Convention Center Shares Growing Pains

By ESTHER SCHRADER

Nov. 9, 1997 12 AM PT

TIMES STAFF WRITER

ANAHEIM —

Two of the largest trade shows at the Anaheim Convention Center are taking their 1998 conventions elsewhere, citing concerns over massive disruption at the exhibit halls, where a $150-million expansion and renovation is underway.

The National Assn. of Music Merchants show, an annual Anaheim event for 22 years and for more than a decade the biggest-drawing convention at the center, will hold next year’s convention in Los Angeles, association officials said. The National Education Assn. has moved its next assembly to New Orleans.

“We’ve been coming to Anaheim forever, but there’s no possible way for us to stay in the Convention Center while the construction is going on,” said Kevin Johnstone, director of trade shows for the Carlsbad-based music merchants group. The association’s annual convention draws more than 60,000 people to Anaheim for up to two weeks.

“We suffer loss in square footage, there’s traffic concerns going on; primarily we can’t suffer the loss in space,” he said.

Convention Center officials say they have booked several smaller shows to fill in at least some of the gaps left by the pullout of the big shows. And there has been no overall drop in bookings at the center through 2000, when construction is expected to be completed.

But hotels where tens of thousands of convention delegates had reserved rooms and then canceled said they have been unable to refill more than half of them, costing hundreds of thousands of dollars in lost revenue.

The departure of the two conventions, which together bring more than 80,000 visitors and millions of dollars to Anaheim each year, has city officials and hoteliers fearful that the multibillion-dollar building boom in the Disneyland resort area over the next five years--of which the Convention Center project is a part--could drive more business away.

“I’ve got to tell you, I’m worried,” said Michael Krouse, director of marketing at the Doubletree Hotel Anaheim/Orange County, which he said lost more than $500,000 in revenue when the two shows bailed out. Delegates canceled about 4,500 room nights they had booked at the hotel--each at $150 a night. The hotel has been able to rebook 1,050 rooms from smaller conventions which plan to avoid the Convention Center and use the hotel for their meetings instead.

“Disneyland has no new attraction opening this year,” Krouse said. “The Light Magic parade was a fizzle. Tomorrowland won’t reopen till next year, and we’ve got construction going on everywhere. It’s a mess. I hope people don’t perceive this as a reason not to come to Anaheim.”

Ned Snavely, general manager of the 1,031-room Anaheim Marriott Hotel, had expected to nearly fill the hotel with music merchant association convention-goers. A scramble to rebook the rooms when the show relocated was partly successful, Snavely said, but “we’ll never replace the full loss of revenue with such short notice.”

Anaheim Mayor Tom Daly said city officials have long expected the Convention Center, which the city owns, would lose some business during construction.

“We are concerned, but the long-term benefits should more than compensate for the short-term losses,” Daly said. “We’re all in this together and we will survive together.”

To keep the shows coming, hotels are trying to woo visitors by offering their own facilities for meetings and Convention Center officials have promised to halt construction during some conventions. But hotel room occupancy in Anaheim is off about 10% over 1996--a drop-off industry leaders attribute to the construction.

“It’s all the same questions. They ask, ‘Jeez, is it going to be quiet enough for us? Are we going to have access to the buildings?’ ” said convention center manager Greg Smith. “We tell them ‘yes,’ and ‘yes,’ but not everyone’s going to believe you.”

Construction at the center began in August. The work will eventually increase the size of the 30-year-old center by about one-third, from 1 million to 1.4 million square feet, including a spruce-up of its dated look, more meeting rooms and larger lobby and reception areas.

A study by the Anaheim/Orange County Visitor and Convention Bureau found that without an expansion the center could lose 60% of its future business.

At the same time, Disney has begun work on a $1.4-billion theme park, and $510 million worth of street, sewer and electrical and telephone cable work is tearing up major streets and intersections, making getting to and from the Convention Center an adventure.

No one argues over whether the Convention Center renovation is a good idea. Major clients have vigorously encouraged the project for years. Word that money to complete the expansion is secured and work is underway is helping long-term bookings at the center, according to Charles Ahlers, president of the Visitor and Convention Bureau.

For the period beginning in July 1998 and ending in June 2000, 146 shows expected to draw 1,000 or more conventioneers each have been booked, according to statistics released by the Convention Center.

“Before, [convention planners] wanted to be sure it was going to happen, because everyone knew the center just wasn’t big enough anymore for some of the shows,” Ahlers said. “But now they believe us, because we’re fully funded and we’re actually moving dirt.”

For the two organizations that moved their conventions out of Anaheim, moving dirt was precisely the problem.

The National Education Assn.’s yearly assembly had been slated for next July and expected to draw more than 15,000 people. But association officials moved the convention to New Orleans after discovering that the hall they had intended to use--the Convention Center’s largest--would be under reconstruction that month.

“The hall is scheduled to be renovated, which is going to result in dust and noise and would be unconducive to our meeting, to say the least, so we had to move it,” NEA spokeswoman Kathleen Lyons said.

The expansion “will be great when it’s done, but we don’t want to be meeting in the middle of it,” Lyons said.

For the music merchants group, the decision to move from Anaheim was as much about space as about construction. The convention, which began with a tiny turnout at the Disneyland Hotel in 1975, has grown so large that its participants fill hotels all over Orange County, and its exhibits fill more space than the Anaheim Convention Center has to offer.

“If the construction wasn’t happening we would still be gone, because we’d outgrown it,” Johnstone said. “But if you cut into that space even further during construction, that just compounds the problem. It’s a common-sense move, especially when you have another place less than 50 miles away that can accommodate us.”

Convention Center officials have worked hard to keep other shows from defecting. When the California Cable Television convention takes over the exhibit halls in mid-December, for example, construction will stop completely.

Other steps include installing sound barriers around construction areas to cut down on noise, contracting shuttle buses to ferry conventioneers around work zones, and meeting weekly with area hotels, helping them sign smaller shows and meetings to fill their rooms and ballrooms while the construction continues.

“We’re not going to let anything negative happen to any of the shows here, because when you look at it, we’re really partners with all of the shows that have come in,” Smith said.

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

Conventional Wisdom

The $150-million expansion and renovation of the Anaheim Convention Center has not hurt the number of trade shows, conventions and public shows there to date. But there could be a short-term problem in 1998 because two major conventions are going elsewhere. A closer look:

*--*

Conventions/ Public Attendance trade shows Attendance shows (public shows) 1993 86 765 23 299 1994 89 787 28 310 1995 89 806 33 364 1996 86 682 42 424 1997* 99 820 48 382

*--*

* Estimate

Not Staying Inn

September hotel occupancy in Anaheim skidded more than 10% compared to last year, but average room rates rose slightly:

*--*

Occupancy Rate September 1996 79.1% $67.40 September 1997 67.8 68.54

*--*

Room Revenue

An increase in the bed tax significantly boosted the city of Anaheim’s take from that source. The revenue trend, in millions:

(Fiscal Year

1993: $32.1

1994: 33.4