Chicago’s convention center rivals are suffering

Posted April 6, 2010 at 3:12 p.m.

By Kathy Bergen
While Chicago is singing the convention business blues, its two biggest
rivals — Las Vegas and Orlando — have reasons to howl even louder,
according to attendance data for 2009, when the deep recession kept many
conventioneers tethered to their home bases.

Attendance at McCormick Place conventions and trade shows tailed off by
nearly 7 percent last year, to 893,068 individuals, according to data
released Tuesday. The same year, the Las Vegas Convention Center
experienced a 30 percent dive, to 1.1 million attendees, and the Orange
County Convention Center took a 21 percent fall, to 781,740. The two Sun
Belt facilities also saw a decline in number of events, while Chicago
saw a rise last year.

“These are really hefty declines in places where you would not expect it — in places that systemically have done well,” said Heywood Sanders, professor of public administration at the University of Texas at San Antonio.

To some extent, Vegas and Orlando continued to suffer from the so-called “AIG effect,” or the backlash stemming from American International Group Inc.’s spending more than $400,000 on a luxury resort excursion shortly after receiving a federal bailout in the fall of 2008.

“Chicago is considered more business-oriented,” said Ted Mandigo, a hospitality industry consultant based in Elmhurst. “If you’re going to Orlando, you better have had a good year, and if you’re going to Las Vegas, you better have had a superb year, because of the image of those two cities [as entertainment centers.]“

Convention officials in those two cities say the economy was the No. 1 factor in their declines, but that corporate America’s reluctance to book events in resort locations did hurt the meeting slice of their business.

While Chicago suffered lesser damage in 2009, it faces a steeper uphill climb out of this slump because it has a much smaller budget to lure future shows in an increasingly cutthroat landscape, Mandigo said.

“Chicago has a handicap of funds and that’s what’s used to subsidize conventions,” he said.

The Chicago Convention and Tourism Bureau, a state-aided non-profit that markets McCormick Place, has a sales and marketing budget of $13.8 million, compared with $143 million in Las Vegas and $47 million in Orlando, according to Tim Roby, president and chief executive of the Chicago bureau. He presented those figures last week at a state legislative hearing on how to overhaul the city’s struggling convention business.

“Looking forward, legislative changes are paramount if Chicago is to remain a premier meetings and convention destination,” Roby said in a prepared statement. The state legislative panel is expected to conduct a second hearing on the issue Wednesday morning at the Thompson Center.

The issue also is being studied by the interim board of the Metropolitan Pier and Exposition Authority, which voted at its first meeting Tuesday to spend up to a total of $190,000 to have two consulting firms assess the cost competitiveness of its operations relative to its chief rivals.
Because the assignment must be completed by later this month, the authority’s board awarded the contracts to Pricewaterhouse Coopers and C.H. Johnson Consulting Inc. on an emergency basis, without soliciting competitive bids. The board is aiming to make its recommendations on overhauling operations by the end of April.

While Las Vegas officials say they see anecdotal evidence of economic improvement, Orlando and Chicago officials are predicting a slow recovery.

“The meetings/convention industry typically lags one year behind a major recession,” Roby said. “We can expect 2010 to be as soft or softer than 2009.”

Kathie Canning, deputy general manager of the Orange County Convention Center in Orlando, says the center is taking a conservative stance, forecasting a flat performance this year and next.

The slump in the trade show business has been nationwide, with the Center for Exhibition Industry Research trade group reporting a 12.5 percent decline in its index, by far the steepest drop in the decade it has been tracking performance.

No doubt the recession played a big role, but there are other factors at work, some of which may persist, even in an economic rebound.

The rising use of technology means potential attendees can review products and listen to seminars online, allowing some to trim their stays at trade shows, or eliminate them altogether.

And exhibitors who reduced the size of their booths during the recession may have grown comfortable with smaller displays, said Doug Ducate, president and chief executive of the Center for Exhibition Industry Research. “Truthfully, the jury is still out,” he said.

And the shrinking shows now have more choices of venues large enough to accommodate them, both because the shows themselves are smaller and because there has been a rapid and continuing expansion of convention hall space, Sanders said. This has led to an environment of extreme discounting and increased political pressure to save struggling convention halls, he added.

“This is not just about Chicago,” he said. “There are larger, immutable forces at work.”



