CVB Investment May Pay Off Well

June 17, 2002
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GRAND RAPIDS — It looks like a group of meat processors may help turn a $1 million annual investment into an extra yearly payout of $15 million.

The million-dollar investment is the cost of an annual marketing effort by the Convention & Visitors Bureau (CVB) to pre-sell DeVos Place, the city’s new convention center—a building that is set to officially open for business in January 2005.

The extra $15 million is what the bureau thinks the annual return will be from that investment.

And the meat processors? Well, they just happen to be the very first signed-on-the-dotted-line outcome of the CVB’s promotional effort.

In July 2004, the American Meat Processors Association will hold the inaugural major convention in the new $230 million structure named after Richard and Helen DeVos.

Close to 1,500 meat processors will unofficially christen the new building, account for almost 2,400 room-nights downtown, and spend nearly $700,000 here over a matter of days — a full seven months before the final DeVos Place bolt is tightened.

The meat processors may be the first, but they aren’t the only, as the CVB owns bragging rights to a half-dozen other pre-opening major bookings.

“The good news is that, while DeVos Place is still a construction site, we’ve already booked $14 million in convention business, with contracts extending out as far as 2007,” said CVB President Steve Wilson at a recent Grand Rapids Rotary Club luncheon.

Wilson told the audience that normally meeting planners take a wait-and-see attitude before committing to a new building. But here, he added, that wasn’t the case.

“The Midwest woodworking show and the Michigan Vegetable Growers are making every effort to be the first groups in the new exhibit hall, prior to it opening, in December 2003,” he said. “The good news is construction is running on schedule or better, so I am certain we’ll be able to accommodate these groups.”

Grand Action co-chairman David Frey reported that at least 20 convention centers were being built or expanded in North America now, and most of that construction was going on in cities the size of Grand Rapids. Wilson remarked that the new building has brought his bureau new competition.

“When we’ve competed for this business, we’ve gone head-to-head with much larger cities. Today our competition is no longer only Detroit and Lansing. We frequently are vying for business with the likes of Indianapolis, St. Louis, Columbus and Minneapolis.”

Wilson said in the last six months, more than two dozen national conventions have come here to take a closer look at the building, the hotels and the community. So far, he said, the bureau has more than $26 million pending in new business, a jump of 84 percent over the same period last year.

In all, Wilson estimated that DeVos Place would contribute more than $105 million in visitor spending to the West Michigan economy.

“It’s a fairly significant return on a $230 million investment,” said Frey of the overall cost for DeVos Place.

Grand Action co-chairman John Canepa pointed out that the actual cost to build the new convention facility would run about $180 million.

“After posing as a banker for a long time, I’m now a construction engineer,” he joked, while he detailed the square footage and costs of the building for the luncheon crowd.

The CVB marketing plan already includes local organizations, such as the city, county, Grand Action and The Right Place Program.

But Wilson and his staff have also taken it outside county borders by tying in with the Michigan Economic Development Corp. and the West Michigan Strategic Alliance. He said his CVB was currently trying to get bureaus in Holland, Muskegon, Saugatuck and Grand Haven on board.

“The plan begins with a research-driven approach fueled by a $1 million annual marketing plan. The goal of this program is to bring about a 15-to-1 return on investment. That means this exciting regional initiative will return at least $15 million in new convention and tourism business annually,” said Wilson.

And the partners and strategies of this regional plan will be known long before the meat processors arrive.

“We intend to share the results of our research and details of the marketing plan by the end of September,” he said.           

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