venue outlook ’08

VENUE OUTLOOK ’08VENUE OUTLOOK ’08

International Convention Center Conference 2007 • Boston, MAInternational Convention Center Conference 2007 • Boston, MA

Facilities to FacilitatorsFacilities to Facilitators

• Convention CentersConvention Centers

• MarketingMarketing

• TechnologyTechnology

• ExhibitorsExhibitors

• Las VegasLas Vegas

• Airports & Convention CentersAirports & Convention Centers

• OutlookOutlookQ&AQ&A

ThemesThemes

Convention Convention CentersCenters

-8.0%

-6.0%

-4.0%

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Supply: Venue Exhibit Space Demand: Net Square Feet

Venue Supply vs. Demand Annual GrowthVenue Supply vs. Demand Annual Growth

Source: TSW

19

96

19

97

19

98

19

99

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

10

+

62 63 63 63.4 65.5 67.672.4 77.2

80.5 82.3 85.1 85.993.7

0

10

20

30

40

50

60

70

80

90

100

Total Convention Center Space MIL Sq FtTotal Convention Center Space MIL Sq Ft

7.8 million square feet in pipeline

Source: Tradeshow Week

19901995

20002007

332 369 389

469

0

100

200

300

400

500

U.S. & Canadian Convention Centers, U.S. & Canadian Convention Centers, Exhibit HallsExhibit Halls


Total ExhibitSpace Prime Exhibit

Space Meeting Space

188,079

155,816

59,881

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

200,000

Average U.S. & Canadian Convention Average U.S. & Canadian Convention Center Center

Average Number of Meeting Rooms 2007: 27


Total ExhibitSpace Prime Exhibit

Space Meeting Space

109,482

70,825

109,186

0

20,000

40,000

60,000

80,000

100,000

120,000

Average U.S. Hotel Exhibit HallAverage U.S. Hotel Exhibit Hall

Average Number of Meeting Rooms 2007: 40


500,000 or more8%

100,000-499,000

46%

50,000-99,00030%

25,000-49,00016%

Convention Center Size Breakout Square Convention Center Size Breakout Square FeetFeet


New VenuesExpansions

Renovations

2

7

9

0

2

4

6

8

10

New Builds and Expansions August 2006 to New Builds and Expansions August 2006 to July 2007July 2007

2.5 million square feet of new exhibit space


19

95

19

96

19

97

19

98

19

99

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

49

6557

7787

94 96

87

68

5762 60 62

010203040

50

60

70

80

90

100

New Venues and Expansions in New Venues and Expansions in DevelopmentDevelopment


So

uth

east

Mid

west

West

Co

ast

No

rth

east

So

uth

west

Mo

un

tain

Mid

-Atl

an

tic

119

81

64

5245

36

200

20

40

60

80

100

120

Number of U.S. Venues by Location Number of U.S. Venues by Location


Las VegasOrlando

AtlantaDallas

HoustonNew York

City

16

1110

8

77

0

2

4

6

8

10

12

14

16

Number of U.S. Venues by CityNumber of U.S. Venues by City


22 new venues in-process

40 expansions

16 major renovations in process

7.8 million square feet of exhibit space in pipeline – up 3% for total projects reported in 2006.

Pipeline meeting space is up 4.7%.

New Convention Centers & ExpansionsNew Convention Centers & Expansions


New Exhibit SpacePipeline New Meeting Space

Pipeline

3.0%

4.7%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

2006 vs. 2007 Exhibit & Meeting Space 2006 vs. 2007 Exhibit & Meeting Space Pipeline Forecast Increase (Projects 2007 to Pipeline Forecast Increase (Projects 2007 to 2010+)2010+)


New Convention Centers in DevelopmentNew Convention Centers in Development

500,000 or more0%

100,000-499,000

47%

50,000-99,00041%

25,000-49,00012%

Average Exhibit Space: 148,896 square feet


1,529,000

1,125,5001,164,182

1,440,914

395,676

1,116,000

153,000

866,551

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

1,800,000

2007-2008 2008-2009 2009-2010 2010+

Timeline for Projected Added Exhibit Timeline for Projected Added Exhibit SpaceSpace

EXPANSIONS NEW BUILDSSource: Tradeshow Week

MarketingMarketing

How is Convention Center Success How is Convention Center Success Measured?Measured?

1. Total number of booked hotel rooms 79%

2. Total economic impact 68%3. Hotel community occupancy levels 38%4. Total number of visitors 36%5. Convention center profit/loss 45%6. Visitor-related tax revenues 30%7. Public relations 21%8. Bureau profit/loss 2%9. Hotel community gross sales/profit 7%

Do not measure 11%Other 16%

Source: Tradeshow Week, ACME

Re-Branding?Re-Branding?

