Cities Find That Conventions Pay During Recession

UNLIKE much of American industry, the business of putting on conventions and trade shows has barely been dented by the recession.

American companies spend about $57 billion annually on conventions and trade shows. As the industry prepares for its annual peak months, May and June, an informal survey of convention executives in major cities found that trade-show attendance will likely rise, with slightly higher revenues this year than last.

Trade shows make up two-thirds of industry revenues, while the other third flows from conventions of corporations and professional associations. Attendance at corporate and professional meetings is expected to be flat or slightly down, though revenues will likely rise.

"We're holding our own, and in some cases our groups are exceeding attendance from the years past," says Janice Saragoni, director of marketing at the John B. Hynes Veterans Memorial Convention Center in Boston. Last month, conventions in Boston had record-breaking attendances, Ms. Saragoni says.

In Chicago last year, Print '91 Show, sponsored by Graphic Arts Show Company Inc., also attracted record numbers: 88,117 people, up from 85,778 at the last Print show in 1985, according to Gerald Sanderson, director of sales at the Chicago Convention and Tourism Bureau. Other convention centers in Las Vegas, San Francisco, and Washington, D.C., report similar increases.

Industry observers say that these meetings are booked at least three to eight years in advance, which helps make the industry relatively recession-proof.

"We work in such a long-term time frame that a short-term recession doesn't really affect our convention business," says Helen Chang of the San Francisco Convention and Visitors Bureau. More than 60 percent of available meeting dates for the San Francisco Convention Center are booked to the year 2010, Ms. Chang says.

More than 82 million delegates attended meetings last year, a 3 percent drop in convention attendance from the year before, according to the International Association of Convention & Visitor Bureaus (IACVB). The number of meetings held across 349 US cities was nearly 268,000, a 24 percent drop from 1990.

The economic impact of these meetings goes far beyond the convention hall. Factoring in hotel, air travel, food, and convention spending, each convention delegate spent an average $688 per meeting in 1991, up from $646 in 1990.

The meetings generated an estimated $56.6 billion in industry revenue in 1991, up from $54.6 billion in 1990, and 44.5 billion in 1989.

The big moneymakers are trade shows, which number about 4,000 a year in the United States, according to Scott Goldman, editor and publisher of Exhibit Marketing Magazine, a business magazine for trade-show exhibitors.

The IACVB expects the number of meetings to remain relatively flat in 1992, and projects 263,000 meetings in 1993.

In Boston last year, about 495,000 people visited the Hynes Convention Center, down from 525,000 in 1990. Despite the decline in attendance, Saragoni says that convention business for professional groups such as medical, educational, and high-tech associations, is doing well.

Boston competes with other convention cities such as Baltimore, Chicago, New York, and San Francisco to host professional association conventions. But this competition is less intense than might be expected, because groups tend to rotate meeting places every six to seven years, Saragoni notes.

The recession has taken a toll on corporate meetings, in which a company brings its own staff to a specific site.

"There is less food-and-beverage type of entertaining, ... less travel, more conference calls, and less convening," says Dusty Rhodes, president of Conventures Inc., a corporate-meeting planner in Boston. Ms. Rhodes also sees a drastic cutback in lavish corporate parties. The main reason, she says, is that companies do not want to be perceived as extravagant.

Don Garrity, president of Production Associates in Vernon Hills, Ill., has been organizing stage settings for conventions and exhibit booths for trade shows for 27 years. He lost a lot of business during the Gulf war, he says, because of the cancellation of trade shows in the US and overseas. But business is slowly coming back, he says. Many companies remain very careful about spending money.

Currently exhibit booth space costs about $15 to $20 per square foot. A typical company spends at least $5,000 per booth in a trade show, Mr. Goldman says. Even though companies are cutting back on other marketing activities such as advertising and direct mail efforts, "they seem loathe to not appear at an important trade show," he says.

The reason, Goldman says, is that trade shows are one of the best ways to advertise a firm's products. With an exhibit at a trade show, a company can make thousands of sales contacts that the firm's field sales force would make at a much higher cost.