by M&C Staff | October 29, 2008
While both Las Vegas and Orlando have reported a drop-off in convention business this year, the Chicago Convention and Tourism Bureau says hotel room nights, the key metric the bureau uses to measure convention business, are up this year, and 2009 is shaping up to be just as strong. Room nights associated with groups at McCormick Place will reach 1.4 million this year, an increase of 200,000 compared with last year, reported Mark Theis, executive vice president of the CCTB. Meetings outside of McCormick Place will generate another 1.2 million room nights this year, according to an estimate Theis termed "conservative." Bookings for 2009 are "already at '08 levels," Theis added. However, the economic landscape is changing so quickly, "a lot of what I say might be irrelevant tomorrow," he said.

Philadelphia's hotel tax might increase from 7 to 8.2 percent in January, based on legislation that passed a City Council hearing last week. Another round of voting will take place in the next two weeks, after which it will go to Mayor Michael Nutter for approval. He is expected to sign the legislation, according to the Philadelphia Convention and Visitors Bureau. The increased revenue would help to fund the expansion of the Pennsylvania Convention Center.

A Tourism Improvement District would be created in San Francisco as part of Mayor Gavin Newsom's proposed economic stimulus package. The measure would raise hotel taxes from 14 percent to either 15 or 15.5 percent for the next 15 years, depending on where hotels fall within two geographical zones designated by the district. For the first five years, hotels in zone one would be assessed an additional 1.5 percent of gross revenue, and for the final 10 years they would be assessed 1 percent. Similarly, hotels in zone two would pay the 1 percent increase for five years, followed by a .75 percent increase the remaining 10 years. In its first year, the tax could generate $27 million, of which $9 million would be earmarked for much-needed upgrades to the Moscone Center. The remaining $18 million would fund the San Francisco Convention and Visitors Bureau's marketing budget, which was $8.2 million this year. The resolution must be approved by the 11-member Board of Supervisors, which is scheduled to review it this week; that would be followed by a vote by the involved hotels on Dec. 16. If passed, the tax will go up Jan. 1, 2009, with funds becoming available next May.

In light of public relations and economic woes facing meetings and incentives providers, some of the major associations are taking steps to champion the industry and ease member concerns. Meeting Professionals International's president and CEO Bruce MacMillan sent a letter last Wednesday to the editor of the Wall Street Journal cautioning against cancellation of meetings and events "that generate business results in both good and tough economies." He also outlined the value of the industry. Meanwhile, the Financial & Insurance Conference Planners is developing a statement that will address the importance of meetings and incentives in the marketplace, according to its executive director, Steve Bova. Earlier this month, the Incentive Marketing Association e-mailed members with a link to the Incentive Performance Center's recent white paper, "Why Incentive Programs Endure Recessions."

Smith Travel Research revised its 2008 and 2009 forecasts last Friday, as well as its projection for the U.S. Hotel industry's performance in 2010. "We are looking for things to get tougher before they get better," said Randy Smith, CEO of STR. The revised forecast for 2008 includes a 3 percent drop in average occupancy vs. 2007, to 61.2 percent, a 3.4 percent increase in the average daily rate to $107.44. For 2009, STR is projecting a further 3.5 percent decline in occupancy to 59.1 percent and a modest increase of 1 percent in the average daily rate, to $108.52. Looking ahead to 2010, STR projects a further 0.6 percent decline in occupancy to an industry average of 58.7, and a 2.1 percent increase in the average daily rate to an industry high of $110.80. PKF Hospitality Research also has revised its 2009 industry forecast, released last month, to reflect the state of the economy more accurately. Occupancy now is expected to drop by 4.4 percent; average daily rate, or ADR, essentially will be flat, with an uptick of 0.1 percent; and RevPAR will decline by 4.3 percent. "The speed and severity of the downturn in the national economy, both that which has already occurred and that which is anticipated for the year ahead, have vastly exceeded our previous expectations," said Mark Woodworth, president of PKF, in a statement. "Thus, for only the second time since the events of 9/11, we feel that a midterm update is warranted." The revised report also noted that lodging demand will fall by 1.5 percent next year, while supply will increase by 3 percent. PKF now estimates hotel profits will drop by 7.9 percent next year, compared with 2008.

In its third-quarter 2008 earnings report, Starwood Hotels & Resorts Worldwide revealed a 12 percent drop in profits. Revenue per available room (RevPAR) decreased 0.5 percent for North America but increased 3.5 percent globally. However, Starwood estimates global RevPAR will decline by 4 to 6 percent for the fourth quarter of this year. The hotel company added 35 new hotels and resorts in the 3Q 2008, representing an additional 7,553 rooms, and dropped seven properties, representing 2,445 rooms, from its global portfolio.

Airline Industry
On Friday, the International Air Transport Association released its global international travel numbers for September, revealing a 2.9 percent drop in passenger traffic. IATA director general and CEO Giovanni Bisignani said, "The deterioration in traffic is alarmingly fast-paced and widespread. We have not seen such a decline in passenger traffic since SARS in 2003." IATA's report went on to note that "capacity cuts were not able to keep pace with the fall in demand."

JetBlue Airways has opened its new home last Wednesday at John F. Kennedy International Airport in Queens, N.Y. The new Terminal 5 features 26 gates, 20 security screening lanes, free Wi-Fi Internet access, lounge-like seating, and an area dubbed "The Marketplace," which offers bars and cafes, nine full-service restaurants and 25 retail stores.

Members of Meeting Professionals International have until Nov. 19 to vote on the governance committee's recommended changes to the association's bylaws. Following a yearlong review, the committee's updates aim to clarify and streamline wording in the bylaws; eliminate references to obsolete positions or processes; ensure compliance with state law (MPI is incorporated in the state of Illinois); align MPI's governance structure with global best practices; reduce bureaucracy; and clearly define roles, responsibilities and accountability. The changes have been approved unanimously by the governance committee and by the MPI board of directors.

