The 'Festivalization' of Events

How mega-gatherings have transformed cities and redefined the conference model

2017 SXSW Mark Kelley Roots

The 2017 SXSW (pictured), held in March in Austin, Texas, had all the buzzworthy touches this mega-event is famous for, including a performance by Mark Kelley and The Roots.

From the blurb in the conference brochure, the event promised to be a cross between Cirque du Soleil and a Silicon Valley boot camp. There would be rappers and performance artists to entertain, light displays to stimulate the senses. "Thought sessions" engaging the audience would replace stodgy lectures from the podium. Aspiring tech tycoons would get a shot at pitching their startups. "Chaos, but in a good way," was how one organizer summed up the vibe.

If you're thinking this must be Austin's iconic South by Southwest confab, guess again: This was the Murmuration Festival in St. Louis, which debuted last September in the city's budding tech quarter. For three days, more than 10,000 attendees got a condensed version of that noisier and longer extravaganza to the south, with the requisite mix of performances showcasing regional talent along with a roster of high-level tech-industry speakers. Corporate sponsors from the St. Louis area were prominently featured, and their support paid off: To boost attendance, a number of events were free.

Brian Hall, chief marketing officer of Explore St. Louis, says a main goal of the event was to showcase St. Louis' budding Cortex Innovation District, one of numerous "Silicon Alleys" cropping up in cities that can offer a less-expensive alternative to the California namesake. It also gave valuable exposure to what St. Louis has to offer meeting organizers. "This was very good for the St. Louis brand," Hall says. "We called attention to how affordable our destination is, for both meeting planners and attendees."

What's been dubbed the "festivalization" of meetings is not necessarily a new phenomenon, but in the last few years the trend has increased, with more than two dozen of these mash-ups held annually around the U.S. and Canada (for a list of some of the biggest, including one in London, click here). Attendance can easily hit the mid five figures and even top 100,000 on occasion. And the trend works both ways: Some events that started out as a music or film festival have added a tech or innovation conference, which can reel in higher-paying corporate attendees and sponsors. Others tack on a festival to inject new energy into an already established conference.

The Gathering, an annual brand confab, appended a music festival to the agenda at its most recent iteration, held in Banff, Alberta. The Collision Conference in New Orleans, which in two years has grown to 20,000 attendees from the tech and media worlds, took this a step further: This year, the business meeting was held over a weekend, sandwiched between two Jazz Fest events, a move that encouraged delegates to extend their stay in the city.

Even a single-night event such as the Grammy Awards can morph into conferences: After decamping from New York some 15 years ago, the Grammys have turned into a week long series of business sessions and related events in and around Los Angeles (although music's top event is set to make a return visit to the Big Apple in 2018).

But it's not just the monster events that are glomming onto the concept; organizers of smaller conferences are betting that a fizzy mix of business-networking opportunities and cutting-edge entertainment will draw attendees who might otherwise skip another boring-sounding convention. That's raising the larger question: Do conferences now have to be more like festivals to compete for conferees? Do even mid-size and smaller meetings need to jazz up their programs with musical talent and film screenings to stay relevant?

"This all comes down to knowing your audience," says Joan Eisenstodt, of Eisenstodt Associates, a Washington, D.C., meeting planning consultant, who agrees that the festivalization fad has prompted many an organizer to take a fresh look at the traditional conference agenda. Bringing in entertainment and other services outside the usual menu of offerings might require a different skill set, she notes. "You may need to tap another kind of expertise in an unfamiliar field," she says, adding that the extra effort might not advance the overall goals of that event. "Remember not long ago when we were all throwing lasers at people?" she jokes. "To add something just because it's cool doesn't mean anything  to many of today's attendees."

FIVE big EVENTS in 2017
1. SXSW
March 10-19, Austin, Texas
Estimated attendance: 100,000+
Headliner: Former U.S. vice president Joe Biden


2. Collision Conference
May 2-4, New Orleans
Estimated attendance: 20,000+
Headliner: Musician/philanthropist Wyclef Jean


3. C2 Montreal
May 23-25
Estimated attendance: 5,000+
Headliner: Apple co-founder Steve Wozniak


4. TED Conference
April 24-28, Vancouver, British Columbia
Estimated attendance: 2,000
Headliner: Tesla and Space X founder Elon Musk


5. London TechWeek
June 12-16
Estimated attendance: 30,000+
Headliner: Dinner hosted by Prince Charles' Prince's Trust


THE 'SOUTHWEST EFFECT'
"There are many cities that would like to ask, 'What is our South By...?'" says Henry Harteveldt, founder and travel analyst at Atmosphere Research in San Francisco. "What's an event that could truly raise the city's profile?"

