The meeting and convention industry is a leading contributor to Orange County’s economy, with slightly more than 1 million delegates spending $880 million locally during their conventions last year.
Visitor spending supports roughly 160,000 jobs in OC.
The U.S. meeting industry was the 29th largest contributor to the gross national product in 2004, the most recent year that results were available.
Those meetings pumped a hefty $122.3 billion into the U.S. economy, according to research from the Washington, D.C.-based Convention Industry Council.
The industry’s size helps explain why the competition for meeting and convention business is increasingly competitive, with convention and visitor bureaus working harder to sell their city’s attractions (see related story, page 26).
“Ultimately, a destination’s attractiveness drives the decision (of where to meet),” said Doug Traub, president and chief executive of the Huntington Beach Conference and Visitors Bureau.
Overall, 88% of meeting planners said location is the most important factor when planning a meeting, according to a study by Meetings Media.
OC isn’t alone in ratcheting up its efforts to snag a bigger piece of the meetings and trade show business in recent years.
Its biggest competitors,San Diego, Los Angeles, Phoenix, Las Vegas and San Francisco,also are clamoring for attention.
Anaheim and its key competitors all have renovated or expanded their main convention centers since 2000. But size and configuration remain a factor in the choices planners make.
Los Angeles has added staff to focus on hotel-based meetings. The city also is highlighting its client services department and has begun an aggressive partnership marketing campaign that adds extra dollars to the marketing coffers.
San Diego is considering a 2% tax on hotel rooms to fund more promotions.
“San Diego has the most immediate direct impact on our market,” Traub said. “If they pass that tax it will bring in $24 million that they’ll probably use for marketing.”
San Francisco designed its newest wing of the Moscone convention center,Moscone West,with the corporate market in mind.
The corporate market often books on short notice and bypasses city visitor bureau services and convention centers.
Moscone West has helped change that.
“We’ve had tons of corporate business in there,” said Julie Burford, assistant general manager.
The multistory building isn’t connected to the other Moscone buildings and has no permanent interior walls, allowing for flexibility with space.
“The whole thing was oriented toward (getting business from) underserved markets,” Burford said.
Anaheim would like to see more corporate business, said Charles Ahlers, president of the Anaheim/Orange County Visitor & Convention Bureau.
It’s no wonder why. There were about 1 million corporate meetings with 80 million attendees last year, according to the Professional Convention Management Association.
In July, Phoenix opened the first phase of its convention center expansion. While still far smaller than Anaheim, it adds to the draw of a desert market that’s also rife with large resorts and large meeting spaces.
The Denver Convention Center expansion that debuted in 2004 was completely redesigned after meeting planners were consulted.
Changes included relocating a light rail station and putting breakout space all on one floor.
Las Vegas is the 800-pound gorilla of the meetings market. Its current marketing budget,generated from hotel tax revenue,is $87 million.
The federal government spent just $4 million on tourism promotion this year. And the total 2006-07 budget for Anaheim,the largest convention and visitor bureau in OC,is only $7.5 million.
Planners and show organizers consistently report that attendance goes up when they meet in Las Vegas. But they increasingly complain about the traffic and difficulty getting around Las Vegas when a large group is in town.
The OC Draw
OC has plenty to offer: a central location in Southern California, the proximity of the Disneyland Resort, a reputation as a safe destination and a diverse set of meetings hotels and resorts designed to appeal to any budget.
“We’re using the attractiveness of the location to get (attendees) to Anaheim,” said Debi Irwin, assistant vice president of sessions for California Dental Association, which met in Anaheim in March.
The relationship between the Natural Products Expo and staffers at the city’s convention center and visitor bureau goes a long way toward keeping the 40,000-person show in town, said Brian Henderson, senior vice president of the trade show group for New Hope Media, a unit of Boulder, Colo.-based Penton Media Inc., which produces Natural Products Expo.
Easy access is another benefit.
