Larger convention groups getting incentives
A growing trend in the convention market is for larger groups to demand more incentives, even cash, observers say.
But it’s a trend the industry brought on itself by overbuilding, according to some recent reports.
The larger convention markets have been hiring consultants telling them that business will inevitably grow if they build larger centers.
Two reports released earlier this year — one from the hospitality consulting firm HVS International and another by the Brookings Institute — question the US industry’s ability to absorb the nearly 5 million square feet of additional exhibition space that new centers or expansions are scheduled to bring by the end of 2007.
The projects include expansions in major markets such as New Orleans and Orlando, as well as in second-tier, suburban and resort markets hoping to capture a share of the business.
The cut throat competition was evident in Atlanta recently when the National Association of Home Builders, the city’s biggest convention, cancelled shows planned for 2007 and 2008. The city offered the homebuilders $2 million to keep the show there, but the offer was turned down.
Such incentives may be even more common in the future, say industry observers.
Report by David Wilkening
David
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