Ellen Cardwell, meetings manager for the
Washington D.C.-based Ecological Society of America, faced
a tough choice when booking the ESA’s 2006 annual meeting.
Sure, San Antonio is a beautiful city, but the convention center
was asking for $121,000 in rental fees. Memphis, Tenn., on the
other hand, was charging only $26,500. But wouldn’t the group
prefer San Antonio? Cardwell’s boss thought so. Then Memphis came
back with a pledge of $15,000 to cover shuttle buses.
Able to offset the rental fee with the shuttle bus inducement,
Cardwell calculated the ESA could hold its 3,000-person convention
for $11,500 less than a tenth of what they would spend in San
Antonio. Memphis it was.
“Normally, it is the whole package for us,” says Cardwell, who
recently chose Portland, Ore., as the site of the 2004 annual
convention, based partly on attendees’ fondness for gourmet coffee
and microbrews. “But price can be a deal breaker,” she adds.
Or, from Memphis’ point of view, a deal maker. Cardwell’s case
is just one example of the lengths cities will go to in order to
lure convention business in an increasingly competitive market.
These include finding new ways to bring costs down, shaking up
sales responsibilities and contracting with private marketing
companies to bolster their efforts.
Such strategies are changing the way meeting planners do
business and how they make destination decisions.
In San Jose, Calif., where economic woes have been
worsened by the dot-com meltdown, the city is hoping to turn things
around by changing the way it markets the McEnery Convention
Center. In October, the city council unanimously approved a new
pricing structure that is drawing raves from planners booking
events in Silicon Valley.
Under the new policy, the city’s director of conventions, arts
and entertainment is permitted to reduce facility fees by more than
50 percent of established rates or even to waive the fees
altogether. Also, the director can cut the facility’s parking
garage rates, which can be as high as $20 a day for an in/out
The San Jose Convention and Visitors Bureau also was granted the
power to offer planners lower prices, based on factors such as
multiple event commitments, revenue history and event dates.
Prior to these changes, facility fee reductions were capped at
50 percent, and there was no wiggle room on garage rates,
handcuffing the city’s ability to compete.
Sue Davis, director of special events at the Bellingham,
Wash.-based International Society for Optical Engineering, applauds
the moves. “I’ve gone back to the bureau and asked them to come up
with a proposal based on this new mandate from the city
Davis, who has been holding events in the McEnery Center since
the late ’80s, expects the new policy will save her organization up
to $50,000 in annual rental fees. That degree of savings, she says,
could enable her to upgrade a reception, add an F&B event or,
best of all, avoid hiking registration fees.
This is the kind of response San Jose was aiming for. By
reducing the rental rate often a group’s largest expenditure, with
the possible exception of food and beverage the city is able to
appeal to planners saddled with budget problems and growing
concerns about returns on investment.
“Typically, with the public sector, the ability to be flexible
with pricing hasn’t been there,” says Dan Fenton, president and CEO
of the San Jose CVB. “Colleagues say this has to be the
In some cases, that future already has arrived. Davis recalls
being offered a rental-fee waiver from one major East Coast city as
well as heavily discounted fees at other major cities in
Anaheim/Orange County Visitor and Convention Bureau president
Charles Ahlers confirms such reductions have grown common in recent
years, especially on the West Coast, where competition among
convention cities has grown fierce. Recently, he says, his
convention center adjusted its pricing structure by doubling the
amount of meeting space offered for the same rent.
“A lot of destinations literally are giving away space to
attract business,” Ahlers says. “But I don’t think that can last.
As soon as the economy picks up, a lot of those deals will go
away.” Still, Ahlers thinks price cuts are here to stay.
That’s a strategy under consideration in Portland, Ore., where
city officials recently commissioned a study to determine if they
should drastically reduce or even waive rental fees. But
Chicago-based CH Johnson Consulting concluded that steep rate cuts
are a last resort and a move to be avoided. Instead, the report
recommended offering planners tax breaks to help them offset costs
“There’s a lot a building can do besides a formal rent
reduction,” insists Charles H. Johnson, president of the consulting
firm. “They can waive the charge for a move-in day or be lenient in
how they charge for square footage. There’s plenty of wiggle room
that doesn’t pertain to the rental rate itself.”