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Anaheim so far has beaten the economic slowdown



Anaheim Bookings Up in Down National Meetings and Conventions Market

The meetings and conventions business nationwide has been hit hard by a slowing economy that has resulted in reduced attendance, fewer exhibitors and some cancellations,particularly in the tech sector.

A recent report by Rochester, Wis.-based Runzheimer International showed that 54% of corporate travel managers have cut back on business travel and 64% are scheduling fewer conferences and seminars.

That may be true elsewhere, but in Anaheim, convention business is good. And that’s helped the county remain strong in a year when others are struggling.

“Anaheim is booking like crazy,” said Maggie Stapp, national sales manager for Meetings Manager, in Laguna Hills, which handles mostly high-end incentive and corporate travel.

Doug Ducate, president of Chicago-based Center for Exhibition Industry Research, said new development in Anaheim and lower costs compared to New York, Chicago or Los Angeles are driving forces behind continued growth for this area.

“Orange County is unique,” he said. “The timing (of the slowdown) is better here because of the development.”

Orange County has seen its hotel occupancy grow 2% overall this year, with a 3% increase in Anaheim in the first half of 2001, according to Hendersonville, Tenn.-based Smith Travel Research. Meanwhile, San Francisco watched its 2001 hotel occupancy drop 14% in the first half of this year,largely due to its heavy dependence on the technology industry. According to Smith Travel, only three others among the country’s largest 25 markets,Houston, St. Louis and San Diego,are in the black in terms of occupancy growth this year.

And that has drawn nationwide attention to Orange County.

“Anaheim is a primary market now,” Ducate said. “It has more events than Los Angeles.”

The newly expanded Convention Center expects to host about 1 million conventioneers overall this year, the first full year of operation since the expansion was complete. Already, more than 725,000 have attended events there this year. Each conventioneer on average spends a total of about $1,500 for a four- to five-day stay.

For next year, the numbers could be even better. Charles Ahlers, president of the Anaheim/Orange County Visitor & Convention Bureau, said last month that Anaheim is expecting 1.4 million conventioneers in 2002,far surpassing pre-expansion years when attendance languished in the 600,000 to 800,000 range.

Recent OC conventions, like the American Urological Association, which brought 16,000 medical professionals here in June, have reported growth in both exhibitors and attendance. This month’s Association of Woodworking & Furnishings Suppliers show was the largest in its history.

“Exhibitors took more space and registration was up 12%,” said Judy Smith-Asbury, the show’s promoter.

And last week’s Trade Show Exhibitors Association convention had a 10% increase in attendance and more exhibitors than in previous years, according to President Michael Bandy.

Bandy said the Anaheim location helped draw local traffic.

“We feel we’ll continue to do well in Southern California,” he said.

But Bruce Joffe, director of communications for the Screenprinting and Graphic Imaging Association, was more cautious about projections for the group’s upcoming September show, saying that exhibitors were booking smaller booths.

“We’re hearing that corporate travel budgets might impact attendance, too,” he said.

So far, that hasn’t happened.

Ahlers said that this year’s meetings pace has put hotel bookings about 65,000 rooms ahead of last year in the Anaheim market.

Of course, about 80% of visitors to OC are leisure travelers, a segment that has remained healthy, if below projections, so far. (New projections for 2001 visitor numbers predict a 2% to 3% increase from last year’s 40 million, down from 5% predicted earlier this year.) And Anaheim doesn’t have the independent business traveler base that areas like San Jose have depended on for so long.

“We’ve never had that market in Anaheim,” Ahlers said.

Other areas of OC, however, do. And those areas haven’t been quite as robust as North County.

Tech-heavy South County has seen its hotel occupancy decrease by more than 5% this year, according to Los Angeles-based PKF Consulting. Newport Beach,more reliant on individual business travel than other areas of the county,saw its numbers drop more than 6%. Neither area gets a lot of carry-over business from conventions in Anaheim.

“The economy is causing a lot of hiccups,” said Tim Brown, managing partner of Meetings Site Resources in Irvine.

Brown said he has seen meetings canceled because of the slowing economy and a drop in technology events, a sentiment echoed by others.

Industry publication Tradeshow Week reports that attendance at computer and electronics shows in the first half of the year were at their lowest point ever,down 3.1% from 2000. For 2002, only 10 technology shows so far are scheduled at the convention center, compared to 18 in 2001.

But the healthcare and pharmaceutical industries are going strong and have helped pick up the slack caused by the technology downturn. This year, healthcare and pharmaceuticals account for 20 events at the convention center, compared to 18 in technology,a fact that has not escaped local hotels and meeting planners.

And that’s where some South County hotels are picking up the slack.

Gary Mitchell, director of marketing at Newport’s Sutton Place Hotel, said he is trying to shift the focus of meetings away from technology to pharmaceuticals, despite strong local relationships with the likes of Conexant Systems, Broadcom Corp. and Toshiba.

But at the Irvine Spectrum’s Doubletree Hotel, which had a lot of dot-com business last year, director of sales Angela Leahy said she is now trying to build weekend business and go after the so-called SMERF market of social, military, education, religious and fraternal groups.

Those groups accounted for about half the conventions held at the convention center so far this year.

“Associations don’t cancel,” said Cathleen Meyer, a hospitality executive at Parker Pacific Co. in Los Angeles. Meyer, whose company represents several resort clients on the West Coast, said corporate clients are willing to pay cancellation fees, while associations rarely do.

But other meeting planners say such fees can negate any cost savings, so companies are using other tactics to reduce costs instead.

“We’re not seeing cancellations, but clients are more reserved,” said Marcelle McCullough, national sales manager for destination management company PRA OC in Costa Mesa. “They want to leave the impressing of not going all-out.”

That’s especially true for IPO clients, Brown said.

“They’re postponing meetings, because it doesn’t look good to do one in this climate,” he said.

Some companies, like Aliso Viejo-based Fluor Corp., are planning more electronic meetings to cut travel costs. Others, like Fullerton’s Cargill Corp., which caters to the food service industry, are holding meetings on site instead of using local hotels. And some, like Orange-based Experian, which laid off 150 employees in July, have reduced their in-house planning departments.

But though technology is the hardest-hit sector in this economy, some technology companies remain unaffected.

In Irvine, computer software reseller Vision Solutions isn’t making any changes.

“We’re doing the same number (of shows) next year as this year,” said marketing communications manager Deborah Drisdale.

Earlier this year, the 125-employee company brought almost 200 international resellers to the Grand Californian. In 2002, they’ll be at the Four Seasons in Newport Beach.

“The resellers are our partners. You can’t stop doing the meetings because the bottom line would be more impacted if we didn’t get information out to them,” Drisdale said.

Another Irvine company, 1,200-employee Epicor Software Corp., says it hasn’t canceled any meetings, either,but is watching costs by staying closer to home and using less booth space at trade shows.

“We’ve focused on the business side of the events,” said Cindy Valdez, director of marketing events. Valdez said they’ve cut out most of the social components that sometimes verged on extravagant.

“Now we get them in, conduct business, and get them out,” she said.

Some companies even claim that a slow economy helps their events.

“When other companies cut back, ours increases, because the number of independent business owners increases,” said Susan Stevens, a spokeswoman for Alticor, the Grand Rapids, Mich. parent of Nutrilite Products, which employs 650 in its Buena Park office. n

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