The Green Meeting Industry Council has launched a new website in conjunction with an updated branding initiative. The new look can be found at the old address:

For the first time, the certified meeting professional (CMP) exam will be offered during the Professional Convention Management Association's Annual Meeting, to be held Jan. 11–14 in New Orleans. In addition, the general session speakers will be humanitarian Stephen Lewis; economic analyst Jeremy Siegel; and David Brooks, a New York Times columnist. The theme for the meeting, association's 53rd, is "Convening Leaders."

Eric Allen, executive vice president of the Healthcare Convention & Exhibition Association, has been named chairman of the Convention Industry Council's newly reorganized and streamlined board. On Oct. 16, the board ratified a set of bylaw amendments that allowed for a new board structure for the organization that oversees 34 member organizations.

The Center for Exhibition Industry Research currently is conducting a study on how shows need to change in order to appeal to younger generations, as well as how to market these redesigned events. Preliminary findings will be released at the International Association of Exhibitions and Events annual meeting being held in Miami Beach, Dec. 9-11. "A graying industry has got to be our single biggest concern," said Doug Ducate, president and CEO of CEIR. The two-part generational study, based on interviews with young attendees as well as nonattendees, will cover all aspects of shows, from invitations to execution of events. Ducate expects the study to be a wake-up call for planners and suppliers. "The young are not bashful about telling us what they think," he added.

Cruise Lines
Royal Caribbean Cruises Ltd. has eliminated fuel surcharges for all bookings on Royal Caribbean International, Celebrity Cruises and Azamara Cruises made on or after Nov. 10. The company also will issue refunds (given as an onboard credit) for surcharges paid on 2009 and 2010 bookings made prior to Nov. 10. However, surcharge refunds only will be given if the price of West Texas intermediate fuel closes at $65 a barrel or less two weeks prior to the beginning of the next calendar quarter when the sailing takes place. For detailed guidelines, visit

Celebrity Cruises delivered its newest ship, the Celebrity Solstice, last Friday in Eemshaven, Netherlands. The 1,425-stateroom ship will begin sailing from Fort Lauderdale, to the Eastern Caribbean in November, and from Rome throughout the Mediterranean in spring 2009. The ship's highlights include a half-acre grass lawn and a glass-blowing show from the Corning Museum of Glass. The ship is part of the cruise line's new Solstice class, which will add four more new ships by 2012.

The Puerta Maya Cruise Center, operated by Carnival Corp., reopened Oct. 21 on the island of Cozumel. The new pier, built to withstand a Category 5 hurricane, was constructed in response to the extensive damage Hurricane Wilma caused in 2005. The new structure includes two berths and a shopping complex and is being unveiled along with new sustainability programs sponsored by Cozumel and Carnival. Among these programs are environmental education programs for local school children and new snorkeling guidelines designed to protect the reef.

Delaware North, a Buffalo, N.Y.-based developer, has been chosen to build a casino and conference center at the Aqueduct Racetrack in Jamaica, Queens, N.Y. Features of the complex include a 185,000-square-foot gambling floor, 4,500 video gambling terminals, several restaurants, a minimum of 300 hotel rooms and a 60,000-square-foot conference center. A groundbreaking is scheduled for early 2009; the project will be completed in several phases over five years.

Last week the 453-room Westin Book-Cadillac in downtown Detroit celebrated its reopening after a $200 million restoration. The hotel, which had been shuttered for nearly 25 years, now offers 30,000 square feet of meeting space, including a 7,600-square-foot ballroom; a day spa; a lobby-level bar; and a signature restaurant, Roast, from chef Michael Symon.

MeetingMatrix International, provider of room-diagramming software, has released MeetingMatrix LIVE!, a collection of web services to be used with the company's original application. The new services allow venues and planners to access layouts online and streamline web-based communication among the parties involved.

Trade Shows
GES Exposition Services had a record third quarter, with revenue up 34 percent to more than $200 million, compared with a year ago. The marked improvement was "driven by very strong performance on some major rotating shows," according to Paul Dykstra, president and CEO of Viad, GES's parent company. The fourth quarter does not look as strong, according to Dykstra.

The E3 Expo for the video game industry once again will be held at the Los Angeles Convention Center, June 2-4, 2009, and will be open to a wider audience than it has the past two years. The Entertainment Software Association, which produces the show with IDG World Expo, has had trouble finding a satisfying formula for the event in recent years. In 2007, the ESA experimented with making it a media-only event spread across multiple hotel properties, a response to complaints by exhibitors about the quality of attendees and the expenses they were incurring on elaborate exhibit booths. This year, the event was moved back to the convention center, but attendance still was restricted. For 2009, organizers plan to open up the event to more media, retailers, developers, analysts and other industry professionals, but they want to keep the show a business event. LA Inc., the city's convention and visitors bureau, estimates the show will generate 33,000 room nights and $18 million in economic impact.

According to the Seattle Times, the city wants to redirect 1 percent of its 7 percent hotel tax to help pay for a renovation of KeyArena, where the Seattle Sonics NBA basketball team played until last season. (The team has relocated to Oklahoma City.) By sprucing up the facility, the city hopes to attract another NBA team. If the tax monies are diverted, the Washington State Trade & Convention Center would get only 6 percent of the levy.

The Grimaldi Forum Monaco, the principality's main convention venue, has achieved the International Organization for Standardization's 14001:2004 environmental-management certification. The certification is based on the facility's ability to meet "green" standards that include having an environmental policy, training staff and monitoring environmental impacts.