Keeping up with Convention Centers

OP COMMERCIALBy Julian Anderson 

Chat with any colleagues who have recently returned from a conference and you'll likely hear anecdotes, restaurant recommendations and the latest insider gossip. Face-to-face networking, in such a concentrated way with people who have common interests, remains an incredibly effective and efficient way of communication. 

Judging by a report in the March 2018 issue of Trade Show Executive, an increasing number of people share this view. From December 2017 to January 2018, nationwide trade show attendance grew by 1.4 percent. 

Construction activity in the sector reflects that trend. There are 25 convention centers in North America currently in some phase of construction, with 35 additional projects in planning, financing or another pre-build stage. Broken down by programming, designated meeting spaces in these centers are the big gainers, up 30 percent in area over last year's numbers, with 1,640,807 square feet being added to existing venues and 480,000 square feet of space in new construction.

Especially in the age of digital meeting technologies, this news is encouraging. As people are communicating more electronically – video-conferencing is de rigueur in large organizations, with approximately 450,000 systems installed in the U.S., and Skype alone logs eight billion hours of calls each year  – it's obvious that quality, in-person time is viewed as valuable. The convention industry, especially facility owners/operators and host cities, should take advantage of this by keeping their properties in top condition. 

A convention center can generate a significant amount of revenue for a municipality, attributable to the facility rentals, but also the expense-account dollars spent by visitors for dining, entertainment, and shopping. In 2016, the San Diego Convention Center welcomed 824,000 attendees who directly spent $658 million in the city; the regional fiscal impact totaled $1.1 billion. Chicago's 2.6 million-square-foot McCormick Place generates $1.7 billion annually. 

Disrupt or Be Disrupted

There are clear benefits to all stakeholders to continue to pursue opportunities and commit capital to the continued development of convention centers. At the big-picture level, a new perspective on the economic relationship between the community and the meetings business is emerging. Cities are promoting not just their facilities and cultural attractions to conference organizers, but also their resources for innovation, often in the tech, research, and education sectors. This far-sighted, inclusive strategy stresses long-term growth for cities and regions, rather than short-term returns. Austin's South by Southwest (SXSW) is a notable example of this approach. With minimal expense, the city leveraged its homegrown media and music industries to attract attendees as well as outside sponsors to the conference; the local economic impact of the 2016 event was $325.3 billion. 

Redefining the destination-city in this way greatly enhances the draw to convention visitors. 

Drilling Down on Building Up

To keep up with these changes, the physical nature of convention centers has also evolved. In the 20th century, convention centers were all about scale, but the demand for cavernous exhibition spaces is waning. Replacing the bigger-is-better mandate is a focus on customizable meeting spaces that can be tailored to diverse specifications.

Many communities are faced with a choice between building new or renovating existing facilities. Typically, building a new hall is easier than rehabbing an old one. However, finding a suitable site – one that is sufficiently large, centrally located, and within walking distance of urban attractions – is not always feasible. Opting to build from the ground up also eliminates the need to interrupt scheduled conventions, as they can be held in the outdated facility while the new one is being constructed.

For convention centers located on a landlocked, built-out site, there's typically one way to go when adding meeting space to the hall – up. The old model for facilities situated everything at ground level for easy access; now, with land at a premium, most buildings are stacking spaces vertically. This presents its own set of challenges, including incorporating parking into the structure and planning the ground-level programming and content – but it provides an opportunity to make a design statement. 

Interior Amenities 

Inside the convention center, user expectations are a combination of the pragmatic and the aesthetic. Great-looking public areas and meeting spaces with a high level of quality detailing and finishes (think wood veneer, clear-span design, and glass partitions instead of drywall, concrete columns and popcorn ceilings). Architecture that capitalizes on its setting, with a lobby or ballroom oriented towards a view of a river or park, is another enticement that appeals to meeting planners. 

To maximize resources (both in area and revenue), it's possible to simultaneously increase meeting capacity and reduce exhibit space through creating a physically flexible design. Moscone West in San Francisco is an example of this tactic. The building features more than a mile of movable interior walls that permits a high degree of freedom to reconfigure the 200,000 square feet of function space on the second and third floors. 

Of course, the technological features that are intrinsic to the impetus for upgrading a convention facility must be state-of-the-art. Digital resources, seamless connectivity and security programs are central to every successful meeting. Intelligently planned and executed investments in convention centers will yield not only great financial returns, but ensure a returning customer as well. 

Julian Anderson is a founding shareholder and president of Rider Levett Bucknall North America, where he is responsible for overall management. 

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