The biggest challenges exhibition and convention centres around the world are facing are competition, adaptation and relevance. While these are all linked in many respects, they each need to be addressed with very specific strategies, and that’s a big part of what centre managers are doing these days..
There has been tremendous growth in the centre product in recent years, through both new entries into the market and the renovation and expansion of existing facilities. The result is clients have a lot more choice and centres have to compete harder for their business. Ironically this growth continued right through the recent economic recession, largely because of projects that were already underway along with the fact that many governments saw convention facilities as a way of accessing the many benefits the industry offers.
Today we have what is essentially a buyer’s market, which means organisers and those acting on their behalf can and do negotiate hard, and in many parts of the world look for incentives and discounts beyond anything we’ve seen in the past. That means everyone needs to work a little harder and find new ways to distinguish themselves from their competitors. It also means centres that can’t deliver a high quality product are finding it tougher to attract business because there are many good alternatives.
It’s not just the venues that are raising their game
Events today are constantly evolving in terms of formats, technology and delegate expectations and centres need to be able to respond to this, often within the constraints of a fixed set of spaces. The key to success is increasingly an ability to create flexibility in both facilities and services that can respond to new demands.
At the same time, business practices are also changing rapidly in ways that create different sets of relationships and approaches to booking and delivering events. For example, time frames in the booking cycle have shortened dramatically in some cases and traditional methods of booking accommodation have shifted in the face of online alternatives. All these factors impact things like business projections and market strategies and place new demands on centre staff who again need to adapt in order to compete successfully.
Eighty per cent of centres today are owned by some level of government – and governments have been under significant pressures arising from the financial crisis and the economic recession of recent years. That has put downward pressure on centre revenues at the same time that many governments are challenged in their own finances – which means that the ‘pure’ economic rationale based on incremental visitor spending often isn’t enough to justify ongoing investment.
The answer of course is that centres aren’t just about generating visitor spending – they’re more about what events can do for a destination, from creating broad economic impact to facilitating knowledge transfer and attracting new investment. This means centres need to do a much better job of underlining their broader role in supporting community development policies and demonstrating how they are helping respond to today’s most urgent government priorities, and many are doing just that.
Location decisions are the result of a range of factors including both venue and destination matters. If any one of these is not acceptable it can result in a loss of business, as planners need the full “package” of features in order for their event to be a success. In terms of the venue, key issues are the size, configuration and flexibility of space, available services, cost and management reputation.
For the destination, issues such as the quantity and quality of available accommodation, safety and security, ease of access, overall cost structure and attractiveness to delegates are most important. Two rapidly emerging factors for centres in recent years have been technology and connectivity (to respond to growing delegate communications expectations) and the quality of the experience offered in both the centre itself and the immediately surrounding area, as many delegates spend the bulk of their time in and around the facility. Centres that can respond to these factors have a better shot at the available business.
Recovery, reformatting and intensified competition
No one knows exactly what the future will bring, but there are a number of things we can expect just on the basis of where trends are leading now. First, our business clearly tracks the state of the economy, so as the latter improves, so will our own business activity. However, there will be a lot of variability around the world depending on the differences in rates of economic development, which are very pronounced these days.
Secondly, as with most other sectors, our business in the future will not be the same as in the past. Content, formats and technology will be very different, as will what exactly delegates expect to get out of their experience, and we will have to learn how to adapt and respond to these in order to continue to be seen as a preferred means for interaction.
Third, competition will remain intense. That means everyone needs to work a little harder and find new ways to distinguish themselves from their competitors. It also means that centres that can’t deliver a high quality product will find it tougher to attract business because there are so many good alternatives.
Finally, we need to respond to the fact that we may be facing any number of unknowns, and be ready for that. This means not just creating more flexible facilities and services but also adopting a now kind of attitude toward change as something that is to be expected rather than avoided.
As the industry continues to evolve, so will the needs that centres have for programs and tools that help them respond effectively. AIPC will continue to monitor changing conditions and expectations and develop new ways that members can not only access useful resources but also interact more effectively with one another to benefit of the world of experience amongst our membership.
Geoff Donaghy is AIPC President, Director Convention Centres at AEG Ogden and ICC Sydney CEO.
This was first published in issue 75 of CMW. Any comments? Email cmw@mashmedia.net
