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In Last few Months 14 Major Conventions Have Canceled Plans for Pennsylvania Convention
Center; Most Groups Cite Labor Costs
as Reason 
By Paul D. Davies, Philadelphia Daily News
Knight Ridder/Tribune Business News 

Jan. 9--The fallout is starting to emerge from the ongoing labor troubles and failed expansion efforts at the Pennsylvania Convention Center, and it doesn't look good. 

Since the fall, 14 major conventions have canceled plans or are no longer likely to come to the Convention Center, according to a document obtained by the Daily News. 

And tourism officials are even more concerned about the undetermined number of conventions and shows not even considering Philadelphia because of the unresolved labor problems. 

Losing 14 conventions is staggering enough. They would have brought $162 million in delegate spending. For hotel operators, the lost business equals 305,900 vacant-room nights, according to the document prepared by the Philadelphia Convention and Visitors Bureau. 

The loss of business is due mainly to the ongoing labor troubles and high costs associated with the outmoded union work rules. 

Nine conventions cited labor costs as the reason for canceling. Two canceled over failed efforts to expand the center, and two others cited both labor issues and expansion problems. The 14th, the College of OBGYN, canceled in protest over malpractice rates. 

The Convention Center has been mired in labor troubles -- including fistfights, picketing and featherbedding -- the last several years. 

The labor problems came to a head this summer as Convention Center supporters lobbied the state for half of the estimated $464 million for an expansion. 

The Convention Center board and Mayor Street worked through the summer and fall to resolve the labor troubles and get the state funding. When both efforts failed, the 14 conventions quickly bailed out. 

In June, six large conventions were committed to Philadelphia. Eight others said they were very likely to come. By October -- after the expansion efforts and labor negotiations collapsed -- 11 of the conventions had canceled and three were looking elsewhere. 

Just this week, one of the largest conventions -- made up of eye-care professionals -- canceled plans to meet in Philadelphia in 2008 and in 2011. 

The eye-care organization cited the Convention Center's high labor costs as the reason for not coming. The two conventions were projected to bring $20 million in delegate spending to the city and result in the booking of 40,000 room nights. 

Tom Muldoon, head of the Philadelphia Convention and Visitors Bureau, said losing the 14 conventions was only part of the problem. 

"The bigger issue is how many conventions are not even talking to us," Muldoon said. "Who knows how many we have lost because people won't even think of coming here until these problems are resolved." 

Muldoon's office is in charge of bringing conventions to Philadelphia. Everyone in the industry is aware of the city's problems and has the same three questions: Do you have a labor deal? 

Do you have expansion? Have you reduced the costs? 

"Imagine trying to sell that," Muldoon said. 

The $523 million Convention Center had its busiest year last year since it opened in 1993. The center is the cornerstone of Philadelphia's burgeoning tourist-based economy. 

Now, the lost business threatens to have a ripple effect on that economy. For retailers and restaurant owners, the cancellations mean thousands of conventioneers will not be shopping, eating and drinking in Philadelphia. The lost conventions also mean that millions of dollars won't be pouring into city tax coffers. 

At least one hotel has already laid off some workers due to the economic slowdown and drop in business travel. The hotel industry, which employs about 7,000 workers, has yet to feel the real impact of the lost conventions since most events are scheduled years in advance. 

"It's pretty dismal now, but it gets real scary in a few years when you look at the chunk of business that has been lost," said J. Mickey Rowley, executive director of the Greater Philadelphia Hotel Association. 

-----To see more of the Philadelphia Daily News, or to subscribe to the newspaper, go to http://www.philly.com 

(c) 2003. Distributed by Knight Ridder/Tribune Business News. 


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