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Build Central
The Expansion of Convention Center Space Nationwide
 Makes Discounting Quite Common
Now With the Economy in a Tailspin Cities Are Rolling Out Freebies
By Kathy Bergen, Chicago TribuneMcClatchy-Tribune Regional News

Dec. 8, 2008 -- Convention centers always wheel and deal to win trade shows and conventions, but the negotiations tend to be held behind closed doors.

Now, with the economy in a tailspin, a number of cities are rolling out sweetened financial incentives and broadcasting their availability.

Cincinnati touts a 2009/2010 Stimulus Package, offering deeply discounted or free space at the Duke Energy Convention Center and up to $55,000 in cash back on hotel bookings. New Orleans is wooing meetings with free space at the Morial Convention Center, topped off with free wireless access, a free cyber cafe and a free refreshment break. Tucson, Ariz., on Tuesday rolled out credits of up to $20,000 against meeting costs.

And convention bureaus increasingly are earmarking funds to pay for financial incentives, with a surge occurring in the past few years, according to a Tradeshow Week survey conducted this year.

"This is what it has come to," said Heywood Sanders, a professor of public administration at the University of Texas at San Antonio. The rapid-fire expansion of convention center space nationwide made discounting quite common, he said, "and that's just been exacerbated by the current economic circumstance."

The deep discounting appears to be producing results for some convention centers.

"For 2009, we picked up business that produced 40,000 hotel room nights, with about $12 million in local economic impact," said Barrie Perks, vice president of sales for the Cincinnati USA Convention & Visitors Bureau. The city is luring groups of 1,000 to 1,500 away from other midsize Midwestern cities, as well as a few from powerhouses like Las Vegas and Chicago, he said.

Small potatoes, perhaps, for a major convention city like Chicago, where major shows can produce more than $100 million in local spending. But in this economy, small potatoes are looking mighty tasty.

While many of the biggest players remain more circumspect about their moves than hungrier second-tier cities, they are watching the landscape carefully.

"In my career, I've seen this movie before," said Tim Roby, chief executive of the Chicago Convention and Tourism Bureau. "You're going to see pretty much everybody throw their hats in the ring on this."

The Chicago bureau, which books McCormick Place and Navy Pier, will be taking the relatively modest step of extending its Chicago Select program of slow-period discounts. Initially planned for the first quarter of 2009, 2010 and 2011 only, the program will be extended into the other quarters of 2009 and 2010 if needed, Roby said.

The program offers discounts on airfares, ground transportation, rental rates at McCormick Place and Navy Pier, museum event-space rentals and museum admissions.

And the bureau is exploring the possibility of creating an earmarked fund for financial incentives. Fifty-five percent of U.S. convention destinations have separate funds to cover discounts and incentives, according to the Tradeshow Week magazine survey. And 46 percent of those plan to increase the size of their funds.

"As we see more and more cities compete at that level, it's something we'll have to take a look at," Roby said.

Indeed, "there are ongoing legislative discussions about how to get resources into the hands of the convention bureau and McCormick Place so they can fully compete," said Ted Tetzlaff, chairman of the Metropolitan Pier and Exposition Authority, which owns and operates McCormick Place and Navy Pier.

Meanwhile, meeting planners are enjoying their bargaining power with convention centers and hotels.

"In the last few months, we are finding people willing to deal," said Catherine Mills, meeting services director for the American Academy of Pediatric Dentistry. "It's turning back into a buyer's market, which is nice for us."


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