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Chicago Losing Ground in Convention Battle; Drops to No. 3
 in the National Ranking for the First Time

By Kathy Bergen, Chicago Tribune
Knight Ridder/Tribune Business News

April 27, 2006 - Chicago, which lost its title as trade show king to Las Vegas in the mid-1990s, suffered a fresh indignity Wednesday when it dropped to No. 3 in the national ranking for the first time, behind Orlando.

The city hosted 20 of the nation's 200 largest trade shows last year, six fewer than Orlando and 24 fewer than Las Vegas, which set a record, according to Tradeshow Week magazine, whose annual ranking is closely watched as a barometer of industry trends.

The economic impact of hosting conventions is significant. The biggest shows draw 70,000 or more people, filling Chicago's hotel rooms and restaurants, and generating as much as $100 million in spending over the course of a few days.

Last year was the first time Chicago came in third in both the number of big shows hosted and the amount of exhibit space used at those shows since 1992, the year the trade journal started tracking exhibit space. "Chicago was the top city for many, many years, and it's still a top city, but over time, the competitive landscape has changed," said Adam Schaffer, publisher of the trade journal.

Chicago's traditional attraction to conventioneers and exhibitors has been its central location, massive McCormick Place exhibition space and big-city hotels, restaurants, shopping and museums. These lures were even enough to make many overlook the sometimes miserable weather.

But Sun Belt playgrounds Las Vegas and Orlando each have at least doubled their exhibition space in recent years, and have marketed their spaces aggressively to trade shows seeking to revitalize themselves as the nation pulled out of the post-Sept. 11 downturn.

They offer attractions Chicago "simply doesn't have," Schaffer said. "In Orlando, the theme parks continue to be a big draw, they simply do," he said.

And in Las Vegas, which has three major exhibition centers and 130,000 hotel rooms, "the Sin City stigma is largely gone," he said. "Vegas has become a world-class city--you can see great shows, have a great dinner, do a lot of things that are a lot of fun."

No. 4 New York also poses an increasing competitive threat because it has proposed doubling the size of its Javits Center, which has less than half the exhibit space of McCormick.

Chicago convention officials said it's a mistake to judge the performance of the city based on a single measurement in a single year.

"It's too narrow of a measurement," said Leticia Peralta Davis, chief executive officer of the Metropolitan Pier and Exposition Authority, which owns and operates McCormick Place. "It's a snapshot of a single aspect of our business.

"We are in the middle of a banner year, and records continue to be broken by a substantial number of our customers, in terms of attendance, business conducted and exhibits being sold," she said.

Chicago trade show bookings run in cycles, generally with greater numbers of shows rotating into the city in even-numbered years, officials noted.

For 2006, "we expect to be back in second, if not first," said Tim Roby, the new president of the Chicago Convention and Tourism Bureau, which books business into McCormick Place.

Chicago "very easily could flip back to No. 2," acknowledged Schaffer, of Tradeshow Week. Chicago trade shows "continue to drive a lot of revenue for the region ... and Chicago should not be panicked, by any means."

But Las Vegas pretty much has a lock on the top spot for the foreseeable future.

"You almost have to take Vegas out of the equation," he said. "It's almost a nation unto itself."

Las Vegas grabbed 34 percent of the exhibit space generated by the top 200 shows in 2005, compared with a 16.4 percent share in 1992. In contrast, Chicago had a 9.6 percent share last year, compared with 17.5 percent in 1992.

Over the years, Chicago has seen a number of significant shows migrate to Las Vegas, most recently the 2007 convention of the National Association of Realtors, and the National Hardware Show.

The ranking comes at a difficult juncture for the city. The convention bureau has been struggling with numerous staff departures and poor morale, and Roby faces a rebuilding challenge.

Chicago also continues to be viewed as a city where labor union work rules make it more difficult and expensive to operate exhibit space than in states like Nevada and Florida.

To some extent, that notion is outdated, given a new labor pact hammered out last year, said Schaffer.

"Trade shows are booked many years out, so it will take a little time for the benefit of the accords to have an impact on bookings," said Schaffer.

Still, a number of trade shows feel the labor concessions did not go far enough.

Some mainstays, including the National Restaurant Association show, continue to weigh moves to Las Vegas or Orlando.

The trade show business, like the travel business, took a dive after 9/11. Fear of travel coupled with the economic downturn led companies to trim exhibit budgets. Advances in technology made it easier to display products in smaller booths and with fewer staff.

"With plasma screens and direct Internet connections to the office, companies don't need to haul in lots of equipment," noted Ted Mandigo, an Elmhurst-based hotel consultant who follows the trade show industry.

With its $882 million West Building addition due to open in July 2007, Chicago will be poised to take advantage of the shift, Mandigo said.

"There will be more technology built in, and trade show people will find that attractive," he said. And the spaces will be more finished and formal, a better fit for smaller meetings.

The city already has booked 40 events into the building, which is designed to attract meetings with associated exhibits rather than big trade shows, Roby said.

Chicago no longer can rely on the sheer size of its facility to attract shows, noted Heywood Sanders, professor of public administration at the University of Texas at San Antonio.

"It can't change the market environment, but it's important to begin to ask, `Are there niches and appeals that Chicago is in a position to capitalize on?'" he said.

And Schaffer advises the city to sell itself on its own strengths.

"It's a great location, with tremendous air (connections)," he said. "It's considered by many to be the best restaurant city in the U.S. It has a lot of culture and shopping, a great convention center and good hotels. Chicago shouldn't compare itself to Orlando or Vegas."

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Copyright (c) 2006, Chicago Tribune

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