Michael Hughes is doing a presentation on Industry Outlook Part 1: How Today's Challenges have changed Convention Centers. Michael is Managing Director, Research & Consulting, Red 7 Media in Scottsdale, AZ.
The building boom in convention centers have not slowed in the last three years because of the economic downturn but hotel building has been affected. Demand is driving the convention center new building or expansion in the States and internationally. In some cases, it is driven by aging facilities that require upgrades.
Most important facility design and functionality themes and amenities over next 5 years:
wireless internet service
higher quality, higher tech meeting space
environmental conditions (a/c, lighting)
multi function space for various event types
unique overall ambience
better signage, wayfinding
high quality exhibition space
Secondary themes: high food quality, divisible lecture halls, better transportation
Are client and use changes permanent from this current economic downturn? 66% said no and 34% said yes...of those that said no, most see a return to more normal numbers in 1-2 years.
How Host Cities are Selected: Hotel room prices and quality is most important with convention center size a close second. Airport capacity/airfares is now scoring higher than ever before. For me, the hotel attrition policies towards the end
How Venues Are Selected: Costs lead the way for both the attendees/exhibitors and the cost of producing the event. Meeting room sizes
How the Recession has Changed Site Selection: Booking value locationws with lower cost of venue/hotels ranks highest. Michael's research shows that most are not booking out shorter term...which is opposite of what was just discussed in the Small Facilities RoundTable that found a large majority of association/corporate/government business is booking shorter term and holding on to contracts longer as a negotiating tool.
62% of event producers believe that the changes are permanent in current economic downturn while only 38% say they are not. Of those 38%, most believe that this trend will last 2-3 years.
Michael reports that here is a DISCONNECT. 66% of Event Managers believe that the downturn is not permanent while 62% of Event producers believe that it is permanent.
Expected Growth in 2011 -- Revenues 2.3%; Event 2.4% and Attendance 2.9%.
Questions/Answers: Did the research on Site Selection consider destination impact? Not specifically but the research shows perhaps the trend towards larger cities because of how high the airport information scored. Another comment from the audience talked about the pedigree of some of the groups...that some cannot afford first tier cities.
A question about the research findings on expansion...are the current expansions smaller in nature...most architects would agree that there isn't much growth in building.
Have you talked to anyone about the funding side? Taxpayers aren't willing to pay, state and federal dollars are drying up, cities are going broke. Not yet, a topic for next year.
For those of you attending ICCC, Michael's presentation is on the flash drive sponsored by PROjection Presentation Technology.