Are you undergoing a re-branding?

• Yes, we conducted this in 2006 31%

• Yes, this is underway for 2007 18%

• Planned for 2008 13%

• No 38%

When was previous re-branding?

• Before 1999 36%

• 2000 to 2001 23%

• 2002 to 2006 41%Source: Tradeshow Week, ACME

Do You Maintain Incentive Funds?Do You Maintain Incentive Funds?

YesNo

Don't know

60%

32%

9%

0%

10%

20%

30%

40%

50%

60%


How are Incentive Funds Allocated?How are Incentive Funds Allocated?

1. To only select event producers with a certain combination of a high level of historical economic impact and total hotel room nights (65%)

2. To all event producers with a certain level of historical total hotel room nights (29%)

3. To event producers that will sign long term agreements to anchor to our city or to add the city to a set rotation pattern (23%)

4. To event producers that ask for discounts and incentives from the bureau or venue (19%)

5. To all event producers with a certain level of historical economic impact (16%)

6. To all event producers with a certain level of historical attendance (10%)


What is the Source of the Incentive FundingWhat is the Source of the Incentive Funding

1. CVB budget item (42%)

2. Tax revenues (32%)

3. A special fund allocated by the hotel and hospitality (23%)

4. Municipal (or other) governmental general fund (13%)

5. Convention Center operating income or reserves (10%)

6. Other (16%)


Do You Provide Attendance Marketing Do You Provide Attendance Marketing SupportSupport

60%

40%

Yes

No


Venue Attendance Marketing SupportVenue Attendance Marketing Support

1. Public relations support: 87%

2. Adding event information to the venue web site(s): 71%

3. Enhanced signage in airport(s), around the city before the event: 58%

4. Liaison with city, state, regional affiliated groups or government agencies: 52%

5. Emails to potential local attendees: 45%

6. Venue discounts/rebates: 42%7. Mailings to potential local attendees: 39%8. Hotel discounts/rebates: 29%9. Entertainment, sports, cultural event or facility discounts: 29%10.Assistance securing event speakers, keynoters: 19%11.Advertisements for the event paid for by the CVB or venue: 16%12.Marketing to international attendees: 16%13.Travel and/or lodging incentives, discounts: 16%14.Cash payments/rebates/marketing support fees: 13%15.Telemarketing to potential attendees: 3%


New Services Being Offered by VenuesNew Services Being Offered by Venues

• Attendance promotion

• Adding or enhancing business centers

• Expanding greeter, concierge and VIP desk programs

• Offering a single point of contact for all services

• Expanding special taxi and bus departure areas

• Valet parking at the venue

• Video conferencing services

• Wireless internet

• Streaming video for attendance building


Does the Venue have Green Initiatives?Does the Venue have Green Initiatives?

53%

38%

9%

0%

10%

20%

30%

40%

50%

60%

Yes No Don't know


Have Green Initiatives Helped Win Have Green Initiatives Helped Win

Business?Business?

17%

68%

15%

0%

10%

20%

30%

40%

50%

60%

70%

80%

Yes No Don't know


Has Lack of Green Initiatives Lost Business?Has Lack of Green Initiatives Lost Business?

9%

71%

20%

0%

10%

20%

30%

40%

50%

60%

70%

80%

Yes No Don't know


Are You Going for LEED Certification? Are You Going for LEED Certification?

23%

49%

28%

0%

10%

20%

30%

40%

50%

60%

Yes No Don't know


Biggest Marketing ChallengesBiggest Marketing Challenges

Besides concerns about being a second or third tier city, budgets, exhibition space size and quality, and number of hotel rooms, the main challenges are:

• Available dates – “everyone wants the same window for dates”

• Breaking through to reach decision makers

• Building destination awareness or trying to change perception

• Getting meeting planners to visit the market

• Helping event planners to market the destination

• Differentiating from competition – “having a unique message”

• Third-parties that are between the client and the venue/destination/hotels

• Venue and CVB relationships


Biggest Marketing OpportunitiesBiggest Marketing Opportunities

Marketing affordability and safety – especially in second tier markets

• Continued economic development

• New hotel development, new venues and expansions

• Healthy hotel tax revenues

• Enhancing customer service

• Online marketing initiatives

• Customized, customer-specific marketing

• Strong face-to-face marketing and meetings industry


TechnologyTechnology

““Every show is a Every show is a

tech show.”tech show.”-- IT Director with one of the largest convention centers in the U.S.