“With five airports nearby, it will make an easy visit for others from the rest of the states as well as the international community to attend,” said George S. Borkovich, principal of Ecobuild America LLC in Pennsylvania. Ecobuild is bringing a convention here next year.
Rising energy costs, hotel rates and airfares have caused some planners to tighten the meetings purse strings a bit.
While Anaheim isn’t the cheapest convention destination among its key competitors,that honor goes to Phoenix,it is competitive.
The daily cost of a business trip to Anaheim is $368 compared to a national average of $310, according to the 2006 Corporate Travel Index published by trade journal Business Travel News.
No. 1 New York has a daily cost of $721, far outpacing second-place Boston, which is at $482.
Those costs include hotel, meals and car rental.
OC’s John Wayne Airport gets high marks for customer satisfaction among travelers.
A recent JD Power survey showed John Wayne ranked No. 3 in customer satisfaction among small airports. Long Beach came in at No. 7.
San Diego was No. 9 among midsize airports. Los Angeles ranked No. 13 among large airports.
Planners also put a premium on having hotels within walking distance of the convention center. Anaheim gets high marks for having numerous hotels near the convention center, but other markets are catching up fast.
In Los Angeles, LA Live, which will include a new convention headquarters hotel, is under construction. In San Diego, a 1,100-room Hilton hotel will adjoin the east end of the city’s convention center by late 2007.
Convention attendance has been on the rise again in recent years. This year, Anaheim will host about 650 groups and 1.1 million attendees.
Next year, some 675 groups and 1.2 million attendees are expected in the city.
In all, Anaheim has an estimated attendance of 3.1 million booked for future years, including the American Library Association, which already is locked in for 2020.
Addressing Challenges
Changes in the meetings and convention market have put a high premium on smaller meeting spaces for breakout sessions staged in conjunction with conventions.
That’s an area where Anaheim comes up on the short end. But the city is looking at options to fix the problem.
One option would convert exhibit hall E to meeting space. Another would move one parking area underground and build new meeting space on the land.
“The solution really is to add 100,000 square feet of meeting rooms,” said Greg Smith, executive director of Anaheim’s Convention, Sports & Entertainment Division. “To do that, we’d have to (build) up.”
City officials will make a trip to San Francisco to see for themselves how Moscone West works before making a decision.
In addition, the long-awaited cosmetic changes to the exterior and landscaping around the Anaheim Arena are under way and should be complete this year. The old entryway was demolished in July.
John Wayne Airport may get high marks from travelers, but it’s still limited in the number of flights that pass through.
The airport will begin a five-year expansion plan in 2007 that will add six gates at a third terminal and more parking to the airport.
Transportation in and around OC remains a challenge.
Anaheim announced plans earlier this month for a Regional Transportation Intermodal Center to be built near the Arrowhead Pond and the Orange (57) Freeway.
“It will be the largest transit station in Southern California,” said Mayor Curt Pringle.
The center may not get visitors to the beach, but it could alleviate traffic with the proliferation of MetroLink, Amtrak, bus lines and, possibly, the long-discussed high-speed train service that would run either to Los Angeles, Ontario, Sacramento or Las Vegas.
Anaheim also has longed for more restaurants for many years. While the Downtown Disney retail and restaurant complex has helped, more is on the horizon.
Morton’s and Ruth’s Chris Steak House are set to open by next year in the Anaheim Resort District. And GardenWalk, now under construction within a mile of the convention center, is set to debut phase one next fall.
GardenWalk is 80% leased and includes Bubba Gump Shrimp, Cheesecake Factory, California Pizza Kitchen, McCormick & Schmick’s, P.F. Chang’s China Bistro and Roy’s.
“A year from now you’ll be able to eat at six restaurants at GardenWalk,” Pringle told an audience of visitor and convention bureau members at a recent meeting.
Storm Clouds
While Anaheim is poised for another growth spurt in the meetings market, a cooling economy could once again put a damper on some of the plans.
Energy costs, consumer confidence, higher hotel and air costs and,most recently,another high terror alert level could combine to dampen the enthusiasm of developers and conventioneers.
