It’s a hospitality industry truism: heads in beds.
Even the term meetings and conventions has vitality mainly in plurality: multiple days, many events, repeat.
A hotelier’s work is never done. Every day: empty beds.
And as it happens, the work of heads in beds—or bods in pods when it’s one of the new slow-hotel, millennial-savvy, tiny-room properties—extends beyond remodeled rooms and restaurants and revamped meeting and events space.
So do the benefits.
Others that make money include destination management companies—a different animal from destination marketing organizations, such as the Orange County Visitors Association in Irvine and city-focused groups that include Visit Anaheim and Destination Irvine.
The latter promote areas for business and tourism. The former—a main Orange County one is AlliedPRA Inc.—organize trips at the destination once destination marketing organizations bring people in.
Both types of organizations make events a healthy business.
Big Growth
Additional ancillary business comes economywide. A sampling: event planners and producers, logistics providers—trucks, for instance, that bring the stuff—and booth builders, restaurants and ride sharing.
Start with the now 1-million-square-foot Anaheim Convention Center, which opened expanded space in September.
A 2014 study by Crossroads Consulting Services in Tampa, Fla., before the project broke ground in April 2015, said events at an expanded facility would grow more than 25% a year to 280.
Add OC’s hundreds of hotels, thousands of rooms and several hundred thousand square feet of meeting space.
The study said that due to the convention center expansion, annual room nights at local properties would rise from an average of 773,000 before construction began to at least 998,000.
Annual convention center attendance is projected to grow from 980,000 to at least 1.2 million.
Now the dollars really start to disperse.
The study showed average annual spending from convention center events would rise from $610 million to $780 million.
CBRE Hotels forecasts average daily hotel room rates on the Anaheim/Santa Ana MSA axis will rise $3 to $5 a year through 2021.
The take for the hotel room night increase is less than $200 million a year. The spending and attendance increases are reflected in the restaurant and ride-sharing sectors and all the rest.
For Afters
Meetings management software-as-a-service provider Cvent Inc. in Tysons Corner, Va., said on its website that daily meals here average $64 and car rental about $96 a week; studies of ride-sharing rates and driver earnings peg the average local Lyft or Uber trip at about $15.
Entertainment and shopping weren’t tracked. B2B work—producing and building a show from the carpeted concrete on up—also adds to the ancillary numbers.
Finally, destination marketing groups and others highlight different categories of spending by people visiting OC, and not all convention center events are about hotel rooms. Events vary on how many rooms they deliver, and in the ratios between numbers of rooms and attendees. Those who visit for events spend ancillary money, even if they come for the day only.
Visit Anaheim, for instance, puts attendance at the NAMM show that ended on Sunday at 100,000 and OC hotel rooms filled at its peak—typically the midpoint of a show—at about 9,000. The ratio of rooms to people attending wasn’t far off an Intervarsity Christian Fellowship event two weeks earlier that attracted 750 people who took about 90 rooms.
Meanwhile, a December event of Phoenix-based Milton H. Erickson Foundation—which trains mental health professionals—attracted just 7% of the number of people NAMM did but took 30% of the hotel buy the much bigger event generated.
Ancillary spending is in a position to grow in tandem with a 24% to 28% increase in events, room nights and people.
Run DMC
The destination management company rep is the phone call execs can make when something goes wrong on the four-day, 80-person, overlapping-itineraries incentive trip—with a half-day jaunt to a tucked-away winery—enjoyed at the resort they’ve never been to in a county they thought was part of Los Angeles.
It’s also the call they should make when it comes off with nary a hitch.
On the other end of the line in OC for San Diego-based AlliedPRA is Director of Events Kellie Collins. The Costa Mesa office is in the agency’s western division under Vice President Annette Gregg.
AlliedPRA’s biggest clients are “incentive houses”—companies that plan reward-focused trips for firms that don’t have internal meetings departments. It doesn’t handle travel, but “anything they do while here, between landing at the airport and taking off,” Gregg said.
“Companies from out of town don’t always know what restaurants to eat at and what to see.”
Collins also doesn’t book rooms—so AlliedPRA can work with hotels.
“That’s our second-biggest client,” she said.
It also works with trade associations.
On the incentive side, AlliedPRA helps fill OC resorts.
“That’s the fine-dining, high-budget, rewarding top” performers, she said.
On the corporate side, it’s “a Fortune 50 company that brings 8,000 people every other year to Anaheim for a sales meeting,” she said. “That’s ‘we need to get people from A to B’” several times.
It’s 100% B2B and generally larger shows.
For North OC shows, Collins often uses the Anaheim Marriott.
Plan Man
Full-Blown Events in Anaheim plans big shows, for instance, Chapman University’s commencement, and helps plan even bigger ones, including BlizzCon at the convention center.
