The Key to the City

Few professionals have as much impact on their city and region as convention and visitors bureau and venue marketers. While today there are tensions in a number of cities among CVBs, venues and hotels, destination and convention marketing has been a pretty good business lately.

Conventions and exhibitions have been stable, growing by about 2 percent in attendance during 2006. Corporate meetings and business travel also have been very strong.

Today's challenge for CVB and venue leaders is trying to top what have been pretty good years. The only thing worse than having a bad year is having a good year, especially in an industry that, while strong, is getting more competitive.

Adding to this complexity is the fact that CVBs are working to book events and groups three, four and sometimes 20 years out, all while being judged by today's occupancy.

With the goal of quantifying destination and convention marketing issues, Tradeshow Week and the Assn. for Convention Marketing Executives recently developed a study of industry marketing benchmarks and best practices. We surveyed leaders at CVBs and convention centers throughout the United States and Canada.

The key theme of the survey was to figure out how to do more — more of almost everything.

CVBs and venues understand they need to do more to service their clients, add value and differentiate themselves from competitors. Destinations know that they can't simply build a new venue, expand on an old one, or hope that hoteliers will drop their rates 10 percent.

In fact, one of the findings is that hotels dominate and set the agenda for CVBs and convention centers. CVBs and venues measure much of their success by the number of booked hotel rooms, according to 81 percent of the survey respondents. The second and third most cited success metrics are total economic impact (66 percent) and hotel occupancy rates (45 percent).

The relationship among hotels, venues and CVBs is often conflicted. Most everyone at a CVB or convention center will say their city needs at least one or two more large, high-quality, moderately priced convention hotels. But privately, many are frustrated at hotel owners and managers that "don't get it" that the primary site-selection driver these days relates to hotel costs. They say that hotels are pricing for events years out using today's high occupancy levels.

Hotels say they are only responding to supply and demand. The ACME-TSW survey confirms that hotel rates are likely to continue to rise. Survey respondents say the total number of hotel rooms available for meetings and conventions in their cities is increasing by only 1.9 percent. However, the average rates for the rooms available to them are going up 6 percent.

These figures fit the historical growth pattern. According to David Anders, hotel and gaming analyst with Merrill Lynch, between 1987 and 2005 the total number of hotel rooms increased at a compound annual growth rate of 2.3 percent, while total room revenue increased at a compound annual rate of 5.4 percent.

Last fall, TSW research asked convention and exhibition producers what the key factors in selecting host cities were. The top three responses were hotel room price and quality, number of hotel rooms, and hotel block attrition rates and issues.

Even though this is a still a good environment for hotel development, many cities will have a tight supply for a number of years.

The corporate branding wave has influenced cities and venues. A significant 49 percent of the respondents said their organizations and citywide partners either just finished a re-branding process in 2006 or are in the middle of one this year. Another 9 percent said that they have a re-branding process planned for 2008.

CVBs and venues are re-branding to keep up with regional change and strong competition. When reviewing your brand, keep it simple. Come up with one word that describes your destination and venue, and the event producer, exhibitor and visitor experience in your market. Admittedly, it's not easy to do.

Many of the new branding and marketing efforts are focused on the Web. CVBs and venues are using the same types of things other business interests are to reach event producer clients and prospects:

• Dedicated Web sites: 86 percent of respondents
• E-newsletters: 58 percent
• Email blasts: 51 percent
• Search marketing, key words: 39 percent
• Banner ads on other Web sites: 36 percent

Just as we expect show producers to embrace online video, cities and venues will add more video content on their sites too. Still, many CVBs do not yet have their own TV commercials up on their Web sites.

One of the most active new areas for cities and venues is partnering with their event clients to drive attendance. A significant 73 percent of CVBs and venues provide event organizers with some type of attendance marketing assistance. The most common is public relations support; adding event information to the CVB and venue Web sites; and putting planners in touch with city, state and regional groups and government agencies. Other examples are enhanced event signage in airports and around the city; venue and hotel discounts and rebates; and e-mails to potential local attendees.

Besides concerns already mentioned, some of the main challenges impacting city and venue marketers fall into the following categories:

• Available dates (As one marketer said, "Everyone wants the same window for dates.")
• Breaking through to reach decision-makers
• Building destination awareness or trying to change perception
• Getting meeting planners to visit the market
• Helping event planners to market the destination
• Differentiating from competition

On the other hand, some of the most commonly cited opportunities are:

• Marketing affordability and safety — especially in second-tier markets
• Continued economic development
• New hotel development, new venues and expansions
• Healthy hotel tax revenues
• Enhancing customer service
• Online marketing initiatives
• Customized, customer-specific marketing