Venue GMs on Technology Attributes that Will Venue GMs on Technology Attributes that Will Become More Important Over the Next 10 Become More Important Over the Next 10 YearsYears

High techmeetingrooms

Wirelessinternet Multi-function

space High techauditoriums Improved

environment(AC, lights)

88% 85%

72%

61%

50%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Source: Tradeshow Week Research, HNTB

Exhibitors’ “Must Have” Booth FeaturesExhibitors’ “Must Have” Booth Features

Lead capturetechnology High tech

signs/graphics Bright lightingVideo screens

WirelessInternet

64%

57%

50%

44%

20%

0%

10%

20%

30%

40%

50%

60%

70%

• 50% of exhibitors say they’ll need “upgraded telecommunication and internet services” at shows in the next 2 to 3 years.

Source: Tradeshow Week Research

• Faster, better, cheaper internet (especially wireless)

• More and better qualified customer service staff and technicians

Venue Users Want Two Technology Features Venue Users Want Two Technology Features Today Today

Top Show Producers: How Important Will Top Show Producers: How Important Will Online Video be Over the Next Two to Three Online Video be Over the Next Two to Three Years?Years?

Extremelyimportant Somewhat

important Not veryimportant Not at all

important

24%

45%

28%

3%0%

5%

10%

15%

20%

25%

30%

35%

40%

45%• Only 8% of show producers

live stream online content during their shows today.


Implications for Convention Center Implications for Convention Center Owners, Administrators and StakeholdersOwners, Administrators and Stakeholders

• Technology services, like F&B, have been an area where venues can hold rates.

• Service levels and staffing will likely be more important than major technology upgrades in the near term.

• A venue technology arms race in the mid- to long-term is likely – as online content explodes.

Facilities

to

Facilitators

Technology Will Help Convention Centers Technology Will Help Convention Centers Migrate from… Migrate from…

ExhibitorsExhibitors

Exhibitors on Improving Convention CentersExhibitors on Improving Convention Centers

Exhibitor Survey Question: In your opinion, how can convention centers and exhibition halls be improved from a design and functionality standpoint?

F&B

• “More dining options within the halls.”

• “More food courts and seating areas within exhibition area.”

• “Better restaurants so that we do not have to leave the center to entertain a customer.”

• “More seating areas and more places to get something to eat or drink. What good is finding food and drink if there's no place to sit down and enjoy it?”



Services & Technology

• “Have more than one service desk located in each hall.”

• “Easier installs for electrical, internet and satellite/cable feeds.”

• “More wireless internet, better cell phone access, ease of getting around in large halls, less prohibitive internet fees.”

• “Specifically, I'd like to see Wifi available very inexpensively or for free in common areas. more access/entrance points.”



Overall Design and Layout, Other

• “Have more than one service desk located in each hall.”

• “Better load in/load out docks, better storage areas.”

• “Trucking and shipping continue to be the biggest headaches.”

• “Get away from conventional layouts and do other things, all toward making attendance/participation a real ‘experience’.”

• “Always improving directional signage, better cell reception, variety of food and beverage venues, additional networking areas.”

• “Higher ceilings, larger freight doors.”

Shifted Event FundsShifted Event Funds

• In 2006, 30% of exhibitors had some of their event marketing funds shifted to web sites and email marketing.

• This percentage has held steady since 2003.



Exhibitors on Today’s AttendeesExhibitors on Today’s Attendees

Attendees are fact-finding Attendees are

there for education Attendees aredecision-makersand are ready to

buy

76%

44%

35%

0%

10%

20%

30%

40%

50%

60%

70%

80%


39%34% 32%

29%

20%

13%9%

16%

61%

0%

10%

20%

30%

40%

50%

60%

70%

Challenges Facing ExhibitorsChallenges Facing Exhibitors


27%

73%

Yes No

Is there more pressure from corporate to Is there more pressure from corporate to prove ROI?prove ROI?


65%

35%

Yes No

How Many Exhibitors Track ROI?How Many Exhibitors Track ROI?

80%

69%64%

49%

38%

29%

22%

18%18%

0%

25%

50%

75%

100%


Must Have Booth FeaturesMust Have Booth Features

• 50% of exhibitors say they’ll need “upgraded telecommunication and internet services” at shows in the next 2 to 3 years.


