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Chapter 3

Promises and Realities

Laying out a “long range” strategic plan for Chicago’s McCormick Place convention center in January 1990, consultant Charles H. Johnson described a vibrant and growing convention and tradeshow market. He noted that “facility space requirements have been growing at a rate of eight percent per year” and “Future growth is expected to continue.” He illustrated that finding with two charts, one depicting sharp upward growth in both tradeshow exhibit space use from 1971 to 1987 (8.66 percent) and attendance (6.47 percent), the other showing an even more dramatic upward slope, with annual increases in the size of Tradeshow “200” events—the 200 largest conventions and tradeshows each year—continuing from 1988 though 2000.¹

For Johnson and his client, the Metropolitan Pier and Exposition Authority, the presumption of constant and predictable future growth was vital in justifying ever more space and investment in McCormick Place, with the conclusion that “McCormick Place must be bold so that it can stake its claim to maintain the largest events and increasingly attract international delegates.”²

The presumption of industry growth was just as vital for Johnson and convention center backers in Boston and Massachusetts in 1997. Using data from the annual Tradeshow Week Data Book, Johnson argued, “Over the last three years, the number of exhibitions and the amount of demand for exhibit space increased dramatically,” referring to a table showing exhibit space use growing from 399 million square feet in 1994 to over 452 million for 1996, with attendance increasing from 85.3 million to 102.2 million. Under the heading “Future Growth,” Johnson reported projections from the Center for Exhibition Industry Research that the convention and tradeshow industry would reach 550 million square feet of space used and 140 million annual attendees by 2000.³

Johnson employed the same set of data for 1990 through 2000, attributed to the Center for Exhibition Industry Research (the tradeshow industry’s research and promotion arm), in a November 1998 “Boston Convention & Exhibition Center Marketability Study” published by the Boston Redevelopment Authority. His conclusion on the future market environment for a new Boston center—“Over the decade, the industry is expected to add approximately 1,000 annual exhibition events to the market and attendance will nearly double, growing from 75 million in 1990 to a projected 140 million in the year 2000.”⁴

The growth argument and the numbers were just the same in Johnson’s July 2000 analysis of the prospects for a new convention center in Jackson, Mississippi. Noting annual growth of exhibit space use averaging 6.9 percent from 1990 to 2000, with a table (labeled “Cumulative Exhibition Growth”) showing an “estimate” of 140 million total attendees in 2000, Johnson told the Jackson Convention and Visitors Bureau that “Continuing growth in the demand for various types of conventions, tradeshows, and meetings has motivated communities across the country to develop new or expanded convention center facilities.” The conclusion for Jackson—“As regional and national conventions and tradeshows continue to increase in number and size, Jackson will enjoy increasing demand from these segments as well.”⁵

But the promise of convention event and attendance growth (and expansive future estimates) from Johnson and the Center for Exhibition Industry Research appeared to have run afoul of larger forces in 2000 and 2001, including an economic downturn and the events of 9-11. Individual convention centers reported sharp drops in attendance. At Chicago’s McCormick Place, convention and tradeshow attendance fell from 1.44 million in 2000 to 1.33 million in 2001 and 1.16 million in 2002. At Boston’s Hynes Convention Center, hotel room night generation fell from 401,367 in 2000 to 293,743 in 2002 and 253,698 in 2003. The figure reported in the annual Tradeshow Week Data Book fell as well, from 126 million in 2000 to 75 million in 2001 and 56 million in 2002.

If the prediction of attendance growth from Johnson and the Center for Exhibition Industry Research—140 million convention and tradeshow attendees for 2000, the forecast Johnson had given Boston and Jackson—had proven erroneous, this seemed to have little impact on Johnson’s subsequent assessment of convention and tradeshow industry growth for other cities.

The overall convention industry had clearly seen a dramatic attendance drop, easily visible in the annual Data Book summaries. But that drop was not at all evident in Table 7-1 of Johnson Consulting’s July 2003 study for Rockford, Illinois. There was a table of “Cumulative Exhibition Growth,” just as in the Jackson study of three years earlier, with the same annual figures for the 1990s as in Johnson’s 1997 Boston report. But the table in the Rockford report neatly ended with an “estimated” figure of 112 million total attendees in 2000. No data were reported for 2001 or 2002. That was apparently sufficient for Johnson to conclude, “While larger economic conditions will continue to impact the convention industries, there will remain an ongoing demand because manufacturers and other exhibitors typically view conventions and tradeshows as a cost effective marketing tool for highly targeted audiences.”⁶