To be sure, the destination organizations that back these events can reap substantial rewards -- but at first it might require a leap of faith. SXSW got its start 30 years ago with a grant from the Austin Convention and Visitors Bureau, and in the decades since, the connection between the two groups has grown even tighter. In 2016, the conference drew over 90,000 registrants and untold other visitors who contributed $325 million to the local economy, including $1.8 million in hotel occupancy taxes, most of which went directly to the convention center.

Austin's civic leaders are unabashedly bullish on the impact of this business-cum-festival formula. "It has helped define Austin as a center of creativity and commerce," says Michael Rollins, president of the Austin Chamber of Commerce. The benefits extend well beyond the now three-week event, creating skilled jobs and pouring investment into hotel construction, airport expansion and other infrastructure improvements. However, such a mega event also can have unintended effects (see "No Room at the Inn").

SXSW initially flew under the radar, gaining little traction beyond a cult following of music and barbecue devotees. The turning point came after the late 1990s, as the decade's tech boom began to transform the Texas capital, prompting the festival leaders to add an interactive conference and trade show.

"That really put them on a different trajectory, because it added a larger corporate element to the conference," says Ben Loftsgaarden of Greyhill Advisors in Austin, a site selection and economic development consultant. "Before, it was more of a fringe experience, then it became more of a business-related conference," he adds, noting that SXSW spans dozens of venues around the city, and is sprouting dozens of break-out events on topics ranging from gaming to health and medicine.


BAD VIBES
Austin has experienced growing pains, too, with strains on its lodging and transportation networks as the tech and innovation boom helped by SXSW brings permanent growth. According to a 2015 report by the U.S. Census Bureau, Austin was the fastest-growing city in the country that year, and in the three previous years its population grew by 12 percent.

Even for destinations more accustomed to mass tourism, there are risks in mounting ambitious and highly hyped events, given the unforgiving glare of the blogosphere. The festival concept got a black eye recently with the much-publicized debacle of the Fyre Festival in the Bahamas, which was shut down in early May just as guests were arriving at the venue on Great Exuma island. All of the negative publicity prompted Bahamas tourism official Joy Jibrilu to issue a statement defending the state of her country's infrastructure and amenities -- and by implication, blaming incompetent organizers for its failure. The fallout went so viral that the minister had to issue a straight-faced denial of reports that suggested, among other things, that the waters around Great Exuma were infested by sharks. "It was a big belly flop of an event," says Atmosphere's Harteveldt. "The organizers clearly promised far more than they could deliver."

Of course, many of the meetings that fall under the "festivalization" category have enough gravitas and competent business management that they're not likely to go off the rails in such spectacular fashion. But the Bahamas' experience revealed some pitfalls in any large event, from the difficulties of mounting multiple stage performances to the apparent lack of adequate hotel capacity and other amenities that high-paying guests take for granted. And in big cities, the challenges can be just as complex.

New York, for example, which last year drew a record 61 million visitors, is constantly reviewing security and crowd-control procedures, according to Fred Dixon, CEO of NYC & Company. At a recent Secure Tourism summit sponsored by the U.S. Travel Association, Dixon said the city prepares for its vast roster of events by conducting drills on a regular basis. "We take that very seriously," he said, adding that there's a lot at stake: New York's reputation as the country's safest big city.

For conference organizers looking ahead at the calendar, the growth of mega-meetings can complicate planning. "There are all of these potholes in the meeting planner highway that could disrupt the flow," Harteveldt says, and he means that literally, as well: Things like road closures and the building of temporary structures can begin well in advance of the date of the event.

Typically, destination marketing organizers will ensure that those planning smaller meetings know when there's a huge event coming up at the same time, Harteveldt notes. But avoiding the time periods leading up to and immediately following the festival is equally important, because those providing basic services already are under strain.

San Francisco is launching programs
celebrating the 50th anniversary
of the "summer of love."
San Francisco is launching programs celebrating the 50th anniversary of the "summer of love."

Destinations like San Francisco that are accustomed to handling large crowds can nonetheless find themselves caught between the promoters of the festival business and locals who worry more about the impact on their quality of life. As it happens, San Francisco also is wholeheartedly embracing its past as one of the original festival meccas: This summer the city is launching a series of programs celebrating the 50th anniversary of the "Summer of Love" and the legendary Monterey Pop festival that took place nearby; guided tours of the haunts of music legends Jimi Hendrix and Janis Joplin are on the agenda.

Airport capacity is equally vital, and yet a miscalculation there can have long-term ramifications. As complaints have piled up among SXSW attendees about prohibitively high airfares to Austin during March, the city's airport has grown, opening a $20 million expansion to the main terminal this year, but only after the 2017 festival was concluded.

Another example, and a cautionary one, is that of St. Louis, where a generation ago city leaders signed off on a new airport concourse. By the time it opened, demand for air service had fallen to the point where the structure now sits largely empty, a situation that might now be turning around as the city's innovation district takes off.

