Readers Speak: How Much Space Is Too Much?

According to Tradeshow Week research, some 11.5 million square feet of new exhibition and meeting space is in the U.S. pipeline. In the coming years, will there be enough bigger shows, conventions and meetings to fill that inventory?

Or will there be a glut of space that puts show managers and convention organizers in the driver's seat as they negotiate with convention centers? And how will a potential economic downturn shift the fragile balance between show manager and venue operator?

Contributing Editor Gary Tufel spoke with a cross-section of show and facility managers about the situation.

“While the influx of new exhibit space looming on the horizon may net some negotiating flexibility for show organizers, pricing in the market as a whole will still be dictated by location. Demand in first-tier cities such as New York and Los Angeles remains strong, necessitating that planners be on their toes when it comes to negotiating deals.”

Diane O'Connor, President, Green Media Enterprises

“It all depends on location and venue. One would think that with the amount of space coming online in the next two years in Las Vegas that deals would be happening, but that is not the case. Hotels are holding firm, and so are the major convention centers. Second- and third-tier cities we are placing shows with are not moving on pricing, and new buildings that we are talking to are also holding firm on their prices.”

Robert B. Kolinek, President and CEO, Helen Brett Enterprises

“I don't necessarily believe that the larger venues, 250,000 sq. ft. and more, are being overbuilt. Since one of our shows is in the TSW Top 200, we're very limited as to how many convention centers we can choose from in our desired geographical area. I often wish we had more of a choice.

“I do, however, think mid-size centers may suffer if there is an economic downturn since there are so many more of them. Show managers may be forced to negotiate better concession packages from centers in a recession, especially if anticipated booth count is forecast to go down.”

Colette Fairchild, Tradeshow director, H.H. Backer Associates

“Pitfalls exist because 'new' and 'capable' do not always come together. Many cities are adding significant convention space in hopes that business will follow. Unfortunately, most of this new space is being added with little or no supporting infrastructure, which is critical in holding successful events.”

Chuck Bowling, Executive vice president for sales, channel marketing and distribution, MGM Mirage

“My answer must logically include 'depends on what type of space.' I think mega and high-growth shows may need more space and, if shows shrink, there may be an even greater demand for second- and third-tier venues. If there is a space glut, yes, organizers will, realistically, indeed push for deals.”

E. Jane Lorimer, Managing director, Lorimer Consulting Group

“The condition of our economy certainly has a significant impact on the tradeshow business, as does the inventory of space available at tradeshow destinations. However, the impact must be considered from market to market. Strong markets will continue to be successful in booking, and weaker markets will feel a larger negative impact. As inventory swells, particularly in secondary markets, meeting planners gain an advantage in negotiating their bookings.

“I am concerned that, as markets succumb to strong negotiating by meeting planners by reducing rents or other costs, the quality of convention facilities and service are at risk. The pendulum of supply versus demand in this business will continue to swing back and forth, over time giving either meeting planners or destinations an advantage in negotiating. Spikes in new space coming on line will level off, and I believe we will continue to track close in the supply and demand of space.

“The good news is that the tradeshow business continues to be a healthy industry and weathers economic storms better than most industries. In the long term, both meeting planners and convention center destinations will continue to enjoy success.”

Greg Smith, Executive director, Anaheim (Calif.) Convention Center

“We know that space is still just one element in the decision-making process. The overall industry-wide influx may stimulate more aggressive near-term pricing that benefits show managers, but the ultimate value still resides in the benefits that the destination can provide to organizers and attendees. We have outstanding facilities and a great hotel package. I feel Charlotte is well positioned to deliver that value.”

Jeff Hewitt, Senior director of sales, Visit Charlotte

“The best-run shows and events are going to continue to do well, and the most user-friendly convention centers and event venues will do well. That's just the way it is through every economic cycle. During boom times people will try just about anything.

“That's why it's particularly important now for managers and producers to examine their products and make sure they're still relevant to the marketplace and that their shows and events are user-friendly.

“We have to work that much harder to get people in the door, especially those of us who work in the public show and event arena. There's huge competition for the public's dollar, what little they have left after paying their escalating mortgages and gassing up their cars.”

Tim Parrott, Owner, Tim Parrott Event Management