By his October 2003 analysis of the prospects for a new convention center in St. Charles, Missouri, Johnson had updated his data (from the annual Data Book) on “Cumulative Exhibition Demand Growth” to include 2001 and 2002. The table now portrayed a sharp drop in the number of events, from 4,637 in 2000 to just 4,342 for 2002. But while the historic counts of shows and space use were consistent with previous reports, the attendance totals had somehow changed—indeed, changed all the way back to 1990. Where the exhibition demand table in the July Rockford report had shown 75 million attendees in 1990 growing to 110 million in 1998 (as in earlier reports), the October report for St. Charles put the 1990 figure at 39 million, reaching 52.9 million for 1998. And although the St. Charles table was updated to 2002, there was no evidence of a sharp attendance decline after 2001. Instead, Johnson showed total attendance of 55.1 million in 2002—down just slightly from

56.3 million in 2000 and 58.5 million in 2001. The obvious dramatic change in total convention and tradeshow attendance—evident in the actual Tradeshow Week data and reports from individual convention centers—had somehow disappeared.⁷

The revised data, attributed to Tradeshow Week, ostensibly supported the conclusion that “While larger economic conditions will continue to impact the convention industries, there will remain an ongoing demand for events because manufacturers and other exhibitors typically view conventions and trade shows as a cost-effective marketing tool for highly targeted audiences.” And with that assessment of future demand, Johnson could assert, “St. Charles, because of its growth, destination attraction, corporate presence, and other factors, is a natural location for a main convention facility to serve the region.”⁸

A few months later, the same Tradeshow Week data, presented in a table labeled “Cumulative Exhibition Demand Growth,” bulwarked the analysis of industry demand and growth in Johnson’s February 2004 study for Bryan-College Station, Texas. Once again, the total attendance figures had shrunk from those in comparable tables in earlier reports, showing no real decline in 2002 or 2003. And again Charlie Johnson stated his conclusion that “While larger economic conditions will continue to impact the convention and meetings industries, there will remain an ongoing demand for events because manufacturers and other exhibitors typically view conventions and trade shows as a cost-effective marketing tool for highly targeted audiences.” That finding about convention demand sustained his finding for the Texas A& M University community: “The area, because of its growth in population, corporate presence, and tourism is a natural location for a dedicated, high-quality convention facility to serve as the primary center for the region.”⁹

Johnson Consulting returned to Rockford, with a follow-up study dated January 7, 2010, for a new downtown convention center and hotel. And despite the global economic turmoil of 2008 and 2009 and the dramatic downturn in travel and hotel demand, Johnson once again offered an upbeat account of the performance of the convention and tradeshow industry and its prospects for the future. A preamble to the formal report offering answers to “frequently asked questions” brought the finding that “there is a nationwide demand for meeting and conference space that is not being met .…This trend will continue as the economy rebounds and business travel increases.” Johnson proffered the reassurance that “Virtually all categories of meeting activities have experienced rapid worldwide growth since the early 1970s.” The body of the report contained the finding that “In recent years, the growth rate in demand for exhibition space has been exceeding the rate of increase in the supply of exhibition space.” That supported Johnson’s central conclusion for Rockford’s leaders: “Through sustained and thoughtful initiatives and investment in projects such as a new convention/conference center and hotel, downtown Rockford can have a revitalized identity and re-emerge as an economic center and resource for the community.” And a year later, in a February 2011 report for Clemson, South Carolina, Johnson could observe, “Virtually all categories of meeting activities have experienced rapid worldwide growth since the early 1970s,” and offer the conclusion that “Clemson is well suited to participate in the convention, conference, and meetings sector, given that it is home to Clemson University.”¹⁰

Other consultants also tied their recommendations that cities add more convention center space to the presumed growth of the convention industry, employing much the same arguments and just the same sources of data Johnson Consulting relied on.

