With all the new and expanded convention centers completed since 2000, many of which have opened up new second- and third-tier markets, there has been speculation that convention center rental rates and occupancies are bound to plummet.
In January 2005, the Brookings Institution issued a report written by Heywood Sanders, a University of Texas professor, warning of a convention center glut certain to leave many cities with white-elephant facilities.
So far, however, that has not come to pass.
Industry organizations such as the Center for Exhibition Industry Research were quick to debunk the report, stating that the research was based only on the top 200 trade shows.
Michael Hughes, director of research services at Tradeshow Week, a publication that monitors trade show trends, says the industry was already reviving by the time the report came out.
He says that the development of local community events, and the growth of the corporate meetings market, has helped keep industry growth going.
“Associations are still the bulk of business, but they have been the frosting,” he says.
While the building boom and resulting competition between cities has aided meeting planners overall, it’s only the largest producers that now have considerable negotiating power to benefit from such incentives as free rental, Hughes says.
“Midsize and smaller groups should look at shoulder and off-seasons,” he says. “They should cast a wider net and shop around. Instead of looking at two or three markets, they should look at four or six. Their information might be outdated.”
For the most part, convention centers appear to be in a holding pattern when it comes to rates.
According to a recent Tradeshow Week survey, 58 percent of CVBs and venues said they did not increase convention center rental rates last year and have no plans to increase them in 2007.
