Meeting Industry Turning To Smaller Markets

May 14, 2002
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GRAND RAPIDS — The nation’s major markets are still experiencing a high number of meeting cancellations after the terrorist attacks in September, but not quite as many as earlier this year. The fallout from those deletions is that business may pick up for second-tier cities.

The attacks on New York and the nation’s capital have made planners more cautious in their decision-making on when and where to hold their trade shows and conventions. Their caution has raised the competitive levels of those who host meetings, which, in turn, has transformed the industry into a buyer’s market.

“Never have I seen this industry in as competitive of a state as it is in now,” said Peter Hyland, president and CEO of The Hyland Group, the consultant for the local Convention and Visitors Bureau (CVB).

“A week does not go by that we don’t have a couple of hotel chains, conventions and visitors bureaus in town doing sales blitzes and promotional events. The Washington, D.C., and Chicago markets have literally been under siege since the beginning of the year,” said Hyland in a recent appearance before the Convention and Arena Authority.

The Hyland Group was formed in 1985 and represents nine cities and 25 hotel chains across North America from its offices in Arlington, Va., and Chicago.

“The events of Sept. 11 and a weakened economy has taken competition to new levels,” he added. “We haven’t seen anything like it and the feedback from our customers is they haven’t either.”

As a result, Hyland said room rates have fallen across the nation, even in some of the country’s most active meeting centers. For example, he said the per-night rate in a popular New York City hotel had dropped to the mid-$200 range — once a price that only hotel employees were offered.

“We’re seeing that happen in Chicago, in San Francisco and in Washington.”

Hyland said first-tier convention cities are losing their grip on the market partly because of concerns from planners over security. But he added that second-tiers were gaining market share because cities like Grand Rapids were improving the quality of their product.

“The second-tier cities are spending a tremendous amount of money developing the downtown core, expanding their convention centers, and they’re spending a lot of money on advertising,” he said. “And meeting planners are hearing them.”

Hyland remarked that convention buyers want convenience, value and a user-friendly meeting place. But he noted what they didn’t want was at least equally important, and that is risk — something that more secure second-tier cities have less of.

The Hyland Group began working with the CVB in February of last year. Hyland said his goal is to produce 25,000 room nights a year for the city. So far his firm has generated 51 leads worth 92,340 potential room nights. Of those, 49,360 are still pending, 7,200 have been confirmed and another 12,000 are on the sales bubble.

Hyland told board members that his sales staff has confidence in selling the city, and that sales would accelerate once DeVos Hall is completed.

As for what draws meeting planners here, Hyland primarily felt that the city was priced well and offered good value. The size of the new exhibit hall, 160,000 square feet, will also be an attraction for planners once the building opens.

“We’ve made substantial progress over the last 16 months. We’ve developed a good working chemistry with the bureau. But we still have challenges. We have lost 38,510 room nights, and we lose business for a variety of reasons,” said Hyland.

“But if you look at all the different reasons, it really comes down to a lack of awareness about Grand Rapids. That’s the key for us,” he added. “We’ve got to get them up here to see the city. The city showcases well.”   BJ

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