Facility Management: SMG Nails Second Mexico Deal

Gregg Caren worked 2 1/2 years to put together SMG's first deal to manage a venue in Mexico — before it fell apart. Now's he's announced that the Philadelphia-based sports and convention venue manager has landed its second venue in Mexico — in four months.

SMG Mexico will manage the Expo Imperial and Foro Imperial, a 360,000 square foot convention center and 4,800-seat theater, just now beginning construction in Acapulco. When completed in November 2007, it will be part of Mundo Imperial, a project that is to include an 879-room hotel and 210,000 sq. ft. of restaurants and retail.

"It'll be Las Vegas-style," said Caren, SMG vice president of operations and business development. "A Mandalay Bay without the gambling."

The mid-February announcement of the Acapulco project followed by only 3 1/2 months the initiation of a contract for SMG to manage Mexico City's World Trade Center, with 138,208 sq. ft. of exhibit space, and the company's first property in Mexico.

"I knew it would take some time to get our first venue in Mexico," Caren said. "Then others would be more ready to make a commitment, but I never dreamed it would happen so quickly."

As with the World Trade Center, SMG is undertaking the Acapulco project in conjunction with E.K. Krause & Associates, the Maryland-based show management firm that has been running tradeshows in Mexico for a number of years. While SMG brings its expertise as a venue manager, E.J. Krause knows the ins and outs of operating in Mexico.

"Teamwork is the key to promoting Mexico as an international place for events," said Paul St. Amour, director general of E.J. Krause's operations.

Acapulco already has one tradeshow venue, the Acapulco Cultural & Convention Center, with 371,081 sq. ft. of exhibit space. However, the Pacific beach resort has not attracted the same kind of attention from American tourists as it did 15 or 20 years ago. On the other hand, Cancun (whose Cancun Center Conventions and Exhibitions has 78,000 sq. ft. of exhibit space) markets itself frequently to American business groups. Meanwhile, Acapulco's proximity to Mexico City continues to make it popular with Mexicans.

Like many American companies, SMG has been interested in global expansion. It is working with Harrah's Entertainment and Keppel Land on a plan to develop a casino and convention center project in Singapore.

And, Caren said, "We're in very light conversation with another small city in Mexico. I don't know where that will go."

For the time being though, he has the market to himself.

SMG's closest competitor in size, Global Spectrum, has management contracts overseas, typically with local partners and primarily in Southeast Asia. Global Spectrum President and CEO Michel Sauers said he's also looking at opportunities in the Middle East.

"But our focus is on growth areas, and Latin America is not one of them," Sauers said.

A Mexican conglomerate, CIE, operates several convention centers, including the country's largest: Centro Banamex Exhibition & Convention Center in Mexico City. It also organizes its own tradeshows, runs theaters and amusement parks, sells advertising, and operates an automated ticketing service (similar to Ticketmaster).

"If they were opening a venue, they'd do it themselves," Caren said. "Our advantage is that all we do is manage venues."

And offer access to the United States.

"The Mexican tradeshow and convention industry is eight to 15 years behind us," he said. "So, having the contacts we have, we're better poised to bring events down."

Even Global Spectrum Senior Vice President Tom Mobley noted that, although his company doesn't see an opportunity in the country, "the Mexican tradeshow market certainly is growing."