Far From Killing the Meetings Industry, Technology Has Fueled a Boom
Since the Medical Design & Manufacturing West and Pacific Design Engineering shows went online in 1998, attendance at these events has increased by 20% to 30%.
About 40% of the 18,000 attendees at last week’s combined conference at the Anaheim Convention Center registered online. What’s more, a spokeswoman for LA-based Canon Communications, the show’s promoter, said the number of exhibitors is on the rise, attracted in part by the added exposure they receive from perks like direct links from the show’s web site.
That’s all in sharp contrast to a few years ago when some theorists predicted that meetings would decline as telecommunications technology advanced and the use of and the Internet increased.
“I’ve been hearing that for 15 or 20 years,” said Tim Brown, managing partner of Meeting Sites Resource in Newport Beach.
Instead, meetings are increasing in numbers, and technology is one of the factors contributing to their growth. According to Successful Meetings magazine, 65% of meeting professionals say they will expand to the virtual world within the next three years.
Promising Market
Combine the benefits of technology with a hot economy, a trend toward shorter but more frequent meetings and a tendency for more busy executives to combine business trips with family vacations, and that bodes well for the future of meetings business in Orange County.
Consider the following:
n According to Convene magazine’s annual meeting market survey, 89% of the 1,000 associations surveyed said attendance either increased or remained the same in 1999. And even small meetings, once thought to be vulnerable to emerging technologies, had a 10% growth.
n A survey by Tradeshow Week revealed that attendance at shows for the first three quarters of 1999 grew 6.6% and averaged 12,000, while the number of exhibitors grew 1.4% with an average of 650 per show.
n The Incomm Center for Trade Show Research, Chicago, said more CEOs are attending trade shows and using the time to sell to key customers.
n Earlier this year, Peter Yesawich, president and CEO of Yesawich Pepperdine & Brown, an advertising and marketing firm specializing in the travel industry, told delegates to Meeting World 99, one of the industry’s largest shows, that there will continue to be a very strong demand for business meetings, particularly in industries where the rate of information change makes it difficult for professionals to keep pace.
Brown, whose company plans about 400 meetings per year, says accelerated competition within industries and a spate of mergers and acquisitions also contribute to the increase.
“Mergers and acquisitions mean more meetings,” Brown said. “It’s a new culture for the combined organizations and it’s essential to get everyone on the same page.”
The Anaheim/Orange County Visitor & Convention Bureau estimates that meetings business will increase about 25% in Orange County once the Convention Center expansion is complete, but that expansion, which will bring the center’s total square footage to more than 1.4 million, isn’t the only game in town. Area hotel developers, too, are banking on growth by including significant chunks of meeting space in projects both under construction and in the planning stage.
Hotels Optimistic
Orange County has about 887,000 square feet of meeting space at its 50 largest hotels, but that figure could increase by about 50% if the hotel projects now under construction and in planning all come to fruition. New space already under construction includes 22,000 square feet at the Grand Californian on the grounds of California Adventure in Anaheim, 5,400 square feet in a new facility at the Ritz-Carlton Laguna Niguel; 28,000 square feet at the Crowne Plaza in Garden Grove; about 25,000 square feet at Monarch Beach and about 20,000 square feet of additional space at the Marriott Renaissance and Embassy Suites in Garden Grove.
Those projects alone will increase OC’s inventory by about 12%.
And they’re not the only ones getting in on the action.
Newport Dunes, which probably won’t break ground for at least another year, is planning 55,000 square feet of meeting space that Rosalind Williams, president of the Newport Beach Conference and Visitors Bureau said would “help ratchet up efforts to build a broader meeting planning base.”
The E. J. Holtze Corp., Denver, which plans an Executive Village Suites in Newport Beach scheduled to break ground this spring, will bring another 4,000 square feet to Newport’s inventory, currently the second-largest of any in OC with 11% of the total, but far behind that of Anaheim, which has 43% (see related story page 23). At Park Place in Irvine, a planned Ritz-Carlton, in the preconstruction design phase, will include 13,900 square feet of meeting and banquet space. And Phoenix-based Athens Group is nearing approval to begin its Treasure Island development with Ritz-Carlton in Laguna Beach, a resort that will bring another 10,000 square feet to South County, which lags far behind the rest of OC in meeting space with only 6% of the county’s total.
Those projects would add another 9% to the county’s total meeting space.
Others properties, including two in Anaheim by Costa Mesa-based Tarsadia Hotels and three hotels tentatively slated for the Pointe Anaheim complex, are farther out in the planning process, but could add another 100,000 square feet to Anaheim’s inventory when they come to fruition. And existing hotels, like Tarsadia’s Anaheim Marriott and WestCoast Anaheim, are taking a wait-and-see attitude before they finalize any expansion plans.
The amount of space in the pipeline is enough to make some people wonder if the area is building toward a glut. Local industry insiders don’t see it that way.
“Meeting space is like a diamond; you can’t have too much,” said Charles Ahlers, president of the Anaheim/Orange County VCB.
Jerry O’Connell of Pacific Hospitality Group, the developer of the Crowne Plaza in Garden Grove, which was criticized by some when it increased meeting space to about 28,000 last year from the 9,000 originally planned, defended the decision.
“There are a lot of meetings that don’t need the convention center,” he said. “We expect high demand for smaller meetings.”
Other hotels are banking on that, too. Among those in OC that have made a concerted push for more meetings business are the Anaheim Marriott, Irvine Marriott, Hyatt Irvine and the Doubletrees in Costa Mesa and Orange.
Ned Snavely, general manager of the Irvine Marriott, said he isn’t worried about the increased competition, but said his sales staff would be “more aggressive” in pursuing business.
At the Hilton Anaheim and Towers, one of the properties that has traditionally benefited from overflow at the convention center, director of public relations Patrick Hynes said they don’t expect any drop-off in business, either.
Hynes said there are certain shows that want hotel space for specific functions, whether or not the convention center could also accommodate them. He cited the National Association of Music Merchants (NAMM) as an example, saying that group used the Hilton for all of its piano displays in the past.
“They like the hotel setting for that,” he said.
Meeting Sites Resource’s Brown said he’s seen a sharp increase in corporate business.
“More hotels are trying to become less dependent on associations and large groups but want to focus on smaller associations and corporate business to become self-sufficient. The hotels are anticipating the center’s expansion,” he said. “It always amazes me that the market remains so strong.”
In 1999, 71.5% of OC’s group business was in corporate meetings, according to Oakland-based Hospitality Information Services. Another 12.2% came from associations.
With medical, computer and electronics shows growing the fastest, OC should be well poised to take advantage of both the corporate and trade-show markets. There are 34 healthcare-related groups already booked into OC this year, compared with 18 last year at this time.
And in the Meeting Planners International Meetings Outlook Survey for 2000, meeting planners said increases are expected in all types of meetings,both corporate and association,and regional meetings will increased as much as 26% this year compared to 1999.
But despite the optimism, there are words of caution, too.
Nidal Ibrahim, vice president of corporate communications with Capital Pacific Holdings, Newport Beach, the developer of the Monarch Beach property, said, “In real estate, it’s always who will over-build first. I think you are going to see it happen.” n
