Thomas Molitor
I’ve attended hundreds of trade shows and conventions in my 25 years of corporate marketing – Comdex (once the biggest computer show in the world and now defunct) in Las Vegas, Natural Foods Expo in Anaheim (the biggest in the world), the Personal Care and Beauty Products Show at the Jacob Javits Convention Center in New York, the CTIA Wireless Show (again in Las Vegas), and the Organic Food Association show held each year at the humongous McCormick Place in Chicago.
And in all those years, without exception, I have never heard a straight answer from a tradeshow promoter after asking him or her what that year’s attendance and exhibitor participation numbers looked like: “This is a record year for attendance!!!” they always shout back. “You ought to book a booth now for next year as we are already 80 percent sold out!”
They are full of the word that rhymes with mitt.
The reason I ask about exhibitor participation rates is because I always notice the unsold space on the floor when I’m at a show. You can always tell the space the promoters haven’t sold because the empty spaces have been replaced by cozy chairs and tables at which weary show attendees can cool their heels and rest awhile and enjoy a momentary respite from the miked salespeople barking their pitches from their amplified booths. The show promoters don’t provide these spaces for attendees out of the goodness of their hearts.
The rosy sales figures promoters give belie reality, however. According to the same Brookings Institution report supposedly (hopefully) read by Mayor Berry, “the current overall attendance rate at the 200 largest tradeshow events languishes at 1993 levels.”
And yet, the Albuquerque Convention and Visitors Bureau is asking the business community to show its support for the proposed Downtown Event Center & Hotel Complex project. Though many business leaders remain undecided about the proposed $400 million downtown event center and headquarters hotel project, one hotel mogul has come out strongly against it recently in the Journal.
Jim Long, owner of six hotels in the state, as well as the Albuquerque Plaza building downtown, calls the project an “economic albatross for Albuquerque.” Mr. Long offers a broader perspective at looking at the proposal, in my opinion, as he says, “The issue is not the Convention & Visitors Bureau, and the issue is not the lack of rooms, and the issue is not the lack of convention space – the issue is the lack of desirability of downtown.”
In other words, come night time, would show exhibitors and attendees rather party in Las Vegas, San Francisco, Chicago – or in Albuquerque?
Over-built and under-attended
The Brookings Institute study was pretty critical on the idea of cities investing in convention centers as a linchpin of their economic development strategy.
The report stated the convention center business is over-built and under-attended. And this is a report that was conducted in 2005, three years before the financial meltdown in September 2008. You think attendance has picked up these past three years? I think not. In fact, I know not.
Mayor Berry says he is “non-committal on the project at this time.” He says he is in no hurry to rush into making a decision on whether to move forward on spending $400 million and raising the gross receipts tax at least another one-eight of a percent to pay for this project.
I think neutral is a good gear for Mayor Berry to put this project in at this time, a time in which the city is facing revenue shortfalls deeper than any one at City Hall has the stomach to put down on paper.
City Hall still has nearly $78 million in outstanding debt related to its convention center – even though the last major expansion was 20 years ago – as a result of refinancing through new bond issues, reconstruction of Civic Plaza in the 1990s, and renovation and expansion of the center itself.
At the current rate, the city won’t pay off the convention center debt completely for another 27 years, until 2037.
The future of trade shows and convention centers
I wonder about the future of trade shows and convention events in general, given the disruption of traditional models by digital displacement. It’s clearly quite fun to visit London or Las Vegas or New York and schmooze with your peers at these events, but are the events worth the investment for exhibitors and attendees both? These shows are very expensive for a company to participate in and for an attendee to attend.
I emailed futurist Michael Moon, president of Gistics and editor in chief of the Journal of Digital Asset Management, and asked him where he saw the future of trades hows and convention centers as a business model was headed. His reply:
1. Pervasive use of the Web has disrupted two of three fundamentals of tradeshows: webinars replaced in-person demo and product microsites replaced (mostly) the need for distributing printed collateral in person. The social and personal engagement fundamental becomes heightened.
2. The basic underpinnings of business-to-business buying and collaborative decision-making processes has changed to the extent that tradeshows have become marginalized.
3. The basic nature of work in a Networked Economy has changed, making time away from offices and workspaces more difficult and painful, time away / offline often becomes a liability and problem source. As a result, many heretofore conference delegates must make a more formal and factual business case for attending.
4. This all suggests that we will see a demand for shorter, regional one-day briefings and lower demand for larger, centralized multi-day confabs.
I would say Mr. Moon’s assessment doesn’t bode well for a business community and its city officials to say yes to future investment in convention center/tradeshow/hotel infrastructure. Are the tradeshow exhibitor, the tradeshow attendee, the entertainment event ticket buyer getting their bang for their buck today, let alone in the future, given Mr. Moon’s prognostications?
Personally, I think not. And something tells me that if the mayor goes ahead and funds this project the city taxpayers won’t get their investment bang for their buck, either.
Molitor is an adjunct scholar at the Rio Grande Foundation and a regular columnist for this site. You can reach Molitor at tgmolitor@comcast.net.
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