Assessing the state of convention and tradeshow demand for the city of Anaheim in 1995, the consultants at Coopers & Lybrand, including Craig Skiem and John Kaatz, also turned to Tradeshow Week’s annual report on the industry’s largest events, the Tradeshow Week “200.” They told Anaheim officials that “Following a period of slow growth in 1991–92 brought on by a recession and the Gulf War, the growth rate in the trade show industry rebounded in 1993.” The consultants concluded, “This trend is expected to continue, with industry growth ranging from three to five percent annually over the next five years.” That growth, and increasing competition from expanding centers in Los Angeles, Chicago, New York, Dallas, and New Orleans, meant Anaheim’s own expansion “must be seriously considered.”¹¹

Two years later, in 1997, the convention center consultants at Coopers & Lybrand justified an expansion of New York’s Javits Center with another analysis of Tradeshow Week’s “200.” They argued, “Following a period of relatively slow growth in 1991 and 1992, brought on by a recession and the Gulf War, the growth rate in the trade show industry rebounded in 1993 and has been steadily increasing each year since.” The Coopers consultants added, “Preliminary estimates for 1996 through 1999 indicate continued steady annual growth in attendance, exhibiting companies and space requirements of between three and five percent which are anticipated to continue into the twenty-first century.” And with that assumption of growth, they concluded that an expanded Javits Center represented a “significant opportunity” for New York.¹²

With the demise of Coopers & Lybrand in 1998, the principals of the convention center consulting practice, including Craig Skiem and John Kaatz, formed a new firm, Conventions, Sports and Leisure International. The new CSL firm produced a market analysis for the New Orleans Morial Convention Center in 1999 that again turned to the Tradeshow Week “200” as an index of demand. For the CSL analysts, those data indicated that “Since 1990, the largest 200 trade shows have experienced a steady growth in terms of net square feet of paid exhibit space and attendance.” With that historical pattern and “Industry projections [that] forecast future growth at two to four percent annually as the importance of face-to-face business interaction continues to position the industry as recession resistant,” the CSL report called for an expansion of 500,000 to 600,000 square feet of exhibit space “needed to support the long-term demand for the space in New Orleans … [to] target added multiple events in the 200,000 to 600,000 gross square foot range.”¹³

The CSL firm continued to rely upon Tradeshow Week data, albeit almost entirely in terms of year-to-year percent changes and index values, in describing the state of the convention center market, even as industry performance changed in 2001 and after. For the Pennsylvania Convention Center Authority in a January 2003 report, CSL argued, “Until recent trends, the square footage, number of exhibitors and attendance levels of the convention, tradeshow and meetings market have continually grown since 1984, with the exception of a brief two-year period in the early 1990s.” And although “Recent events and economic conditions have resulted in significant decreases in attendance and space use in many markets throughout the country,” they could confidently predict an industry “rebound over the next 12 to 24 months.”¹⁴

The CSL consultants also provided their upbeat view of the future of the convention and tradeshow industry to a broader audience of local officials. CSL principal Bill Krueger’s May 2007 presentation at the International Economic Development Council’s “If You Build It, Will They Come?” conference, “Is the Convention and Conference Center Market Saturated?,” answered with a series of slides titled “The Recovery of the Biggest …” and “Decades of Growth for the Largest …,” illustrating a “Growth Index” of space use, exhibitors, and attendance. And a CSL analysis of the prospects for a new convention center in Jackson, Michigan, in October 2007 included the same chart that Krueger’s presentation had titled “Decades of Growth for the Largest….” For the Jackson report, the graph was now titled “Tradeshow 200—Convention & Tradeshow Industry Growth,” clearly referring to the source of its data, Tradeshow Week’s annual summary of space use, exhibitor, and attendance indices for the “200” largest convention and tradeshow events. “Exhibit IV-4” showed attendance steadily growing from 1987 (value of 100) to 2000, albeit flat in 1990–1991. Growth appeared to resume in 2003, hitting an index value of about 156 in 2005 and 162 in 2006—both above the previous peak of 155 for 2000.¹⁵

CSL provided an optimistic assessment of the state of the convention industry and its future for the Greater Jackson Chamber of Commerce, noting, “The most recent industry data suggests [sic] that the nationwide convention and tradeshow industry is in the midst of a renewed expansion, with demand levels generally recovering beyond pre-9/11 levels.” There was still a cautionary note: “While it is believed that challenges have and will continue to exist in certain localized markets, every community and destination is unique and application of blanket industry-wide, macro assessments of supply and demand phenomena are often ill-advised.” “Destination appeal” mattered, and “facilities located in destinations with weak appeal and/or deficient visitor amenities more often struggle or underperform industry averages.” But Jackson apparently had sufficient appeal, as CSL stated: “A new Jackson convention center, as envisioned, would act as an economic generator and a public resource for the local community, hosting conventions, conferences, tradeshows, public/consumer shows, meetings and other events of both a non-local and local nature.”¹⁶

