TSW's Global Leaders: Phoenix Rising

Steve Moore couldn't have appeared in town at a better time. He began his new job as president and CEO of the Greater Phoenix Convention & Visitors Bureau in March 2002, six months after Sept. 11, and just in time to join a number of business leaders who would eventually talk turkey with state and city government leaders about what it was going to take to turn around the city's post-9/11 slump.

At the time, Phoenix had a convention center that had gone virtually unchanged in the quarter-century since it was built. It turned out to be his charge — with the help of others in the local business community — to not only make a case for investing nearly $1 billion in a convention center expansion that would result in 900,000 available square feet of space by 2009 and a new city-owned 1,000-room hotel next to it, but to also then sell it in a national marketplace that didn't exactly have the Southwestern city at the top of its site-visit list.

Moore certainly came to town well-prepared for the job. He had spent the previous 14 years as a CVB executive director in San Antonio, another city that was making an aggressive entry into the convention business during his tenure.

Moore spoke to TSW Editor in Chief Michael Hart about the future of Phoenix's tradeshow and meetings business, its competitive set and even the "Gaylordization" (referring to the Gaylord resort hotel chain) of America.

Question: What happened in Phoenix to motivate all these changes?

Answer: Originally, nine of us convened after 9/11 to see how Phoenix could have a sooner-than-later recovery from the tragic effects of 9/11. There was an organization that came together called the Business Coalition with entities such as the Greater Phoenix Chamber of Commerce, the CVB and the Greater Phoenix Economic Development Corp.

The first thing that came to light was this: We had this opportunity to build a convention center and to bring visitors into this Valley. That was something that would have an immediate result, as soon as the building was completed.

It was actually the first project embraced by the Business Coalition.

Q: Why did the coalition embrace it?

A: Because it was not going to require much more than taking advantage of the already unmet demand for Phoenix as a travel destination. People knew that people wanted to come to Phoenix. It was quite evident with the resort business we were still enjoying.

But we had seen myriad conventions leave Phoenix, or not even choose to put us in the mix, because our facilities had stood still.

They also understood that a downtown convention center and a hotel would be a catalyst for subsequent vibrancy and development in downtown Phoenix.

Q: In many cities, a new hotel isn't built right on the heels of a major convention center project. How did you pull that off?

A: We had said, "Don't build a convention center expansion if you're not adding hotel inventory downtown too." So, less than a year after the legislature approved the expansion and their funding for it, the city of Phoenix signed a deal to build and own a hotel downtown.

Q: What else have you got planned?

A: We've got the Super Bowl coming to the Valley (in 2008). We're going to be bidding on the (NCAA) Final 4. There are other mega-events we will be pursuing almost on an annual basis. It will start with the NBA All-star game in 2009, and you will continue to see mega-events that fortify the idea that this Valley is the place to come and have an event at.

Q: Who are your competitors for tradeshows and meetings?

A: We are competing with Salt Lake City, San Diego, San Francisco and Denver.

We're seeing changes since 9/11. One of them is that bigger shows are waiting later to book. Secondly, they're not sticking with the time zones they used. You can find yourself competing with Philadelphia. That typically wasn't the case pre-9/11.

Q: With all these new facilities, do you plan to compete for any of the first-tier cities' business?

A: No, because our convention center is not going to be that large. Vegas and Orlando both enjoy well over 100,000 rooms. Chicago has probably 70,000, plus McCormick Place is a market center. There are shows that won't go anywhere else.

Q: With the competitors you mentioned in mind, why should an organizer choose Phoenix?

A: Right now, downtown Phoenix is not known as a destination for leisure travelers. You get here and you're not competing with leisure visitors for hotel rooms. So the convention client is able to have a more affordable hotel sleeping rate package here. Some other cities have that issue.

Q: How does Arizona's ability to attract leisure travelers help you with the meetings business?

A: Not everybody wants to go to a convention in downtown Phoenix, but we think everybody wants to go to the Grand Canyon. We're sending busloads of delegates, groups that qualify and book in a certain time frame, at our expense to the Grand Canyon for the day.

