News for the Hospitality Executive
|By Mark Belko, Pittsburgh Post-Gazette
Knight Ridder/Tribune Business News
Feb. 2, 2004 - Omaha, Nebraska, is going after the convention business in a big way.
There's the new $300 million convention center on the banks of the Missouri River with an attached 17,000-seat sports arena, offering groups, organizations and trade shows a whopping 1 million square feet of space.
Nearby is a new 450-room headquarters hotel, the Hilton Omaha, scheduled to open this spring, connected to the convention center by a 200-foot glass-enclosed sky bridge.
Look out, Vegas. Take note, Orlando. Omaha is ready to play.
"The whole world is our oyster," said Kathy Rosene, senior convention sales manager for the Greater Omaha Convention and Visitors Bureau. "There's not anyone we won't go up against."
If you spent any time with Rosene in the exhibit hall of the David L. Lawrence Convention Center last week, you would know that Omaha has great steaks, is the home town of billionaire Warren Buffett and was the city in which Microsoft's Bill Gates bought his wife's engagement ring, at Buffett's recommendation.
There's also something else you would learn from Rosene and other exhibitors in town for the Religious Conference Management Association conference -- the competition for business is fierce.
"It's tough," Rosene said. "Every city is either building a new convention center or expanding."
Or going after the same business.
A walk around last week's exhibit area will tell you as much. A virtual candy store for convention shoppers, city after city -- 160 cities or conference centers in all -- pitched their strengths, quirks and space to woo future customers.
There were warm weather havens like Fort Lauderdale, Daytona Beach, Miami, Tucson, Phoenix, San Diego, Jamaica and the Bahamas -- all tempting with the temperatures outside in the teens.
There were the big cities -- Chicago, Denver, Detroit, Atlanta, New Orleans, Los Angeles among them. And there was everybody in between -- dozens of them -- from Sioux Falls to South Bend, Baton Rouge to Boise.
And with the downturn in the economy, cuts in corporate travel and the lingering effects from Sept. 11, the battle for tourist dollars seems to be boiling over.
Larger cities are now going after smaller conventions they would have ignored in the past. Smaller cities are upgrading their space and facilities in hopes of landing larger conventions.
"I've never worked harder to get business," said Kelli Donahoe, a 16-year industry veteran and national sales manager for the San Jose Convention and Visitors Bureau. "Everybody's getting bigger; we're getting smaller."
To compete, San Jose has developed a "flexible pricing" policy in which it offers hotel room rebates up to 50 percent or subsidies to groups that book conventions. It seems to be working.
"Right now, our phones are ringing more than they ever have," Donahoe said. The use of incentives, rebates, and other perks, such as free space at largely publicly funded convention centers, to lure business is becoming more and more common.
During their four-day stay in Pittsburgh last week, RCMA delegates, for example, were treated to the Tony Award-winning musical "The Lion King" at the Benedum, an opening-night reception at the Carnegie Museum of Natural History, and a huge banquet at the Pittsburgh Hilton and Towers -- all arranged in hopes of leaving a positive impression and generating more business.
"I think this is becoming a very increasing trend because of the competition," said Linda Milan, representing Knoxville, Tenn., which opened a new convention center a year and a half ago. "You have to be more creative to get people interested in your city."
Barbara Madigan of the St. Paul Convention and Visitors Bureau said the frenzy to build or expand convention centers "is scary for a city like us."
She said a 1,000-person convention is a perfect niche for a city like St. Paul, Minn. But tourism officials there now find themselves competing against larger cities, such as neighboring Minneapolis for that piece of business.
That's one reason St. Paul officials, depending on the size of the group looking to book, will give away convention center space rather than charge rent. "We've always had the opportunity to do it but we do it a lot more now," Madigan said.
Another city looking to compete is Tulsa, Okla., which is building a 18,000-seat arena and expanding its convention center.
Heather Williams, of the Tulsa Convention and Visitors Bureau, said room rates, space rentals and transportation costs are cheap enough that officials typically don't have to offer large discounts. But there might be exceptions.
"It depends on the group. A lot of times, no, we don't. But as with all types of business, everything's negotiable," she said.
Even Atlanta, one of the country's largest convention destinations, has to work to win business these days.
"We're competing against many of the second and third tier cities we thought we'd never have to [compete against]," said Gary Spinks, of the Atlanta Convention and Visitors Bureau. "It causes us to be more creative and aggressive in our sales efforts."
Joseph McGrath, president of the Greater Pittsburgh Convention and Visitors Bureau, has been frustrated by the lack of a headquarters hotel next to the city's new convention center.
With the competition the way it is these days, he said he tries to sell Pittsburgh based on its central location, inexpensive rates, the safety and compactness of the Downtown area, a world-class airport, and, of course, the new center itself.
"Pricing is something that we sell but you have to have the product first. That's where the airport and the new convention center really help us," he said.
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