Forty-four cities in the United States are in the process of building or expanding convention centers, creating a supply that is quickly surpassing the demand for convention space, according to a recent report.
The Providence Warwick Convention and Visitors Bureau, which markets the Rhode Island Convention Center under contract by the state, is wrapping up market research and preparing to roll out a new, more aggressive Web-based marketing campaign in April to compete with the new competition.
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About 34 cities have expanded existing convention centers and 19 cities have built new convention centers in the past five years – including nearby Hartford and Boston – giving the Rhode Island Convention Center some serious competition.
Research conducted by the Brookings Institute released last month called “Space Available: The Realities of Convention Centers as Economic Development Strategy” reports that though convention business is considered easy money for states, people aren’t booking enough convention meetings and events to merit the recent boom in supply.
The amount of exhibit space has jumped 51 percent since 1990, to 60.9 million square feet from 40.4 million and as much as 7 million more square feet will be added. That would come from 22 cities that have expansions planned or under way; another 22 have new convention centers planned or under construction.
Over the past 10 years, public spending on convention centers has doubled to $2.4 billion a year and space has increased over 50 percent in the past 15 years, the report by Heywood Sanders, a critic of public spending for convention centers, shows.
The report shows between 10 percent and 20 percent fewer people were attending conventions and trade shows after Sept. 11, and attendance at the top 200 trade and convention shows declined from 5.08 million in 1996 to 4.08 million in 2003, Tradeshow Week reports.
Though there is a national decline, not all areas are operating at a loss, said Robert V. Canton, director of hospitality and leisure practice for PricewaterhouseCoopers.
“National trends don’t reflect the situation in every city. The hotel industry is down as a whole, but hotels are being built in areas where there is a demand,” Canton said. “There should be concern about the new convention centers depending on the competitive area; should Las Vegas worry about the new convention center in Hartford? No, but Rhode Island should.”
Providence competes for convention and trade show business in the eastern region of the United States.
The $300 million state-funded Connecticut Convention Center being developed on the easternmost edge of downtown Hartford is scheduled to open in June along with a 409-room Marriott Hotel. The 500,000-square-foot facility with 145,000 square feet of exhibition space is expected to market the same events as the Rhode Island Convention Center.
With slightly more convention space and more hotel rooms offered at lower rates, Hartford will be a serious rival to the convention center in Providence.
Providence’s attributes – the Providence Place mall, restaurants, entertainment and transportation options within walking distance to the Rhode Island Convention Center – will keep the area competitive and as more hotels are added in the city, rates may drop, said Brian Whiting, president and CEO of the Providence convention and visitors bureau.
“Keeping your head above water in a market oversaturated with supply of the product you sell can be challenging … but the strategic development decisions Providence has made to make this a tourist destination makes us attractive,” said Whiting.
The Rhode Island Convention Center will also contend with the new 1.7-million-square-foot Boston Convention & Exhibition Center, which opened in June 2004. It is the largest exhibit space in the Northeast and mid-Atlantic states – boasting enough space to hold 16 NFL games at once, though that center will go after events larger than those accommodated in Rhode Island.
The Hynes Convention Center in Boston is a closer competitor to the Rhode Island Convention Center because, like Rhode Island, it is only 15 minutes from an airport and has 193,000 square feet of exhibit space, 71,644 square feet of meeting rooms and a 25,000-square-foot ballroom.
The Rhode Island Convention Center has 137,000 square feet of exhibit space, a 100,000-square-foot exhibit hall, and a 20,000-square-foot ballroom.
In the competitive environment, cities across the country are adding convention space, hotels and lowering rates.