The latter “had seven stages set up. We dealt with three of the smaller ones,” said co-founder and Vice President Dave Judy.
“Half of our jobs and events, we are in charge of everything.”
Some of the work gets into logistics and lighting, but “that’s not our main focus, and it’s not profitable,” he said.
“The sound, the video, the lighting, (for us, that’s) value-add.”
Coming Together
Behind-the-scenes work on events is done by a company like Atlanta-based Shepard Expositions Services Inc., with 10 offices in conference and trade show cities—Orlando, Chicago, Las Vegas, and so on.
Its SoCal work is run out of Ontario.
It’s an integrated general services contractor, “like a Freeman or GES,” said Chief Event Strategist Richard Anderson. “There are a lot of things we do or don’t do, depending on what the client, the show organizer, wants.”
That ranges from laying carpet and designing and building booths, to printing and marketing and audiovisual work, to supplying labor and providing logistics.
“We do have our own trucks” for that, Anderson said. And, “We’re on the dock making sure it all goes well.”
Shepard puts on shows—right here, as the saying goes.
It has convention center campus shows coming up this year for the Western Fairs Association, Keller Williams Realty, Independent College Bookstores, and a KFC franchisee association.
Companywide, it worked on 42,000 booth exhibits and 1,200 shows at 400 facilities in about 40 states in 2016.
But even such practical firms are getting into more rarefied territory, “helping clients reimagine and re-engineer” events, it said, including in emerging technologies, such as virtual and augmented realities.
Convoy
Exhibitors who want to show their stuff have two routes: virtual reality, which is gaining in use—or bring it with them.
OC, lacking the traditional trucking chops of the Inland Empire, can shine here.
At least three fleet-tracking software makers, for instance, are big in OC: Telogis Inc. in Aliso Viejo, sold to Verizon in 2016; Spireon Inc. in Irvine, with several million subscribers; and Garden Grove-based Teletrac Inc., owned by conglomerate Danaher Corp. in Washington, D.C.
Two other logistics firms active here are Freightgate Inc. in Fountain Valley and Aeronet Inc. in Irvine.
Freightgate makes software for logistics providers, including elements to “bring the cloud to trucking, maximizing” rates and routes, cargo and supply chain, said President Martin Hubert.
Aeronet is a global logistics consultant that began to offer last-mile delivery in Southern California last year. It contracts with firms to have trucks at the ready if clients need it delivered before overnight.
“You have to be able to say, ‘We can turn it around for you,’” said Business Development Director Jeff Daum.
Aeronet’s work touches meetings and events, including NAMM. Senior Vice President, International David Gibson said it works with a freight forwarder in Spain to make sure a NAMM exhibitor’s stuff clears customs and that a direct client, Cordoba Guitars in Santa Monica, gets its product to the show via Aeronet trucks.
“Directly or indirectly, we probably have work at every [convention center] show,” Gibson said.
Getting There
Rental car services, shuttle bus companies, taxis and ride-sharing firms see serious money from events.
Allen Narcisse, general manager for Lyft in SoCal, named convention center shows NAMM, Natural Products Expo in March, and VidCon in June, along with the Ohana Fest in Dana Point in September, among the busiest local shows for drivers.
It has “in the high thousands” in active drivers in OC and made a thousand trips in or out related to last year’s NAMM—part of 11% higher volume that week compared with the previous week. This year’s numbers weren’t available yet, but, “We expect a much bigger increase,” Narcisse said before this year’s show.
“That’s a big event, and NAMM has many experiences where we can help—make the parking and the transportation part of it more seamless.”
He said Lyft works with events and corporate clients—hotels, restaurants, stores, entertainment and sports venues—on signage, pickup and drop-off spots, and driver incentives for events.
Drivers for the San Francisco-based ride provider get fare percentage boosts—generally 10% to 40% but sometimes more—depending on events, areas and times of day.
In something of a full circle, the heads-in-beds people directly benefit from the ripple economic effects of meetings and events.
Twenty Four Seven Hotels works with Uber instead of running its own shuttle services.
Alison Sansone, vice president of marketing and communications for the Newport Beach-based hotel operator, said about half of its 16 properties use the service, which falls under the San Francisco-based ride provider’s Uber Central. It’s essentially a corporate account that bills the hotel for rides.
Twenty Four Seven is part of an Uber case study at a non-OC property that had been spending $7,000 a month on its own shuttle, and cut that in half using ride-share.
Shorter wait times and digital management tools are also part of what leaves customers “impressed and definitely happier” about the ride-share offering, Sansone said.
“Our GMs, they never knew what they were going to get if they called a taxi,” she said. “This is quite experimental for us, (and) we’ve never had a service complaint.”
