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Indianapolis Scrambles to Retain Two Top Conventions;
Competing Cities Offering Deep Discounts

By Tom Spalding and John Russell, The Indianapolis StarMcClatchy-Tribune Regional News

Oct. 14, 2009--Facing intense competition from other cities, Indianapolis is scrambling to retain two top conventions that have been fixtures for more than a decade.

But even if the city succeeds in keeping the Powersports Dealer Expo and the Fire Department Instructors Conference, the deals could come at a steep cost, including lower rents, officials acknowledged Tuesday.

The fire instructors' and Dealer Expo conferences -- the second- and fourth-ranked conventions in visitor spending, respectively -- bring in a combined 50,000 visitors and $55 million in spending each year, according to the Indianapolis Convention & Visitors Association. The contract for Dealer Expo expires in 2011, and the fire instructors' contract expires in 2012.

Atlanta, Dallas, Houston, New Orleans and Orlando, Fla., have entered the picture as potential bidders for the Dealer Expo contract, Don Welsh, executive director of the convention bureau, told the Capital Improvement Board, which operates and maintains the city's convention center and sports arenas.

Competing cities are expected to offer considerable discounts on convention space, he said.

"Every city is dealing with a decrease in convention business and is offering very competitive packages," Welsh said in an interview. "Every meeting planner is trying to reduce costs."

The two convention groups could not be reached for comment.

If the conferences are kept here, revenue generated by them could be reduced at a time when the city is paying for expensive renovations to its convention facilities.

This news comes at a bad time for the CIB, which is struggling to find new revenue sources. On Tuesday, the board laid off two more employees, bringing the total to 11 positions eliminated since Friday.

The CIB's budget of $63 million for 2010 only maintains current operating levels after drastic budget cuts earlier this year, such as putting off planned maintenance, cutting advertising and grants, reducing cell phone bills and leaving positions unfilled.

The convention bureau, which markets the city's hotel and meeting facilities to out-of-town groups, wants millions of additional dollars to promote the city's expanded convention center and other amenities -- or potentially lose out on business to other cities.

While the CIB is looking for more revenue, Welsh said, it wouldn't be realistic to raise rental rates here, as some previously wanted, even after the $275 million convention center expansion is complete in December 2010.

That's because many larger cities, which have lost large conventions in a tough economy, are cutting their rental rates steeply to land new business. Several large cities, such as Denver and San Francisco, have dropped rates to the point their prices are "equal to the rates we thought we'd be charging," Welsh said.

San Francisco has seen its overall convention attendance fall 10 percent from last year, according to that city's Convention and Visitors Bureau. Room revenue is down 20 percent.

Other major cities in California, including Anaheim, Los Angeles and San Diego, are seeing similar fall-offs, the San Francisco Chronicle reported last month.

Last month, Baltimore lost one of its largest conventions, the Black Engineer of the Year Award Conference, to Washington, D.C., beginning in 2011. The conference organizers were lured to Washington by perks and incentives. Just a few months earlier, Rite Aid Corp. canceled a convention in Baltimore.

Some cities are pulling out all the stops to compete for business. For example, Washington is offering a discount package tied to the nation's 44th president, Barack Obama. Planners who book a meeting with 1,000 rooms or more through March in D.C. get 44 percent off convention center rental fees and a 44-minute reception with 44-cent beer and wine.

CIB members said they understand the effect of a city losing a convention and how long it takes to get those conventions back.

"When we lose them, we lose them for three years or four years or five years at a time," said Ann Lathrop, treasurer of the CIB.

Added CIB President Bob Grand: "They (competitors) are becoming aggressive because they understand it's a tighter market."

Call Star reporter Tom Spalding at (317) 444-6202.

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Copyright (c) 2009, The Indianapolis Star

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