ANAHEIM’S MAKEOVER BEGINS : Anaheim Just One of Many Seeking Increased Business
An all-out space race has erupted at convention centers around the country, as municipalities grab for an ever-greater share of the lucrative, fast-growing, $83-billion exhibition and meeting industry.
Expansions are planned, underway or recently completed in Chicago, Boston, St. Louis, Orlando, New Orleans, Phoenix, San Diego and San Francisco, to name a few.
And on Tuesday, Anaheim joined the fray, unveiling architectural plans for the first phase of a 20-year expansion that will double the size of the 985,000-square-foot center.
Experts say the building boom is being fueled by continued growth in established national trade shows, as well as a proliferation of new conventions in emerging industries such as multimedia.
Not to mention that it’s profitable.
According to estimates by the International Assn. of Convention and Visitors Bureaus, a modest-sized four-day national convention with 5,000 attendees and 300 exhibitors contributes more than $5.6 million in direct spending to the host city.
While there is speculation that too much space is being added too fast, particularly in second-tier convention cities, industry observers say the biggest risk for major players like Anaheim is to allow lucrative trade shows to outgrow their facilities and move elsewhere.
“If you don’t keep pace with the growth of your customers’ shows, you force them to take their business to a larger facility that can accommodate more exhibits and visitors,” said Peter Shure, editor of Convene, a publication of the Professional Convention Management Assn. “The convention business is like any other. It’s always more difficult to recapture lost business than to keep existing customers happy.”
It seems something of a paradox that conventions, those old-fashioned business meet-and-greets, are flourishing at a time when teleconferencing, the Internet and other technologies are linking people electronically.
An estimated 25,000 conventions, expos and trade shows were held in the United States last year. The industry has been expanding by 6% to 8% annually since the 1970s and is projected to continue at that pace well into the next century, according to Steve Hacker, president of the International Assn. for Exposition Management in Dallas.
Hacker says electronic communication is no substitute for the face-to-face interaction provided by trade shows and conventions. In fact, he says, the frantic pace of the modern business world has converted the trade show into a rare opportunity for time-pressed managers to network with clients and other industry movers and shakers.
“There is no way to replace the opportunity to stand belly to belly with your clients and competitors,” Hacker said. “Trade shows save time and expense because they provide a unique opportunity for business people to do comparison shopping and make buying decisions under one roof.”
Indeed, the nation’s largest trade shows and conventions are only getting bigger, with companies clamoring to be a part of what are perceived as the hottest events of the year in some industries. More than 2,300 high-tech firms, for example, attended last fall’s COMDEX, the nation’s largest computer trade show, which fills every available square foot of convention space in Las Vegas each November. Likewise, there is a waiting list to exhibit at Discover America International Pow Wow, North America’s largest travel industry exposition, which was held in June at the Los Angeles Convention Center.
While established shows are growing larger, emerging industries are also spawning new exhibitions, such as the fast-growing Electronic Entertainment Expo, a showcase for multimedia and interactive technology that debuted in 1995.
Also driving the need for more convention space is the growing size and sophistication of exhibits themselves. Some trade show displays have come to look more like theme park rides than the information booths of yore.
“Exhibitors are no longer content with the old 10-by-10-foot booth,” said Greg Smith, general manager of Anaheim Convention Center. “We’re seeing more exotic displays that require more space.”
But experts caution that the sheer size of a city’s convention center won’t guarantee it access to the nation’s most lucrative expos and trade shows. William Sell, show director for COMDEX, says meeting planners look at a host of factors when choosing a site, including a city’s transportation, airport access, quantity of hotel rooms and quality of surrounding attractions.
What’s more, Sell said, COMDEX has grown so large and must book so far in advance that the show is virtually locked into Las Vegas, which has nearly 100,000 hotel rooms available for the COMDEX crowd. Sell says many of the nation’s largest trade shows have the same constraints, and that even after its expansion, Anaheim, with only 16,000 hotel rooms, will not be in a position to compete for that business.
“Don’t build it and expect us to come,” Sell said. “This isn’t Field of Dreams.”
But Smith says the first phase of the Anaheim expansion, which will add 100,000 square feet of exhibition space, isn’t targeted to mega trade shows. By constructing another 100,000 square feet of meeting space and a 40,000-square-foot ballroom, the city hopes to attract more meeting business from large professional associations and gain the ability to hold several smaller functions at once.
Industry experts say that’s a smart strategy that will help the Anaheim Convention Center appeal to a bigger cross-section of the convention market. At present, the facility contains very few meeting rooms and primarily hosts trade shows and exhibitions, rather than conferences and meetings. Likewise, the ability to book multiple functions should provide a steadier flow of customers to surrounding hotels, but only if Anaheim succeeds in attracting out-of-town conventions rather than local events.
“The reason convention centers exist is to fill hotel rooms, generate economic activity and attract new dollars from the outside,” Shure said. “Is there enough room-generating business to fill all this convention space being added around the country? That’s the tough question.”
Regional competition isn’t getting any easier either. San Diego and San Francisco, fierce rivals to Anaheim for West Coast convention business, likewise are planning major expansions.
Julie Burford, assistant general manager of San Francisco’s Moscone Center, says Anaheim’s strategy to pursue more professional meeting business, particularly in the growing medical, education and scientific fields, puts it in direct competition with her facility.
“They want my market, no question,” Burford said. “And I’m going to fight like hell not to let them get it.”
Although the Anaheim Convention Center will be prospecting for new business, city officials are counting on the expansion to help them retain existing trade shows that are growing too large for the space.
January’s National Assn. of Music Merchants trade show stretched the center to the limit, as exhibitors crammed themselves into storage rooms and other areas not normally used as exhibit space. The music group recently told Anaheim convention officials that it would move to a larger hall in Los Angeles in 1997.
Los Angeles itself received a blow in May when the Electronic Entertainment Expo announced it will relocate to Atlanta because it has outgrown the Los Angeles Convention Center. Smith says Anaheim is hoping to head off such defections with an expanded center.
Some meeting planners say Anaheim’s 15% hotel occupancy tax, the third-highest in the nation, could hurt the city’s ability to compete for convention business. Others say the expanding Disneyland Resort, including the upcoming Disney’s California Adventure theme park and entertainment district, will help offset that disadvantage and enhance Anaheim’s standing as a popular convention destination.
“The most successful convention expansions have occurred in cities that have a good balance between tourists and business visitors,” Hacker said. “It creates a synergy.”