  1. Jon Bach April 6, 2010 at 4:53 pm

    Are 2009’s NPE Numbers included in this comparison? That show was DEAD in June of ‘09.
    But seeing as the NPE Show occurs once every three years, how could they compare the ‘09 attendance to that of ‘08.
    There was no show, and the ‘increase in attendance would be PURE GRAVY’.

  2. Mo Shizzle April 6, 2010 at 5:02 pm

    Great, now the labor unions have a bigger bargaining chip and can continue to charge exorbitant fees for changing light bulbs in booths and plugging in extension cords for exhibitors.

  3. Pat McGuire April 6, 2010 at 8:12 pm

    Finally the truth is coming out the unions are not the bad guys but we knew this all along

  4. JOHN C April 6, 2010 at 9:19 pm

    Unions offer very good service and do the job faster and better than the muts anyplace elese.

  5. Mikie H April 7, 2010 at 7:00 a.m.

    Why are union guys from chicago sent to other convention cities to set up shows? If chicago union guys are too expensive in chicago why are the same union guys not too expensive in orlando? When our union guys go to say,orlando they get the same pay as in chicago plus a per diem expense and airfare to and from orlando. its the same thing at other convention cities
    What is wrong with this picture too expensive for chicago but not too expensive to be sent out of town to set up shows

  6. Paul April 7, 2010 at 7:47 a.m.

    I am sure these stats are coming from the White House Press Office. I looked on the Orlando CVC webiste and they are showing an increase in attendance. Also, Chicago lost a higher than normal show count over thre past 2 years, any slight increase looks good. Yes, something past a high school education let’s you think critically and think (this is looking at you Union folks!)
    Where are these figures coming from?

  7. HeyNow April 7, 2010 at 8:10 a.m.

    I don’t doubt these figures. I know that for the accounting industry, people in recent years have avoided conventions in Vegas and Orlando for the exact reason this article noted. It looks like you are just going there for the entertainment, and the convention is secondary. Places like Chicago, Boston, Dallas and even New York are deemed more acceptable for conventions and seminars…even if they might cost more than Vegas and Orlando, in reality. It is all perception.

  8. mike April 7, 2010 at 9:12 a.m.

    Pat McGuire wrote:”Finally the truth is coming out the unions are not the bad guys but we knew this all along ”
    Um…are you kidding me? This story does NOTHING to exonerate the union fleecing of attendees.
    FORCING people to pay some dimwit a lawyer’s wage to move a box is criminal.

  9. mike April 7, 2010 at 9:16 a.m.

    Mikie H, thanks for admitting that unions are ripping off other convention centers as well. Paid travel expenses to go do unskilled labor than any bum could do? Wow. Crooks.

  10. MTW48 April 7, 2010 at 10:24 a.m.

    So most likely we have gotten the BS that you hear in the corporate world when something goes wrong, blame everything else. It really sounds like the amount convention centers built were more than the actual demand. Of course, what is the plan in Chicago to deal with the problem? We just keep blaming the unions which is not a solution.

  11. Uncle Joe April 7, 2010 at 11:42 a.m.

    You can’t blame the unions for ridiculous mark-ups on beverages, equipment rental rates, etc. It all comes back to management that is not running the place like a normal business. Between political meddling & the attitude that the exhibitors are visiting cash cows, I’m surprised the folks in charge haven’t run it into the ground. As a friend put it recently, it’s a good thing colleges started all those MBA programs so our enterprises can be properly managed without surprises.

  12. Paul April 7, 2010 at 3:56 pm

    I am sure these stats are coming from the White House Press Office. I looked on the Orlando CVC webiste and they are showing an increase in attendance. Also, Chicago lost a higher than normal show count over thre past 2 years, any slight increase looks good. Yes, something past a high school education let’s you think critically and think (this is looking at you Union folks!)
    Where are these figures coming from?

  13. Pat McGuire April 7, 2010 at 11:48 pm

    Hey Mike and Paul I notice neither one of you will give your last name but it is real clear that neither one of you finished high school Your wage even though you are non union and any health ins. and pension you have is based on what the union fought for years ago and is still fighting for If you ever get your wish about the unions you think that your pay and benefits will go away Of course if you looked into this instead of talking about things you have no idea about and talking trash abut things you nothing about but of course if you had a high school education you would no better remember any comment I make has my last name with it I also wonder why we do no not know what you do to make a living I am sure you really working is not a option