When CSL reported on the market feasibility of a new convention center in Oklahoma City to the Greater Oklahoma City Chamber of Commerce in March 2009, the national economy and the convention industry had changed in dramatic fashion. But the consultants still relied on Tradeshow Week’s figures on the annual performance of the “200” largest events (including exhibit space and attendance), again shown as a “growth index” to demonstrate the “short-lived” impact of 9-11, with growth having “picked up” starting in 2002 and “continuing through 2007.” After noting the current conditions “negatively impacting” the convention and tradeshow business, the report argued that convention growth would parallel GNP change, and that industry change “will have to be monitored over the coming months and years.” But that need to monitor convention demand did not have much impact on CSL’s recommendation that Oklahoma City add 200,000 square feet of exhibit space, effectively tripling the center’s size. Nor was there any evidence of uncertainty in the forecast that a larger center would boost convention attendee direct spending from the current $16,724,000 to $45,566,000 each year.¹⁷

It was impossible for the CSL consultants to ignore the impact of the 2007–2008 recession on the convention business when, in November 2009, they completed a “Strategic Development Plan” for the Boston Convention & Exhibition Center. As they had observed for Oklahoma City, they noted “several conditions that are negatively impacting convention and tradeshow activity nationally.” But that impact was taking place in a presumed historical context of exhibit space demand tied to the state of the national economy. The historic growth index chart of the “200” from earlier reports was not part of the Boston report. Instead, it included a graph showing “Annual Changes to Large Convention & Tradeshow Demand and S&P 500 Earnings Per Share,” reflecting solely space use data from the annual Tradeshow “200,” rather than attendance, through 2008. CSL could thus go on to conclude, “If projections of future economic growth are generally accurate, it is likely that although the convention and tradeshow industry experienced a downturn through 2009, recovery in demand will take place towards the end of 2010 or early in 2011.” That expectation of certain demand recovery was apparently sufficient for CSL to recommend the development of a second headquarters hotel for the BCEC, more ballroom space, added meeting room space, a new auditorium, and the potential addition of up to 400,000 square feet of exhibit hall space.¹⁸

CSL’s belief in the recovery of the convention business, and its focus on “Large Convention & Tradeshow Demand” based on the presumed historic performance of the “200” events also extended into 2010, exemplified by a March 22, 2010, study of potential convention center development for Boise, Idaho. The Boise analysis included the same graphic of demand trends and earnings per share included in the Boston report, and concluded, “if projections of future economic growth are generally accurate, it is likely that the convention and tradeshow industry will continue to experience a downturn into 2010, with a potential recovery in demand taking place sometime late in 2010.” CSL could thus recommend that Boise develop 50,000 square feet of new exhibit space, while noting an attached or adjacent headquarter hotel as an “important amenity” to include in center development and funding plans.¹⁹

The CSL firm’s optimism about the long-term future of the convention business continued through 2010. In its study of demand for an expanded and improved Henry B. Gonzalez Convention Center in San Antonio, dated December 1, 2010, the CSL consultants did note, “If projections of future economic growth are generally accurate, and given the continued viability of the convention model as a means of conducting key elements of a successful business, it is likely that while the convention industry will continue to experience a downturn into 2010, a potential recovery in demand is likely to take place sometime in 2011.” But the report then added, “We continue to believe that demand for convention and tradeshow space is tied to the overall health of the economy, and that demand levels will rebound by 2011.” With that outlook, CSL recommended an expansion of 100,000 square feet.²⁰

The CSL firm’s positive outlook on the future of the national convention and tradeshow business extended through 2011. In an analysis of the “proposed LACC [Los Angeles Convention Center] enhancement project”—actually a new football stadium to be developed as part of the city’s convention center complex—CSL forecast that the city would gain a “significant increase” in major conventions and tradeshows, amounting to about five each year, boosting annual “non-local attendee days” from a five-year average of 331,190 to a forecast 522,000. And the firm did offer city officials the conclusion that “Given the stable condition of convention and tradeshow industry demand projected into the future, the large majority of additional LACC citywide events will have to result from attracting events that otherwise would have booked into centers in competitive markets such as San Diego, Anaheim, Phoenix, San Francisco and Denver.” But even with that competitive reality, Los Angeles presumably stood to see more convention business.²¹

The passage of another year of limited national economic recovery apparently did little to alter CSL’s outlook on future convention demand. When the CSL consultants presented their December 2010 assessment for San Antonio, they had argued, “demand levels will rebound by 2011.” When a year later CSL completed a broader report on San Antonio tourism in November 2011, it concluded “If projections of future economic growth are generally accurate (even at modest levels), and given the continued viability of the convention model as a means of conducting key elements of a successful business, it is likely that while [sic] the convention industry will continue to stabilize, with slight increases through the remainder of 2011.”²²

