Cancellations Pummel Convention Industry

Despite hopes for a quick turnaround, the U.S. convention industry continues to suffer costly cancellations of business meetings and conferences in the wake of the Sept. 11 terrorist attacks.

Trade groups project convention industry losses for September and early October at up to $1.5 billion. Some of those losses won’t be recovered, as many conferences are being canceled outright and not rescheduled.

Among those expected to be hardest hit are hotels. Even if bookings are made up later, rooms are perishable commodities that are simply lost on the nights they aren’t filled.

“They are like airline seats. [If they’re not used,] they’re gone,” said Mary Power, president of the Convention Industry Council.

Some industry leaders contend the trend won’t last. Ed Griffin, president of Meeting Professionals International, a Dallas-based trade group, blamed the rash of cancellations on the uncertainty surrounding airline schedules after the shutdown of the nation’s airports.

“Literally every meeting planner without exception said the reasons for their cancellations have been logistical and tactical . . . as opposed to the fear factor,” Griffin said.

Yet cancellations are piling up, despite the fact that airlines have resumed most of their flights.

The American Petroleum Institute on Friday scratched its annual meeting, set for Oct. 14-16 at the Ritz-Carlton Huntington Hotel and Spa in Pasadena. About 200 oil executives and suppliers were expected, according to institute spokeswoman Susan Hahn.

” They just feel like it’s more prudent right now to be at home running their companies,” Hahn said. “There are just too many uncertainties in the near term.”

In Las Vegas, convention authorities say about 250 events have been canceled or postponed--an estimated $100-million hit. The flurry of cancellations reached the point that the Las Vegas Convention and Visitors Authority issued a news release last week saying it still had a convention business. “Contrary to erroneous reports, not all conventions scheduled to meet in Las Vegas during September and October have been canceled,” the release said.

Nationally, 75 major trade shows--those exceeding 5,000 square feet of exhibition space--were scheduled within three weeks after Sept. 11, according to Tradeshow Week magazine.

About half were canceled, and 50% of those aren’t likely to reschedule--costing the host cities a combined $100 million in lost delegate spending, according to Michael Hughes, the magazine’s director of research.

Hughes said the slowing economy was already taking a toll on the trade show business, with attendees and exhibitors both down 1% in the first half of the year compared with 2000. Now, he anticipates overall attendance to be 10% lower than last year.

With corporate travel budgets tightening and the economy probably heading into recession, he said, the biggest winners probably will be large, established trade shows recognized as must-attend events for their industries. He said the biggest losers probably will be second- and third-tier events, as well as technology seminars and conferences, which took a dive when the tech bubble burst.

“The market is going to gravitate toward the shows with the most value,” Hughes said. “The No. 2 and No. 3 players are at risk.”

Some conferences have been postponed because of grief. The Security Traders Assn., which was based in the World Trade Center, lost 70 of its 7,000 members in the terrorist attacks. Its meeting, initially slated for Oct. 3-7 at the Boca Raton Resort & Club in Florida, will be held in November.

“You have to take into consideration what’s going on,” said Lee Korins, president and chief executive of the Security Traders Assn. “What’s going on is a tremendous amount of grieving and mourning.”

Others cite pressing national issues. The American Hospital Assn. scrapped a lobbying trip to Washington by 450 hospital executives next month. “Given that Congress is rightly focused on national security matters and emergency preparedness, we decided to cancel the meeting,” association spokeswoman Alicia Mitchell said. Also, she said, 85% of the attendees were scheduled to arrive through Reagan National Airport, which has been closed indefinitely.

In place of the trip, they will have a series of conference calls.

Internet World, a gathering of 35,000 people, initially planned to keep its Oct. 1-5 schedule for its fall show at the Jacob Javits Convention Center in New York. On reflection, though, planners decided to delay the show until December.

“As the days continued to pass, the enormity of what happened resonated in our mind,” said Courtney Muller, vice president of domestic Internet World events. “We just felt it was much, much too soon to ask people to come to Javits.” About 80% of the initial program will remain intact, Muller said, but the new agenda will address disaster recovery, storage and rebuilding technological infrastructure.

The U.S. meetings industry is a $96.4-billion annual business, with nearly 100 million people flocking to more than 1.2 million conferences, seminars, corporate meetings trade shows and conventions, according to the McLean, Va.-based Convention Industry Council.

The council estimated revenue losses for September and October at $1 billion, while the Meeting Professionals International placed losses at about $1.5 billion.

Conventions are sometimes booked years in advance, and planning can take months. The National Broadcast Assn. for Community Affairs reserved the Universal Sheraton in Los Angeles 18 months ago.

But the group, whose members include community affairs professionals from radio, TV and cable, canceled its Oct. 16-20 meeting and won’t reschedule until next year.

President David Ysais said members are heavily involved in fund-raising and blood drives in response to the tragedies.

“It’s a big loss,” said Ysais, director of community services and editorials for KNX Radio in Los Angeles. “This is their one opportunity to gather around with folks of their same discipline.”

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Ornstein reported from New York, and Dickerson from Los Angeles. Greg Johnson also contributed to this report.