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After Decade Long Decline, Detroit's Convention Business
Expected to Fully Recover by Next Year

By Kathleen Gray, Detroit Free PressMcClatchy-Tribune Regional News

Sep. 18, 2009--Detroit's hard times and gritty image are helping to give an unlikely boost to the city's convention business.

Take the American Federation of Teachers, the parent union of the group that represents the Detroit Public Schools' approximately 5,000 teachers. They've signed on to bring 3,000 members to the city in 2012, and sympathy for Detroit -- at the epicenter of the nation's suffering economy -- was a factor.

"The town needs an economic boost," said Janet Bass, federation spokeswoman. "We do want to help the economy there."

A pity party for Detroit?

Hardly.

Detroit's hotel space has doubled in the last three years to 5,000 rooms with the opening of the three casino hotels, plus the Westin Book Cadillac and the Fort Shelby Doubletree. Cobo Center is now being run -- with aims for dramatic improvement -- by a regional authority, and Metro Airport remains a thriving hub.

After a 23% decline in convention business since 2000, Detroit Convention and Visitors Bureau officials are expecting business will have fully recovered with conventions and other visitors next year.

Detroit is sharing convention business resurgence with other so-called second tier cities.

One explanation: With the economy still faltering and trips to luxury locales frowned upon by politicians, taxpayers and stockholders, businesses, government and private groups don't want to appear to be having too much fun.

Let's see? Detroit or Vegas?

"Golf outings and big lavish parties are gone," said Carla Conner-Penzabene, director of sales for the bureau.

After a decade that has seen Detroit's convention business slide in tandem with the state's auto-based economy, things are turning around.

"We're always bidding on all the business we can," said Conner-Penzabene. "But now, we're getting our calls returned."

The bureau has landed some big fish.

In addition to the American Federation of Teachers conference in 2012, deals have been signed with the American Postal Workers Union, the General Assembly of God, and the Amvets veterans group. Each represents 5,000 "bed nights" for the city's hotels.

Smaller bookings include a square dancers association, a Japanese animation conference and the American Mosquito Control Association.

"These are groups that we couldn't have booked before because we didn't have the space," Penzabene said, adding that she expects 2010 convention business to climb back to pre-2000 levels.

Detroit and other so-called second-tier cities won't cause much suspicion among stockholders or taxpayers, who might raise an eyebrow for money spent in Las Vegas, Orlando or Hawaii.

Indeed, the "AIG effect" is causing business travelers and organizations across the country to rethink their travel.

The insurance giant dealt a blow to the travel industry when its officials traveled to a luxury California resort last year a week after the federal government agreed to an $85-billion bailout of the company. AIG was roundly criticized by politicians, including President Barack Obama. In January and February, nearly $2 billion in convention business was canceled.

"There's definitely a desire to avoid the negative perceptions with certain types of destinations that are seen as fun,"said Caleb Tiller, spokesman for the National Business Travel Association.

The Las Vegas Convention and Visitors Authority reported a 26% decline this year in the number of people traveling to the city for meetings.

Business travel overall is down $15 billion this year, according to PhoCusWright, a Connecticut-based travel research firm.

"And that's just the effect on the hotel and airline industry. The ripple effects are dramatic," said Douglas Quinby, senior research director at PhoCusWright.

In Detroit, there's also a "Katrina effect," Penzabene said, noting that certain groups want to help the beleaguered city.

The American Federation of Teachers knew it had lots of members in Detroit and that it was a good union town.

In New Orleans, where it took two years after the 2005 devastation of Hurricane Katrina for convention business to rebound, companies and organizations are combining business with charity.

Starbucks held its annual meeting in New Orleans last year and worked with Habitat for Humanity to build houses.

Penzabene said she doesn't care if sympathy or perception are helping her sell Detroit.

"I'll take the business any way I can get it."

Contact KATHLEEN GRAY: 313-223-4407 or kgray99@freepress.com

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Copyright (c) 2009, Detroit Free Press

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