San Diego's Meetings Industry
By Joanne DiBona
Convention and meeting destinations across the nation are facing major challenges as they cope with an ever-changing consumer marketplace and a 3-year decline in business travel.
The reasons for the decline are multifold. The meetings market has been hard hit by the recession, the events of 9/11, uneven economic recovery, a declining stock market and corporate accounting scandals. As a result, corporate America’s profit crunch has forced businesses to slash their discretionary spending, especially for travel and entertainment.
The decision on whether or not to attend a convention or meeting is also no longer easy for the company employee. Factors such as time away from the office, time away from home and loved ones and the psychological negatives involved in air travel play a major role in decision-making. Also, lifestyle shifts, including the fact that 62% of the nation’s mothers now work, also factor into the equation. It is no longer a simple decision.
As a result of these major impacts, the meetings industry is in a state of turmoil. Nationwide, the number of meetings being held and the overall attendance is down. According to the Travel Industry Association of America (TIA), business travel saw a -9% decrease between January and June, 2002 compared to 2001 activity. Meetings are being held closer to home, with many companies selecting teleconferencing and other alternatives as an option.
Developing Trends
Furthermore, a trend towards “last minute” is developing. Organizations are deciding last minute whether to have their meeting or not. Meeting planners are dealing with last-minute management decisions, reduced staffs and increased workloads. Use of third-party planners continues to rise, thus filling in the “time poverty” gap being experienced by overworked company planners.
If they do hit the road, many business travelers are making certain they get the most bang for their travel buck. “Multicity business trips” have become a useful way to take care of business while cutting corporate travel costs. Companies are advising their staff to attend multiple meetings, visit more clients and even extend trips over the weekend to take advantage of lower fares and hotel rates. They are also encouraging employees to book on-line--with the result that business travelers are now acting more like leisure travelers than ever before.
The slow-down has also hit the larger convention and trade show business, with delegate attendance at such meetings down as much as 25% nationally. Currently, there are 397 convention facilities in North America with 93 centers being expanded or being built.
There is no question that the dramatic changes taking place in the convention and meeting industry have also had an impact on our local market. However, San Diego is faring better than many convention destinations, owing in part to our strong cross-over appeal as a premiere travel destination with good hotel facilities and variety of activities—as well as a premiere, expanded convention center.
San Diego Convention Center
The expansion of the San Diego Convention Center could not have come at a better time. By doubling the exhibit space available to convention groups, San Diego was finally able to tap into a convention market that was formerly out of reach. This new market is infusing our local economy with millions of dollars—dollars that would not have been spent here had it not been for the center’s expansion.
For years, we had been hearing from convention planners that their groups would love to consider San Diego as a convention site, but our center was simply not big enough to accommodate the larger conventions and trade shows that dominate the market. This is no longer the case, and the numbers tell the story: more than 700,000 definite room nights are on the books for 2003, a 24% increase compared to 2002 figures.
The expansion also makes it feasible to book two or more conventions simultaneously in the center, even when move-in and out dates overlap. In the past, a group could only move into the exhibit space once the hall was completely vacated, but the additional space now allows for more creative booking options.
We are also now in the position to attract a greater market share of trade shows and consumer shows (such as the popular auto and boat shows) that would never have been able to hold their ever-expanding exhibits in San Diego without the additional square footage.
Despite the fact that our expanded center is the 20th largest in the nation, we already have earned the distinction of being among the top ten most active centers in the country. According to a recent report by the Center for Exhibition Industry Research, 16 cities hosted nearly half of all exhibitions in North America with San Diego ranking ninth, beating out the centers in Washington D.C., San Francisco, Anaheim, and Boston.
San Diego is also becoming a major hub for medical meetings in the United States. Attendees at medical meetings soared from 80,550 delegates in FY01 to a staggering 126,600 attendees in FY03, a +57 percent increase. Some 40 medical-related shows are on the books through 2003. Because of their economic resilience and steady growth, medical meetings are one of the most sought-after markets in the convention business.
There is no doubt that the San Diego Convention Center will continue to serve as a powerful economic engine for our region in a time when it is more critical than ever before. The appreciable business it will generate this winter and in future years will help buoy our visitor industry as we struggle along with the rest of the nation to return to pre-9/11 tourism levels.
Hotel Meetings
San Diego is facing a greater challenge in the hotel meetings market because of a variety of factors, the primary one being the overall decline in business travel due to the reasons outlined earlier. In addition, other meeting destinations are competing fiercely by dropping rates and adding incentives to secure business. San Diego’s top competitors include Las Vegas, Anaheim, and Phoenix; we also compete with other top tier destinations including San Francisco, Hawaii and Orlando.
Limited air service to San Diego continues to be an issue for meeting planners, especially in the evaluation of the time and cost to get attendees to the destination.
On a positive note, the San Diego Convention & Visitors Bureau (ConVis) has long recognized the need to target specific markets when seeking meetings business, and this approach is more critical now than ever before. While our primary customers are meeting planners representing state, regional and national associations and corporations, we reach out to specialty markets including incentive travel, sports, military, social, fraternal and multicultural groups.
Our branding campaign has also helped immeasurably in creating top-of-mind awareness of San Diego among time-starved meeting planners. Faced with information overload on a daily basis, these planners are ready to reach out to a proven brand that they know and trust. Through branded advertisements and other promotions directed at meeting planners, ConVis reinforces the fact that San Diego--with its unique blend of first-rate facilities and an unparalleled lifestyle-- spells ‘success’ every time.
ConVis is also developing a comprehensive, value-packed packaging campaign directed to the meetings market that would entice delegates, and their families, to enjoy a few extra days in San Diego either before or after their meetings. In addition, ConVis sales staff will continue to use direct sales, trade shows, client events, trade advertising, e-mail, direct mail and public relations to reach target audiences.
Despite the major challenges confronting the meetings industry, there is a silver lining. Nothing can replace the power of face-to-face interaction. Many analysts predict that there will be pent-up demand in key sectors for business and group travel as companies look to stimulate sales, train associates and create new networking opportunities. Included in these sectors are defense, homeland security, assisted living and biotech. In addition, growth is predicted in specialty markets due to shifts in ethnic composition (multicultural groups) and an increase in the accessible (disabled) population.
