A City's Best Boast: My Convention Hall's Bigger
ATLANTA — The Georgia World Congress Center is a concrete-and-glass behemoth - roughly the size of an 18-story skyscraper laid flat.
Yet America's second-largest convention center is apparently not large enough. Georgia's governor will set aside $10.5 million to expand the center when he introduces his budget next week.
And Gov. Zell Miller is in good company. The largest convention center in the US, McCormick Place in Chicago, plans to add 615,000 square feet by 2006. The same thing is happening in Las Vegas, Los Angeles, New Orleans, you name it. Eight of the 10 largest convention centers in the country plan to become even bigger in the next decade.
It's a phenomenon that's largely the result of a booming economy, but it also reveals an all-out race for the convention-center market, where cities with the space, infrastructure, and amenities are far out-pacing their less-equipped competitors.
For the winners, the convention-center business means big bucks. Some cities rake in as much as a billion dollars a year from shows, when money attendees spend on hotels, restaurants, and rental cars is considered.
But this new shakeout also means top-tier convention cities will be even more susceptible to the demands of their largest clients.
Convention centers could begin the seemingly endless cycle that sports stadiums are now in, where after 10 years, sports teams threaten to leave town if they don't get a newer, bigger stadium. For convention centers, it will be trade shows like the computer industry's Comdex or the sports Super Show that move on if their demands are not met.
"I'm sure there's an awful lot of [clients] pitting one center against another," says Doyle Hyett, chairman of HyettPalma, an Alexandria, Va., firm specializing in city revitalization. "It's like one-upmanship. If one city does it, others say, 'We've got to do it to stay competitive.' "
Cities are willing to fork over millions of dollars to stay in the game because the industry is just too good to pass up. For one thing, conventions are a clean industry - meetings don't pump pollutants into the air. Also, the money convention centers bring in spreads fairly evenly throughout a city's economy. Mainly, though, convention centers are popular because of the giant profits they generate. One blockbuster trade show can bring in 20,000 people, who each spend an average of $1,000, says Darlene Gudea, publisher and editor of the industry newsletter, Tradeshow Week. That's $20 million injected into a city's economy in one week.
Big shows, bigger demands
Not every city can hitch itself to this cash cow, however. As the convention-center industry has matured, it has clearly identified what it wants from a city. More than a fancy center, a place must offer easy airport access, an abundance of hotels, a large regional population to draw attendees from, and some unique qualities as a destination.
Orlando, Fla., for instance, is a big draw because of Disney World and other theme parks - even though it is not a major airport hub. Its convention center has grown the fastest of any in the nation in the past eight years.
Cities that attract conventions are not likely to see a slowdown anytime soon. With businesses turning out hefty profits and unemployment at an all-time low, the bread-and-butter of convention centers - trade shows - is growing more rapidly than at any time in the past decade.
New industries, like the Internet and Web services, are entering the trade-show industry at lightning speed. (Internet trade shows grew 1,000 percent last year.) And more-established industries are spending more on trade shows - creating bigger shows and requiring elite convention centers to grow with them.
Even if the economy slows, experts say trade shows aren't likely to lose ground, which means the millions of square feet being added to centers nationwide should stay in demand.
What experts can't predict is when the build-up will slow down. "There doesn't seem to be any limitation to how much convention space the market can absorb," says David Petersen of accounting firm Price Waterhouse.