From the 1990s to 2011, through economic growth and recession, for cities as large and well known as New York and New Orleans or as modestly sized as Jackson and Boise, the CSL International consultants (at both Coopers & Lybrand and CSL) emphasized the persistence and predictability of convention and tradeshow industry growth. Over and over, the firm relied upon data from Tradeshow Week, most commonly from the “200” largest events and expressed either as annual percentage changes or as index numbers, to make the case that there was room for more exhibit space, across a broad swath of communities, that would inevitably lead to more conventions and tradeshows, with more attendees and greater “economic impact” from visitor spending. Even in the face of dramatic economic change after the 2007–2008 recession, the firm continued to promise that recovery was just around the corner. And the persistent forecast of growth also characterized the work of other convention center consultants.²³

From the early 1990s to about 2000, the convention center consulting practice at PriceWaterhouse (subsequently PriceWaterhouseCoopers) was directed by David C. Petersen. Petersen had effectively founded the convention center practice at Laventhol & Horwath in 1981, which he headed until the firm’s bankruptcy in 1990. At PriceWaterhouse, he directed studies for a long list of communities and clients, including Boston, San Diego, Cincinnati, and Atlanta. Those cities too heard a story (much as Laventhol clients had earlier) of historical growth in convention center demand based on the Tradeshow Week “200,” and the forecast that growth “is expected to continue in future years.”²⁴

Reviewing the market prospects for an expanded convention center for Atlanta’s Georgia World Congress Center in early 1993, PriceWaterhouse focused on the historical pattern of growth for the nation’s largest conventions and tradeshows, the Tradeshow “200.” The PriceWaterhouse consultants noted, “Growth for the country’s largest 200 trade shows, all of which require more than 225,000 gross square feet, has been similar to growth for the entire U.S. trade show industry”—a figure the consultants put at 6 to 8 percent annually. The demand assessment went on, “Research shows that growth in demand for convention center exhibition space will continue … there is no persuasive evidence that exhibition space demand growth for either trade shows or conventions will abate in the foreseeable future.” Looking ahead, PriceWaterhouse saw growth in the future, for fiscal years 1992 to 2001, estimating demand for space increasing “at approximately 7 percent compounded annually.”²⁵

David Petersen and his PriceWaterhouse colleagues returned to Atlanta in 1996, with a second market analysis of an expansion of the Georgia World Congress Center. Once again, they focused on the growth of the overall industry, reviewing “the growth trends of the 200 largest trade association events in the U.S, ‘The Tradeshow 200’.” They described trends in both exhibit space use and attendance as “sporadic,” while going on to note that “the last three years have seen a recovery in both of these factors.” They finally concluded in a “summary of key factors,” “Demand, measured in terms of net exhibition space occupied, has grown at approximately 5 percent per year, on average, for the 200 largest trade association events in the U.S.” They then used the assumption of 5 percent annual growth in exhibit space use to argue, “An additional 700,000 square feet of exhibition space would provide sufficient space for these events to be held alone in the Center, or simultaneously with larger events.”²⁶

The PriceWaterhouse consulting team (merged and renamed PriceWaterhouseCoopers and led by Robert Canton after David Petersen’s retirement) delivered an analysis of the market prospects for an expanded Jacob Javits Convention Center in New York in March 2000. The Javits report set out its central findings in a series of bullet points, with headings printed in bold and italics. Much as for Atlanta, the case for a larger center was built on event growth. “JKJCC will lose existing business if it does not expand” was the first point, noting, “Several major recurring trade show users are outgrowing the facility and have stated that they will be forced to leave JKJCC if the facility is not expanded.” The second major point was the Javits center would attract new events with an expansion, with the argument that events were now unable to come “due to size constraints and date availability.” The final point was that “growth in demand is exceeding supply of exhibit space in major convention and trade show destinations including New York City.”²⁷

