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The Honolulu Advertiser
Posted on: Monday, August 13, 2001

Small cities gain edge for meetings

USA Today

Smaller cities and suburbs are luring business meetings and conventions from top destinations by offering cheaper services.

Hawai'i's convention market has suffered along with other big cities. In the first six months of 2001, 14 conventions took place with 34,350 attendees, compared with 17 conventions and 56,430 attendees in the same period last year.

Advertiser library photo • May 11, 2001

"A lot of people are trading down," says Bill Peeper, president of the Orlando Convention and Visitors Bureau.

Bookings by meeting planners interested in Orlando as a meeting site fell 7 percent in the first half of this year compared with the same period in 2000. The number of people attending meetings at the Orlando/Orange County Convention Center dropped 3 percent in January through April of this year from the like period a year earlier.

Fewer meetings and fewer attendees are evident at many major convention centers across the United States, says Heywood Sanders, a professor at the University of Texas at San Antonio who studies the convention business.

In Hawai'i, which has a relatively small convention center a great distance from any other city, the problem has not been the ankle-biters. It's been doing battle with the big guys.

"This is not an area of concern," said Sandra Moreno, vice president of convention center marketing for the Hawaii Visitors and Convention Bureau. "We lost to bigger centers because of increased flexibility for the planner. Four million square feet of new space is being completed in centers right now, mostly in the western region between 2001 and 2003, notably San Francisco, San Diego, Anaheim, Las Vegas."

The Hawai'i Convention Center has only 200,000 square feet of exhibition space, which is smaller, Moreno points out, than some hotels. The Sands in Las Vegas, for example, has one million square feet.

But like other centers, Hawai'i's bookings are down for the year, both in actual business and the rate at which future events are reserving.

In the first six months of 2001, 14 conventions took place with 34,350 attendees, compared to 17 conventions and 56,430 attendees during the same period last year. For 2001, the bureau aimed to book 52 conventions. So far, 21 groups have reserved.

The trend comes mostly from the soft economy that is affecting centers around the country. And like other destinations, Hawai'i has certainly seen its share this year of lost meetings and corporate business, and every island is suffering. The cancellations come mostly from companies that don't want to spend the money to come this far, or don't want to be perceived as living it up in an economic downturn.

Major conventions are booked years in advance, and their locations are rarely switched. But on the Mainland some smaller meetings are being canceled or moved to less expensive sites this year as companies and business groups cut costs in reaction to the weaker economy.

About 40 percent of meeting planners say they have selected or are considering convention centers in less-expensive cities to save money, according to a July survey of 436 meeting planners by Equation Research and Meeting News.

"The pendulum has swung, and swung faster than any of us anticipated," says Mark Theis, vice president of the San Francisco Convention & Visitors Bureau.

What's boosting the small-cities' meetings business:

• A construction boom. About 25 percent more convention and exhibition space will be added in the next five years, says Tradeshow Week magazine.

Of the 22 new meeting centers and 72 expansions planned nationwide through 2005, many are in smaller cities such as Sandy, Utah; Springfield, Mass.; and Kissimmee, Fla.

Another way smaller cities are competing is by investing in the latest conference technology and amenities that large city venues offer.

The Greater Columbus Convention Center in Columbus, Ohio, for example, added 80,000 square feet of retail space this year, including a food court, business center and cigar shop.

• Cheaper convention and hotel rates. When computer equipment company Unisys went on a product announcement tour with Microsoft this year, it avoided many of the cities where it used to stop.

Unisys chose San Jose, Calif., instead of nearby San Francisco, and Fort Worth over Dallas for a five-city tour to tout its product announcements this year.

Instead of repeating last year's stop in New York, Unisys skipped it altogether, and it also chose suburban Lisle, Ill., instead of downtown Chicago.

• More complimentary services. The Simmons Center in Duncan, Okla., is landing corporate and government business for the first time, says event services manager Debra Burch.

Spectrum Field Services, a gas-purchasing company, chose to hold its annual conference in Duncan instead of Tulsa or Oklahoma City, in September because it will cost half as much.

Spectrum will get complimentary parking, audio-visual equipment and electrical help, says Lynn Flener, Spectrum's project coordinator. Many convention centers in bigger cities charge separately for those services.

The Greater Fort Lauderdale Convention and Visitors Bureau is inviting meeting planners for golf and fishing weekend trips to attract business to its city, less than an hour's drive from Miami.

"We are bringing them here and daring them not to come back," says Nicki Grossman, bureau president. "That's a new strategy for us."

Meetings booked so far this year are up 5.5 percent over the like period last year. But industry analysts say some of the new meeting facilities may not outlast tougher competition.

More space, fewer meetings and a slowing economy make "a recipe for market problems," Sanders says.

"The question becomes who's going to get creamed," he says. "I suspect we will be seeing a number of centers competing on price."