Salesmeetings Training

ConferencesSponsorship

IncentivesRoad shows

72%

62%

57%

39%37%

37%

0%

10%

20%

30%

40%

50%

60%

70%

80%

Exhibitors’ Other EventsExhibitors’ Other Events

Las VegasLas Vegas

Why Las Vegas is so StrongWhy Las Vegas is so Strong

• Hotel rooms; 6 million square feet of exhibition space

• Hospitality and tradeshow culture

• Food, shopping

• Marketing

• Access to California, Southwest and Asian markets

• Air lift

• Attendance growth and exhibitor positives

• Reinvention

Source: Tradeshow Week 200

TSW200 Leading Host Cities: 2006 vs. TSW200 Leading Host Cities: 2006 vs. 19961996

1996Las Vegas: 36Chicago: 25New York: 21Atlanta: 14Dallas: 13Anaheim: 11Orlando: 10New Orleans: 8San Francisco: 8Houston: 6Los Angeles: 6

2006Las Vegas: 45 Orlando: 20 Chicago: 18 New York: 16Atlanta: 14 Dallas: 8 San Francisco: 7 Anaheim: 6 Los Angeles: 6Rosemont: 6 San Diego: 6

Top Convention & Exhibition Host Cities Top Convention & Exhibition Host Cities 20082008

1. Las Vegas 248

2. Toronto 131

3. New York 121

4. Chicago 117

5. Orlando 108Source: Tradeshow Week

• The most expensive privately funded construction project in U.S. History. Phase one is scheduled to open in November, 2009.

• $7.4 billion

• 68 acre project

• CityCenter will have a 1/4 mile Strip frontage

MGM CityCenterMGM CityCenter

Source: Vegastodayandtomorrow

MGM CityCenterMGM CityCenter

• 4,000-room 60-story CityCenter Resort-Casino • 165,000-square-foot casino • 400-room Mandarin Oriental Hotel/Residences • 400-room The Harmon Hotel/Residences • 1500-unit Vdara Condo/Hotel tower • Twin, 350-unit luxury condo towers Veer • 500,000 square feet of retail and entertainment

space • 225,000 square feet of convention and meeting space • 900,000 square feet for back-of-house operations • 2,000-seat theater • 70,000-square-foot spa • 7,500-car parking garage • Fire station • People movers (trams) • On-site power plant


Echelon Las VegasEchelon Las Vegas

• $4.8 billion project; 87 acres, once home to The Stardust

4,713 rooms divided into five towers:

• 2,300 room Echelon Hotel• 650 room Suites at Echelon• 353 room Shangri-La Las Vegas• 860 room Mondrian Las Vegas• 550 room Delano Las Vegas

All four hotels at a glance:

• 140,000 sq. ft casino (the third largest in Las Vegas)• 300,000 sq. ft. shopping venue• 750,000 sq. ft. convention center• 30 restaurants and bars• 4,000 seat stadium-style theater (for resident production shows)• 1,500 seat theater (for touring acts) • The project will be completed in the third quarter of 2010


Airports & Airports & Convention Convention

CentersCenters

Convention Center and Airport TrendsConvention Center and Airport Trends

Airports Convention Centers

Expansion/renovation/new build Tighter budgets; cost containment Expanded technologies Enhanced security Traffic flow (pedestrian/auto) Aesthetics that mesh with surroundings Increased spatial efficiency Increasing number of self-service options Green, sustainable design Internal environment focus, HVAC, lighting Enlarged arrival halls, equipped with added services Passenger way-finding Open plazas with concession “villages” Enhanced food services Retail and restaurant franchises within the complex Displays of public art Hotel development “Airport City” – complex as a “destination” Offices within the airport Apartments within the airport

OutlookOutlook

Source: Tradeshow Week 200

3.2%

2.6%

1.5% 1.4%

3.5%3.1%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

Net Sq Ft ExCos Attendees

TSW200 Growth TSW200 Growth 20052005 and 2006 and 2006

3.2%

3.9%

2.7%

3.5%

-0.1% -0.2%

2.8%

2.2%2.6%

2.7%

-0.5%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

4.5%

Q12005

Q22005

Q32005

Q42005

Q12006

Q22006

Q32006

Q42006

Q12007

Q22007


Recent Growth in Net Square Feet Recent Growth in Net Square Feet DemandDemand

3.5%

-0.1% -0.2%

2.8%2.2%

4.0%

6.7%

1.6%

0.3%

2.8%

-1.6%

7.6%

3.9%

3.2%

2.6% 2.7% 2.7%

-1.3%

0.2%

-2.9%

-4.0%

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

Q12005

Q22005

Q32005

Q42005

Q12006

Q22006

Q32006

Q42006

Q12007

Q22007


Exhibitor & Attendee DisconnectExhibitor & Attendee Disconnect

Attendance Net Square Feet

Convention & Exhibition Attendance Convention & Exhibition Attendance Growth 2000 to 2007 (ytd)Growth 2000 to 2007 (ytd)