The Javits study included an entire section of “Tradeshow 200 Analysis,” focused on the large cities with which New York competed and the pattern of attendance growth for the “200.” The study’s findings on overall attendance, presented in a chart of total attendance by year from 1988 to 1999, were somewhat mixed. Attendance at these large events had grown steadily from 1988 to 1996. But there was a clear and dramatic drop in 1997 and 1998. That decline was excused by Tradeshow Week with the argument that it reflected higher travel costs and “site factors such as rotational pattern and/or weather.” The consultants did not dwell on the apparent inconsistency of recent attendance trends and the historical pattern. PWC went on to present a further analysis by industry group that focused on “fast growing industries” such as telecommunications and media. That apparently allowed the consultants to conclude, “Average growth in attendance for industries consistent with JKJCC orientation range [sic] from four to nine percent.” It was those industries that really mattered to New York and the Javits.²⁸

PriceWaterhouseCoopers also elaborated another set of growth measures in the 2000 Javits study, a set of measures unique to the firm. Since 1985, PriceWaterhouseCoopers has published an annual Convention Center Report with summary data on major convention centers that chose to provide information. For the New York study, PWC focused on the historical performance of major convention destinations, “gateway cities” with more than 20,000 metropolitan area hotel rooms. The Convention Center Report data measured both exhibit space use (largely in terms of annual average exhibit hall occupancy) and average attendance at conventions and tradeshows, much like the Tradeshow “200.” But by looking at the actual performance of a group of major convention centers, PWC was tapping the joint effects of both supply and demand.

The 2000 Javits study showed average exhibit space occupancy for conventions and tradeshows “gateway centers” at about 50 percent in 1998, up from about 49 percent in 1995 and 45 percent in 1990. The consultants argued that as available space had increased during this period, “demand for these centers has increased at a higher rate than the increase in supply of space.” Average convention attendance had gone up as well: “Between 1990 and 1998, average annual growth of attendance was seven percent for gateway … centers.” The average attendance had hit about 620,000 in 1999, up from a little over 500,000 attendees in 1995 and about 410,000 in 1990. The consultants then concluded, “Demand growth for exhibit space is expected to continue at strong rates over the next several years, particularly in major cities …. Current excess demand could occupy an expanded JKJCC.”²⁹

The New York Convention Center Operating Corporation, the operator of the Javits Center, commissioned another expansion market analysis from PriceWaterhouseCoopers in the fall of 2003. The report the firm delivered in January 2004 lacked the bullet points of its predecessor, but emphasized that even “when the national convention and trade show markets experienced downturns or slowdowns, Javits has consistently operated at or very close to its practical maximum capacity.” The PWC consultants continued to endorse a major expansion of the Javits, boosting exhibit space from 814,000 to 1.34 million square feet, together with a nine-fold increase in meeting room space and a new ballroom. But their analysis of potential demand was obliged to deal with the changed reality of the convention business after 2000 and 9-11.³⁰

The demand analysis in the 2004 Javits study again employed data from the Tradeshow “200” and PWC’s own Convention Center Reports. The PWC assessment of the “200” showed total annual volume of exhibit space and event attendance, rather than year-to-year percent changes. The total exhibit space use graph demonstrated that growth had begun to slow after 1998, with 2000 and 2001 about flat, followed by a clear drop in 2002, back to the level of 1998. The picture of overall attendance was rather different, with a peak in 1996, followed by two years of decline, a modest rebound in 1999 and 2000, and then a further drop. The 2002 attendance total came to just over 4.2 million—equal to the attendance in 1993, and well below the over 4.6 million in 1996. The report noted a drop of 6 percent from 2000, and attributed “Recent declines” to “economic and geopolitical conditions and associated trends in reduced travel away from home and corporate budget constraints.”³¹

The PWC report also discussed the performance history of “gateway centers” (based on major centers’ reports of actual performance), describing “substantial declines” in convention and tradeshow occupancy between 2001 and 2003. But the assessment attributed “these declines to failure of demand for convention/space to keep pace with supply changes, the concurrent economic downturn, and to a limited extent, event cancellations due to the events of September 11, 2001.” The decline was not limited to occupancy rates. The Javits report included a graphic charting total convention and tradeshow attendance, demonstrating a fall-off beginning in 2000. That drop brought 2003 total “Gateway” attendance back to the 1997 level. Still, the analysis concluded, “Increases and declines in exhibit space demand and attendance at Gateway Centers have been consistent with periods of economic growth and decline—a trend that is expected to continue in the future.” And as if to reassure Javits officials, the report ventured, “Javits occupancy rates have remained consistently high during periods of industry decline.”³²

