The meetings and convention industry is an important driver of the national economy for a lot of countries. The Convention Industry Council estimates that for the U.S. meetings industry expenditures grew to $280.4 billion in direct spending in 2012 which is an increase of 6.4% compared to 2009. Employment increased by 8.3% to 1.78 million people working in the meetings industry in 2012.
While these numbers illustrate the economic significance of the meetings and events industry, there are several challenges and trends that force convention centers and venues in particular to adapt their business model so they are not left behind.
Challenges and trends
Convention centers are faced with stronger competition than in past years because of an increased number of venues and meeting space. In addition, as the event industry is part of an ongoing globalization process, the traditional marketplace is expanding to include international competition. This is one of the trends that Jeff Hurt published in an article in which he summarized the findings of a panel discussion Hurt moderated at the Convention Sales Professional International.
A further challenge for convention centers identified by Hurt is that meeting professionals are asking for more space for less money. This is because meeting planners are required to be more innovative in the way they produce events, which often requires more space than traditionally has been requested and accounted for in budgets. Further challenges include a trend towards strategic meeting management, the need for meeting planners to be cost efficient and increasingly conscious of the value of reporting on return on investment (ROI).
Along with additional pressure to exercise sustainable practices in the event industry as well as technology that moves forward at a fast pace, convention centers are confronted with a multitude of challenges. What can venues do to remain competitively positioned in order to generate the desired financial performance and economic impact for their community?
How to best find, create and win business
Achieving a competitive advantage is influenced by different factors: facility design and technology, location, marketing and promotion efforts, etc. Some of those can actively be managed by a convention center, some of them are harder to have an impact on.
There is one fact though that holds true for most venues: industry growth will depend on new demand. Or as Johnna Boxley, CFE and GM of the Spokane Convention Center at the 2013 International Convention Center Conference (ICCC) puts it, “Instead of answering phones, we are knocking on doors to book business. When the building is dark we create events to bring in guests. We have become more entrepreneurial in our vision and actions.”
Strategies range from collecting and interpreting data, developing new events, and marketing activities to create innovative new revenue streams. The shift to attracting “non-traditional” events is evident. According to insight provided by PricewaterhouseCoopers at the 2013 ICCC, over the past 5 years there has been a 42% increase in space utilization from non-traditional events like weddings, banquets, and holiday events.
Would you like to learn more about how to find, create, and win business for your venue? Check out this blog: Webinar Recap: Winning Strategies for “Stand-Out Chameleon” Convention Centers.