"The St. Louis region continues to see a rebirth in research, technology and entrepreneurship," says Explore St. Louis' Brian Hall, adding that it's paid off in meeting attendance. The city's convention center averages 100 events each year, drawing some 600,000 attendees out of a total 26 million annual visitors.


COPY WITH CAUTION

Harteveldt advises DMOs and city planners is not to bet too much on finding their own SXSW solution. "Who knows, you could come up with a great concept, but one year it could be a dud," he says, noting that the very syndrome fueling the rise of these hyperactive confabs could be their undoing. "We have become a world of short-attention-span humans," he adds.

St. Louis' Murmuration Festival
debuted with a bang last year.
St. Louis' Murmuration Festival debuted with a bang last year.

As for St. Louis' Murmuration fest, while the 2016 debut is regarded as a success, this year the organizers are taking a different tack, breaking the festival model down into a series of more intimate gatherings.

"In 2017, we anticipate there will be smaller and more frequent events around the community, with the understanding that at the appropriate time, we'll tip it back to be a full-blown festival," says Brian Hall. In short, the festivalization frenzy might be coming back down to earth.

NO ROOM AT THE INN 

How marquee events fuel the sharing economy and wreck attendance metrics

Last February, one would-be South by Southwest attendee searching a month ahead of time for accommodations in Austin -- whose official lodging roster had long since maxed out -- spotted a deal on Airbnb for a single person at a mere $200 a night. On closer inspection, the "room" turned out to be a tent in the backyard of a private home (bathroom privileges included).

To be sure, Austin during March is an extreme case -- the Texan capital city's hotel capacity of around 40,000 rooms is more than adequate to house visitors most months of the year. And most major cities that handle large conventions would rarely if ever find themselves in a situation where meeting attendees might have to consider sleeping on a park bench.

For meeting organizers and destination marketing organizations, however, the broader implications of the ebbs and flows in demand brought on by the festivalization craze could have serious repercussions. After all, it's these very shortages in affordable temporary housing and transportation that have fueled the rise of the sharing economy. And that, in turn, has led to clashes between city governments and these new sharing entrepreneurs.

During the 2017 SXSW -- which drew more than 100,000 visitors -- local officials went on raids to sniff out illegal short-term housing rentals (STRs), which naturally included some crash pads patronized by festival attendees. And last year, Austin voters approved a move to impose strict new regulations on ride-sharing services, including fingerprinting of drivers, prompting Uber and Lyft to pull out of the market.

But while SXSW attendees this year had to rely on local taxis and scrappy start-up ride services, in late May, Texas Gov. Greg Abbott signed a law overriding the new regulations. Uber and Lyft wasted no time returning to Austin, but it wasn't all good news: A few weeks later, Fare -- one of the newcomers that had cropped up in their absence -- just as quickly shut down.  

Andreas Weissenborn, director of research and analytics for Destination Marketing Association International, notes that a growing number of meeting delegates already were going rogue and booking out of the official room block -- but the rise of mega-events has accelerated the trend. That's equally true in cities such as New York, where local officials have repeatedly tried to crack down on Airbnb. The Big Apple's dubious reputation for extortionate hotel rates during peak periods only adds fuel to the fire.

There's another crack in this fractured situation: Home sharing makes it harder to get an accurate picture of overall attendance numbers, especially during sprawling events like festivals. "After all, a visitor is a visitor, and there are these massive logistical challenges that come with the festivalization trend," Weissenborn says. "It can lead to these almost Rube Goldbergian efforts" to tackle transportation and care of feeding of the crowds -- not to mention supplying adequate bathroom facilities.

Meanwhile, Austin is stepping up to the plate. According to the Austin Business Journal, the city is one of the top 10 U.S. markets for new hotel construction and, with more than 8,600 rooms coming online, is expected to boost capacity by 25 percent. Two major new properties, the Fairmont and the J.W. Marriott, already have added around 2,000 rooms to the downtown area.

Still, most industry observers expect that services such as Airbnb will continue to play a role. According to rental provider HomeAway, which is based in Austin, short-term rentals contribute more than $200 million to the Austin economy annually. And a study from research firm Datafiniti concluded that Austin will continue to be dependent on short-term rentals to house visitors during major events.

Datafiniti CEO Shion Deysarkar comments that while Austin is clearly on a building binge, it's still a case of too little, too late. "With the data we see, I'm more convinced the STRs are absolutely needed to help Austin if they want to continue growing as they are."

In a recent analysis, Datafiniti estimated that the median price of an STR in Austin is $200 a night under normal circumstances, whereas during SXSW, it is close to $600. "If people are getting away with charging $600 a night for staying in Austin," Deysarkar says, "that clearly shows that there is unmet demand in the city."