The consultants continued to rely on their annual convention center reports to index convention center demand. An analysis of “gateway center” trends was part of the analysis of the prospective performance of an expanded Indiana Convention Center in Indianapolis in early 2004. As with the 2004 Javits analysis, the consultants promised that center performance would vary with the state of the national economy. But, their report contended, “Over the past several years, despite difficult times experienced industry-wide, ICCRD exhibit hall occupancy has remained strong, repeatedly bordering on practical maximum occupancy.” The final recommendation of PWC was for an expansion of 275,000 square feet of exhibit space, as well as additional meeting and support space.³³

PWC’s Robert Canton also shared his view of the state and future of the convention center industry with the association of center managers, the International Association of Assembly Managers, in an article in the April/May 2004 issue of Facility Manager magazine. Titled “The Sky Is Falling! Or Is It Just a Little Rain?,” Canton’s piece noted, “the good news is that demand, while not keeping pace with the most recent additions to supply, is not declining as much as occupancy rates might suggest … the current economic recovery is expected to bring demand back up to pre-9/11 levels by 2005.” And while Canton went on to describe an “oversupply of space,” he posed the question of whether that meant expansions in the “haves … such as New York, San Diego, and Indianapolis should be halted? The simple answer is, of course not.”³⁴

Both the Tradeshow “200” and the performance of “gateway centers” also figured in PWC’s May 2006 report on the market feasibility of a new convention center in Irving, Texas. Examining the history of “200” exhibit space usage and attendance, the consulting firm described the drops in 2001 and 2002 but concluded, “Based on 2003 and 2004 growth rates, attendance and [Gross Domestic Product] may be returning to pre-recession levels.” Presenting the “gateway center” data, a series of graphs showed average convention and tradeshow attendance, as well as convention-related exhibit hall occupancy, still below the levels of 1999 and 2000. The trends summary concluded, “Growth and decline in exhibit space demand and attendance at Gateway centers have been consistent with periods of national economic growth and decline—a trend that is expected to continue in the future.”³⁵ The firm recommended that Irving build a new “multi-purpose center” with 50,000 square feet of exhibit space.

Both the Tradeshow Week “200” data and the figures for “Gateway Centers” appeared in PWC’s report on the Gwinnett County, Georgia, convention center for the Gwinnett Convention and Visitors Bureau. And once again, PWC found market “demand to support a 50,000 square-foot expansion,” though the firm found a justification for a 75,000 square foot addition. With that expansion and a new 400-room hotel, the Gwinnett Center would presumably see its annual convention and tradeshow attendance grow from 16,300 to 50,500—a more than threefold increase.³⁶

The demand for more convention center space that would presumably fill an expanded Javits Center, a larger Indiana Convention Center, a new center in Irving, and an expansion of the Gwinnett Center would also be sufficient to neatly accommodate an expansion of the San Diego Convention Center. PWC’s December 2007 208-page “Strategic Plan Update” and expansion analysis for the San Diego Convention Center focused on a “building program … to accommodate the current and estimated future demand for the SDCC.” As it had been for clients since the mid-1990s, the firm’s assessment of demand was based in large part on both historic “200” and “Gateway Center” performance.

For the “200” large convention and tradeshow events, the PriceWaterhouseCoopers consulting team now had a few years of data beyond the immediate impact of 9-11. The charts of the total attendance and exhibit space use of the “200” events that had appeared in the two successive studies for the Javits Center were nowhere to be found. Instead there was a set of graphs, based on the annual “200” figures, showing year-to-year percentage change. And PWC’s view of those data was upbeat, saying that growth of the indices “continued in 2005 and 2006, although not nearly as strong as the growth experienced in the mid-1990s.”³⁷

The data on “gateway centers,” defined as centers in metro areas with more than 30,000 hotel rooms and including San Diego with its 53,800 rooms, also provided a view of convention and tradeshow demand. The San Diego report noted these centers saw an average of 53 conventions and tradeshows for 2007, with attendance of about 400,000. In terms of exhibit hall occupancy from those events, PWC said, “Gateway centers have nearly reached their pre-9/11 levels.” Their final oft-repeated conclusion about growth: “Growth and decline in exhibit space demand and attendance at Gateway centers have been consistent with periods of national economic growth and decline—a trend that is expected to continue in the future.” With that expectation, PWC recommended that San Diego add 474,000 square feet of exhibit hall space, almost doubling the center’s size to one million square feet.³⁸

The Logic of Growth

The repeated invocation of convention growth—in event space, attendance, and total number—has been central to the justification for ever more new or expanded convention facilities. By portraying the convention and tradeshow industry as constantly growing, it was possible to simultaneously offer the judgment that Boston, Richmond, Overland Park, Rockford, and Peoria—and Atlanta, New York, Indianapolis, and Irving—could succeed in gaining convention business and “economic impact” by building more space.

