March 5, 2009 - A recent decision by a newspaper industry group to ax its annual convention in Chicago is symptomatic of a larger problem: Nationwide, the crumbling economy is forcing cancellations of all sorts of business gatherings and pushing down attendance at trade shows.

Angst over the banking industry bailout has created a further chill: After being painted in Congress as junket-mongers, two financial institutions that had accepted federal rescue money backed out of events planned for Las Vegas.

In these lean times, Chicago's image as a down-to-business city -- there's no fun in the sun in March -- could help it better avoid any convention-as-junket stigma. And McCormick Place's roster of scheduled conventions for 2009 is actually stronger than last year's.

Still, one local convention industry expert said he expects attendance at Chicago conventions to be down about 10 percent this year. Even the city's convention bureau expects that some hotel rooms, while booked now, won't be filled later because of cancellations. "We'll count it a blessing if we end up being flat over 2008," said Mark Theis, Chicago Convention and Tourism Bureau executive vice president.

Chicago has lost a "handful" of smaller business meetings, Theis said. Accenture, a big consulting company, in December called off a meeting scheduled for May at McCormick Place, which was slated to have 1,000 attendees. The weak economy appeared to be the reason, he said.

On Friday, the American Society of Newspaper Editors scotched its April convention at the Fairmont Chicago. With its industry foundering, attendance was likely to be well below the 800 expected.

Cancellations of annual association conventions are rare, said Michael Hughes, research director for Tradeshow Week. It's much more common to see individual corporations, like Accenture, cancel business meetings. Hughes estimated that in a deep recession, such meetings can drop by at least 20 percent.

As companies tightened their travel budgets, trade show attendance steadily declined over the last year, Tradeshow Week said. In the fourth quarter, attendance was down more than 6 percent over the same period last year. And the outlook for 2009 isn't any brighter.

Ted Mandigo, an Elmhurst-based hotel consultant, said he thinks convention attendance in Chicago will be down at least 10 percent -- an estimate based on conversations with local hoteliers. On the bright side, Chicago still has a solid lineup of booked conventions for 2009, he said.

Slumps in the trade show business are a blow to hotels and restaurants, both of which are being hurt by a drop-off in consumer spending. Patrick Norton, general manager of Smith & Wollensky in Chicago, is well aware of the problem. "Fewer people are attending [conventions] and there's less business to go around."

Norton said even businesses that are doing all right have cut back on entertaining at high-end restaurants. "They don't want to even be seen spending money that could be construed as waste."

That perception issue has reared its head in the financial-services industry. After criticism from Washington, Wells Fargo & Co. canceled employee-related events in Las Vegas and Hawaii. Goldman Sachs moved a conference to San Francisco from Las Vegas.

Chicago's meat-and-potatoes reputation works in its favor, Mandigo said. "We're not perceived as the distractive type of convention center." Las Vegas with its casinos or Orlando with it's "sun and fun" more likely could be, he said.

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