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The Honolulu Advertiser

Posted on: Monday, November 8, 2004

Convention center hopes to fill booking gaps

 •  Chart (opens in new window): Convention Center bookings

By Lynda Arakawa
Advertiser Staff Writer

The Hawai'i Convention Center is facing a few lean years in bookings, but officials are hoping to shore up gaps with smaller meetings while working on securing large events for several years out.

The Hawai'i Convention Center has only 22 firm offshore bookings for 2005, down from 39 this year.

Bruce Asato • The Honolulu Advertiser

Convention center officials say short-term business — events booked within about a year in advance — will help fill the schedule over the next few years. That's key to the center bringing in tourists and aiding the state's No. 1 industry.

"Bear in mind (that) while the numbers may be a little bit of a shortfall in the near term, there is great potential to fill that puka," said convention center general manager Joe Davis. "If you go on the basis of what the past tells us, then we are going to achieve our numbers. If you look at 2003 and 2004, that is the trend in play."

The $350 million convention center had 39 events for offshore clients booked this year, including conventions for the National Association of Letter Carriers and the American Psychological Association, which together brought more than 20,000 visitors to Hawai'i in July.

The center has only 22 firm out-of-state bookings for 2005 and the number drops to 15 the next year and 13 the year after that.

"We want to be doing 40 to 50 (major events) a year," Davis said. "But the way to get there though is to start to develop this nucleus of repeat business. ... That's what it's going to take in the long run. You can't be looking at it in a one- to two-year time frame."

Davis and sales and marketing director Randy Tanaka said they are confident late bookings will help them through the next few years, and after that they are on pace to meet goals.

"Years '09, '10 and '11 we seem to be a little ahead of pace, but the years '05, '06, '07 we're going to wrestle with a little bit," said Tanaka, who works for SMG, the center's marketing and management firm.

Tanaka noted that about 20 percent to 25 percent of organizations rebook events at the convention center, including the American Association of Orthodontists, which held a convention here in 2003 and committed to returning in 2012.

Before the convention center opened in 1998, consultants projected the facility would host 30 events in the first year and book 60 events by 2008. Targets were later lowered.

This year's 39 events outpaced the convention center's annual goal of 34. But the estimated 162,515 delegates falls short of the 200,000 attendance target.

Hawai'i Tourism Authority officials, who oversee management of the center, said the current targets were set after considering the pace of signing new events in the center, noting many large organizations plan conventions years in advance.

The low level of current bookings doesn't mean the center is left empty between events. About 80 percent of the convention center's bookings are local, but they are not included in the target figures because they don't draw visitors to the state, Tanaka said.

There was a bit of a time lag when the state transferred marketing duties from the Hawai'i Visitors & Convention Bureau to convention center operator SMG in 2003, said Marsha Wienert, Gov. Linda Lingle's tourism liaison.

"They did it quickly, but still we missed out on some potential opportunities," she said, adding that there was also a national downturn in corporate and convention travel. "And so both of those factors have led us into an uncertain couple of years as we move forward. I will say from the convention center's point of view, they have done a very good job in short-term business.

"I'm pretty comfortable, really, that they have looked at everything right now and have put together some strategies to address everything. And then only time will tell."

The state has budgeted about $46.7 million to cover convention center expenses in the fiscal year started July 1. That includes $12.1 million for operating expenses, $6 million for direct sales and marketing, $2 million for building repair and maintenance, $26.4 million in debt service and other costs, according to the Hawai'i Tourism Authority.

The center is expected to receive operating revenue of $8.6 million, as well as about $31 million of the hotel room tax revenues.

The center is projected to generate an estimated $300 million in visitor spending and $25 million in general tax revenues this calendar year.

Visitor spending generated by the convention center in the 2003 calendar year is estimated at $361 million with general tax revenues estimated at $30.5 million.

Officials pointed to a number of developments and initiatives, including efforts to draw business from attendees of the upcoming Professional Convention Management Association convention and the National Coalition of Black Meeting Planners event, both of which are held at the convention center.

SMG has offered free rent to PCMA delegates to Hawai'i who book an event at the center between 2005 and 2010, which Davis said created "21 very strong tentatives."

Tanaka said officials are also working with about 200 "ambassadors" — members of an association or organization who are recruited to help bring clients to the center.

At the same time, more convention center space is coming on the market across the country, giving Hawai'i steeper competition.

"There's 7 million square feet of new exhibit space coming on line in the next four years," Davis said. "Do you know what that means? That's the equivalent of 35 Hawai'i Convention Centers. All state of the art, all modern, all delivering world class service, to oftentimes our same targeted marketplace. We've got to be quicker in the market, we've got to be more creative."

Convention center officials will be meeting with the Hawai'i Tourism Authority this month to discuss their marketing plan and initiatives.

"We're just at a stage now where we're digging into the situation," said HTA marketing director Frank Haas. "We need to figure out exactly what the circumstances are and how to respond to it, because more marketing money may or may not be needed."

"It's a very competitive marketplace out there, there may be other things that we can do, we may just redirect some of the stuff that we're already doing, we may find that we don't have enough hotel capacity to do more than what we're doing now. I think the jury is out on exactly what the situation is and how to respond to it," Haas said.

"The big issue is trying to manage everybody's expectations on what the convention center is meant to do and is doing. ... We'd like to get everybody on the same page."

Reach Lynda Arakawa at larakawa@honoluluadvertiser.com or at 535-2470.