4.0%

-5.8%

-2.2%

3.6%2.7% 3.1%

0.5%

3.0%

-8.0%

-6.0%

-4.0%

-2.0%

0.0%

2.0%

4.0%

6.0%

2000 2001 2002 2003 2004 2005 2006 2007 YTD


GDP vs. B2B Exhibition Net Square FeetGDP vs. B2B Exhibition Net Square Feet

4.8%

2.7%

2.4%

3.5%

1.1%

-0.1%

2.1%

-0.2%

0.6%

2.8%

3.8%

2.2%

-0.5%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

4.5%

5.0%

2006 Q1 2006 Q2 2006 Q3 2006 Q4 2007 Q1 2007 Q2

US GDP

Net Sq. Ft.

Source: Tradeshow Week, US Commerce Dept.

GDP vs. B2B Exhibition AttendanceGDP vs. B2B Exhibition Attendance

4.8%

-1.6%

2.4%

-1.3%

1.1%

0.3%

2.1%

2.8%

0.6%

-1.6%

3.8%

7.6%

-2.0%

-1.0%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

2006 Q1 2006 Q2 2006 Q3 2006 Q4 2007 Q1 2007 Q2

US GDP

Attendance


Corporate Profits vs. B2B Exhibition Net Corporate Profits vs. B2B Exhibition Net Square FeetSquare Feet

6.5%

2.7%3.4% 3.5%

2.0%

-0.1%

-6.7%

-0.2%-0.3%

2.8%

6.2%

2.2%

-8.0%

-6.0%

-4.0%

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

2006 Q1 2006 Q2 2006 Q3 2006 Q4 2007 Q1 2007 Q2

Corporate Profits

Net Sq. Ft.


Corporate Profits vs. B2B Exhibition Corporate Profits vs. B2B Exhibition AttendanceAttendance

6.5%

-1.6%

3.4%

-1.3%

2.0%

0.3%

-6.7%

2.8%

-0.3%

-1.6%

6.2%

7.6%

-8.0%

-6.0%

-4.0%

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

2006 Q1 2006 Q2 2006 Q3 2006 Q4 2007 Q1 2007 Q2

Corporate Profits

Attendance


Markets with the Most Hotel Rooms to Open Markets with the Most Hotel Rooms to Open within Two Yearswithin Two Years

Market # Hotel Rooms % of Existing Supply

Las Vegas 14,241 9.6%

New York 7,897 9.8%

Washington, D.C. 6,832 7.4%

Chicago 6,528 6.5%

Phoenix 6,041 11.5%

San Antonio 4,416 12.7%

Los Angeles 4,211 4.5%

Source: Smith Travel Research

Exhibition Net Square Feet vs. S&P 500Exhibition Net Square Feet vs. S&P 500

-30.0%

-20.0%

-10.0%

0.0%

10.0%

20.0%

30.0%

40.0%

Net Square Feet

S&P 500

• 16 Year Average Annual Growth: 2.6% exhibitions; 9.8% S&P 500

Source: Tradeshow Week, S&P

Peak

Expansion3-4 years

Recovery 2-3 years

Slowdown 1-2 years

Typical Event Industry Growth CycleTypical Event Industry Growth Cycle

Q&AQ&A

• Associate Publisher & Director of Research Services, Tradeshow Week

• As head of Tradeshow Week’s Custom Research, Michael produces proprietary research, consulting and marketing projects for leading exhibition industry organizations around the world. He works closely with exhibition industry leaders, corporate exhibitors, entrepreneurs, investors and real estate developers to provide high-value strategic information, analysis and recommendations. His client’s include nearly all industry leaders in every segment of the industry as well as leaders in the investment and consulting community. Michael is frequently quoted by major newspapers and national magazines such as The Chicago Tribune; The Los Angeles Times; Newsweek; The New York Times; and The Wall Street Journal. In January of 2003, he was selected as a “Person to Watch” by min’s btob newsletter. Since 1999, Michael has been a presenter at over 65 industry conferences. He is also the research director and editor of Tradeshow Week’s syndicated Executive Outlook research surveys.

• Tel: (480) 483-4471• Email: [email protected]

About Michael HughesAbout Michael Hughes

venue outlook ’08

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