Vegas already is using that canyon as a convenient way to get people to stay another day, and yet the Grand Canyon is not even in Nevada. We need to create more of an awareness of the proximity to the Grand Canyon and Sedona to this convention center.

Q: And what about Las Vegas, the elephant in the room, just 300 miles away?

A: Our market feasibility study is reflective of a post-9/11 environment, which includes a successful Las Vegas. They have three or four destination convention centers. We understand that there's going to be a ton of business that continues to go to Las Vegas.

Is Vegas a distraction? Certainly it is, but all that was taken into consideration when this was built: That it would be a post-9/11 environment, with Vegas up the road doing what they do best, and with other destinations in our time zone also adding inventory and upgrading their product.

There's more than just the Vegas phenomenon going on. I would also say the "Gaylordization of America" is taking business segmentation away from convention centers.

Gaylordization is probably more impactful on destinations like Phoenix than Vegas would be, because groups going to Vegas have to meet a higher threshold on food and beverage expenditures before they can even get dates at some of those larger properties.

Q: Give me some examples of groups you wouldn't have been able to get without the center expansion and new hotel rooms?

A: Microbiology, military surgeons, secondary school principles, thoracic surgeons. We resigned the beef cattlemen's convention. We wouldn't have been able to keep them before.

Q: What is this post-9/11 environment you talk about?

A: We've had several quote-unquote "new normals" since the '70s, major disruptions of the GDP (gross domestic product) that affected the meetings industry. If you recall, the limousines disappeared from the front of the hotels about 15 years ago. The suites in a hotel used to be 20 percent; now we're 10 percent, sometimes maybe 5 percent.

Post-9/11, this new normal? There is so much inventory out there now that meeting planners don't have to hurry up and choose. The attrition clauses have taught meeting planners to not book too far out there, until they know what their business resume looks like.

Q: How has your CVB budget and staffing changed with this strategy?

A: When that bill was passed in 2003 (approving funding for the convention center), we went from a double AA minor league destination, as conventions go, to the major leagues.

Keep in mind, the building hasn't opened yet. So you're selling a concept: You can't walk through it, you can't sit in it. You're not really re-booking business, because the business you used to have you're growing out of.

Q: What exactly have you done?

A: We re-engineered this team. We found individuals from other destinations that had national tradeshow experience. We got two from New Orleans. We got one from Salt Lake City, one from San Antonio, one from Milwaukee. We're just hiring another from San Diego.

We went out and got experienced salespeople that knew how to book a new and expanding convention center. They brought with them the trust, respect and client base that has worked for us, and now we find ourselves about 15 to 20 percent ahead of pace.

Q: How are some of your older customers who liked the old Phoenix taking all this?

A: Our goal is to get into the business of moving business to book business, which I'm actually in the middle of doing right now. We've got the NBA All-Star basketball game in '09, and I'm in the middle of finding options for a client that's already there.

At the end of the day, we're going to have to call that client and say we have the chance for a mega-event in the city, but we want to take care of you a week or two earlier. The client may not like it. He's contracted the rates and the dates for the building. It's not going to be easy.

Q: You spent 14 years in San Antonio, during which it grew into a very popular meetings destination. How would you compare that situation with Phoenix's today?

A: San Antonio took a visitor destination, turned it into a convention destination and kept its visitor destination appeal. Now it's like Orlando or Vegas.

Destinations that have appeal and awareness, accessibility and a steady marketing environment are going to sustain and recover sooner and better than destinations in other places. That's what convinced us Phoenix was a good investment.

Q: What's different about the two situations?

A: San Antonio is probably more of a regional destination. Phoenix is more of a national-awareness destination, a fly-in destination. San Antonio enjoys a huge drive audience, and it tends to be a little bit more recession-proof than we are.

When people didn't fly after 9/11, they drove. That was good for San Antonio and some other markets. They did not suffer as much lost business as some of us that are more fly destinations.