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By Dana Glazier, CAE
METHODOLOGY:
During the week of November 15 - November 22, 2011, the
International Association of Venue Managers (IAVM) conducted a
survey via surveymonkey.com of 269 convention and exhibition hall
venues designated as a convention center in the IAVM database.
Eighty-five individuals representing 85 separate venues responded,
creating a response rate of 32%. All responses
were from North America.
Overall, 71 respondents (84%) report they offer certain
services provided by an exclusive provider or contractor, and 13
respondents (16%) do not. One skipped the question. |
SUMMARY:
Out of those 71 convention centers that indicated they offered
services provided by an exclusive contractor, 42 offer food service
(59%), 29 offer event security (41%), 28 offer rigging (39%), and 21
offer audio/visual (30%).
For those same 71, the in-house exclusives offered
include: 40 that offer plumbing (56%), 38 that offer electrical
(54%), 37 that offer data (52%), 35 that offer voice (49%), 34 that
offer house audio (48%), 25 that offer business center
services (35%), and 24 that offer coat check (34%). |
When asked what are the
reasons why convention managers offer exclusive services, 57 selected “To
ensure consistent service quality (95%),” closely followed by 56 selecting
“Produce revenues (93%).”
Convention Center managers indicate the two main ways
they ensure competitive pricing is by doing their own research (93%), or by
listening to feedback from exhibitors, show managers andcontractors (67%).
Among those who answered, all agreed that “Venue
managers must have the freedom to operate their venues in the way that best
meets the directives of the owners and the unique characteristics of the
local market, and protects the brand image of the destination.”
Among those who answered, 97% agreed that “Venue
managers can protect their destination’s brand image by delivering a quality
service experience through competitively selected exclusive or preferred
vendors.”
Sixty-eight percent of the respondents indicate that
their venue’s primary mission is to: “Generate economic development and
support job creation for your community.” The balance responded that their
primary mission is to “support business and tourism travel (14%),” “generate
an operating profit (10%),” or “other (8%).”
More city venues state they expect to operate at a
consistent operating subsidy annually (33% vs. 12% for non-city venues),
while more non-city venues believe they will continually reduce the
operating subsidy annually (33% vs. 15% for city venues).
REVENUE: Exclusive services are a
significant source of revenue for convention
centers, accounting for an average
of 37% of operating revenue.
Figure 1. Graph of percentage of
exclusive service revenue generated
by convention center respondents that
provide exclusive services. |
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REASONS FOR EXCLUSIVE SERVICES:
When asked the reason that venues
have exclusive services, 95% of the
respondents stated to ensure consistent
service quality, followed by produce
revenues, then to protect venue infrastructureand life safety.
Figure 2. Graph of reasons
venues
offer exclusive services by respondents
that provide exclusive services. |
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CONVENTION CENTER MISSION:
When asked their venue’s primary mission,
81% of all responding convention center
managers indicated that their primary missionis “to generate
economic development and support job creation for the community,”
“supporting business and tourist travel”; only 10% indicated a
requirement to “generate an operating profit.”
Figure 3. Graph of mission of
convention
centers that offer exclusive services. |
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OWNERSHIP EXPECTATIONS:
When asked about their local government’s
expectations of their operations, 46% said
their convention venues are “expected
to financially break even annually” or “to
make a profit,” and 46% also stated they
were to either “expect to continue to operate with the current
subsidy amount” or “reduce that amount annually.” No venue
managers stated that the operating subsidy is expected to increase
annually.
Figure 4. Graph of local government’s
expectations for venue operations. |
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OWNERSHIP
SUBSIDIES:
Sixty-seven percent indicated they
require a subsidy to cover shortfalls
between operating revenues and
operating expenses.
Figure 5. Graph of venues
requiring
subsidies. |
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SUBSIDY
SOURCES:
For those who require subsidies, a
combination of sources were used by
most venues. Almost two-thirds (62%)
utilize dedicated hotel taxes, and about
one-quarter depend upon general fund
revenues from city, county or state
governments (28%), and dedicated
restaurant or other use taxes (26%).
Figure 6. Graph of sources of
venue operating subsidies. |
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DIRECTION FROM
OVERSIGHT
BODIES: Sixty percent indicated their
direction from their oversight body or local
government is to improve revenue performance
and/or reduce costs.
Figure 7. Graph of direction from |
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DISCOUNTS FOR
SHOW
MANAGEMENT: Ninety-four percent
cited an increased emphasis from Show
Managers on discounting rent, including
caps on total rent charged for the event.
Figure 8. Graph of reduction of cost
negotiations for show managers. |
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DISCOUNTS FOR
ATTENDEES
AND CLIENTS: Eighty-six percent
indicated there is increased emphasis
on providing discount or complimentary
Wi-Fi services for attendees.
Figure 9. Graph of reduction of cost
negotiations for exhibitors and attendees. |
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