for privately managed exhibition space. The firm operates Reliant Center, the only one of the nation's 20 largest exhibit halls under private management, according to Tradeshow Week's Major Exhibit Hall Directory.

Global Spectrum, on the other hand, manages 11 convention centers — none of which is larger than 250,000 square feet.

But that's not so bad, said Sauers, the company's president and CEO. Being smaller has allowed Global Spectrum to develop the marketing side of the convention center management business in a way none of its competitors have.

"The reason we've grown so dramatically over the last six years is that we play an active role in working with the CVBs and the shows, assisting them with marketing efforts to increase their attendance, exhibitor participation and sponsorships," noted Sauers.

He said that if SMG were Chevrolet or Toyota, Global Spectrum would be like Volvo or Jaguar by comparison: "We have a specialized product. We're more full service, more focused on the client's wishes."

Better service is what all the No. 2 players said distinguishes them from their respective No. 1s.

"The thing that really differentiates us is our flexible approach to our clients," said Dan Poirier, president of Priority Networks, who believes his company is second only to Smart City in providing meeting and exhibition facilities with telecommunications and Internet services.

"We're not the phone company," Poirier said. "When people come to exhibit, they want the phone and Internet connection in their booth to work. It's not their job to sit and work on their computer. It's their job to sell."

He said Priority technicians are trained to contact exhibitors and show managers, and help them work out even small problems. "We'll help them configure their computers, and we won't force them to pay. That's a little different than what you'll see with our competition," he added.

Likewise, Janet L. Steinmayer, president and COO of Centerplate facility caterer, said, "We measure ourselves by how well we make sure people who come to our convention centers are having a memorable experience — and by our ability to bring creative, proactive solutions to our clients."

In the convention center food and beverage business, Centerplate is second to Aramark in terms of the number of contracts with major facilities, Steinmayer said. In 2005, Aramark's U.S. food and support services division generated $7.1 billion in sales (65 percent of the company's total sales), while Centerplate generated $24.9 million in sales.

But Centerplate's team is easier to mobilize for high-touch customer service initiatives, Steinmayer said, citing a customer advisory board made up of event planners that meets regularly with Centerplate managers to talk about improving food service.

"We often design one-of-a-kind events for people. For instance, in San Diego, we did an entire program based on color," Steinmayer noted.

That's not to say she — or any of her counterparts — is satisfied playing second fiddle.

"Yes, definitely," said Steinmayer, when asked if she had a growth strategy for the convention center market. In addition to its customer advisory board, Centerplate has developed a culinary leadership network to foster contact between chefs and clients. These moves are meant to help grow convention center business, which last year accounted for about 25 percent of net sales.

Poirier is also on the move. Priority has increased its sales for the last five years, from $2.8 million in 2001 to $10.3 million last year. The company started by two techies working out of their home in Boise, Idaho, now is based in Las Vegas and has 13 convention center contracts, including San Francisco's Moscone Center and Denver's Colorado Convention Center.

Last year, Priority successfully won bids for the Minneapolis Convention Center, Wynn Las Vegas and Puerto Rico Convention Center, formerly serviced by Smart City.

"We are aware that a number of contracts are coming up for bid, and we plan to offer competition in the bidding process," said Poirier. To give him an edge, he's counting on a skilled engineering team with a good service record, some new cost-saving Internet products and a sponsorship program meant to help facilities and show managers generate revenue on Priority products.

Global Spectrum is also ready for some friendly competition, Sauers said. To expand its exhibition facility portfolio, the company has undertaken several initiatives, most recently hiring former McCormick Place and Washington (D.C.) Convention Center general manager Tom Mobley as vice president of convention centers.

"We have Overland Park (Kan.) Convention Center making $500,000 in operating profit — that's unheard of in the industry," Sauers said. "We have a five-year track record of running centers successfully and making money. Now we're going to tell the world about it."