The argument that the volume of exhibit space demand was regularly growing (and would do so far into the future) underpinned the contention, repeated in study after study to a wide range of communities, that expanding events, requiring ever more exhibit hall space, would “outgrow” a particular city. That argument was made for small and medium-sized centers, just as it was employed for the biggest centers such as Las Vegas and Chicago. As Charlie Johnson put it to Chicago and Illinois officials: “Many shows in McCormick Place need more space …. These shows, if they can not grow, may choose to leave the City.”³⁹

For individual cities, the threat or reality of losing a long-time event has often been portrayed as a striking blow to civic pride and the community’s sense of economic competitiveness. When the annual meeting of the Future Farmers of America decamped from Kansas City to Louisville, a Kansas City Star editorial was headed “An Emotional Blow,” and one news article described it as “a heavy blow to Kansas City’s convention industry and civic self-esteem.” The New York Times offered the assessment, “But what has made old men here weep and younger ones wonder about loyalty was the news last month that the blue jackets [of the FFA] would be leaving town” after almost seventy years. And when, just a few years later, the Future Farmers relocated their annual gathering from Louisville to Indianapolis, the public gnashing of teeth in Louisville was just as dramatic, followed by the offer of cash or corporate sponsorships and thousands of local volunteers to lure the event back. Even Indianapolis was not immune, with the annual Performance Racing Industry Tradeshow moving its annual event from Indianapolis to Orlando in 2005.⁴⁰

In a world of growing conventions and tradeshows, more space appeared to be a necessity simply to keep existing business. But simply staying even—keeping the Future Farmers in Kansas City, for example—would represent a very limited return on a substantial public investment in building and operating a center. The second element of the constant growth argument was that attendance was growing in parallel with the demand for space. By portraying consistently growing attendance, consultants could support and justify the forecast that more convention center space—either an expansion or an entirely new facility—would inevitably yield new attendees. More space would enable a community to go upmarket to lure larger and more lucrative events. It is the prospect of more out-of-town attendees, thereby bringing new visitor dollars and “economic impact” while stimulating new private development, that has long provided the central justification for ever more space.⁴¹

While an association or a tradeshow producer could profit from simply having more space to offer exhibitors for their booths and displays (thereby boosting his or her rental income), local communities and their governments only realized a return indirectly, through the attendees brought to their community. If bigger events, in terms of exhibit space, yielded no new visitors, the public investment in a new or bigger center would be unproductive. So the image of growing attendance, both at individual events and in total, has been a vital part of the consultants’ analyses and the local sales pitch for convention center spending.

The growth argument rests on a third leg. It has long been a central tenet of industry promoters that the overall universe of convention and tradeshow events has been consistently growing as well. If space demand or attendance were growing, with no enlargement of the pool of events, every city would be facing an effectively “zero-sum” market environment, able to fill its new center or added space only at the expense of competing locales. The image of an expanding universe implied that there would inevitably be new events. From the 1980s through the 1990s and beyond 2000, industry consultants and observers consistently described the constant birthing of new events—to serve new industries and innovations such as the personal computer or the rise of the Internet, to provide regional offshoots of national events, or as targeted events for specialized niche markets.

David C. Petersen, long considered the “dean” of convention center consultants, first at Laventhol & Horwath and then at PriceWaterhouse and PriceWaterhouseCoopers, could tell those assembled for the Exhibit Hall Management Conference in November 1984, “The market is growing as fast as, or faster than, the buildings are growing…. I don’t see anything that’s static or declining. Everything is increasing—size, attendance, number of shows—and sponsors are demanding better and better facilities.”⁴²

Petersen would repeat much the same argument in his 1989 book on convention center development: “While many people are alarmed at the amount of new convention center construction and expansion, it is apparent that the dominant users of these facilities are increasing in number at a pace consistent with the expansion and supply of the facilities.” And Petersen’s successor at PriceWaterhouseCoopers, Robert Canton, could point in 2004 to the 4,778 trade and consumer exhibitions counted by Tradeshow Week and tell Javits Center officials that “space limitations have precluded the Center from hosting many events that would like to be in New York City … [giving New York City] tremendous untapped potential in the trade and consumer exhibitions market.”⁴³

The Center for Exhibition Industry Research, the research entity established and funded by the tradeshow industry, also published regular “Size of the Exhibition Industry” reports (based on Tradeshow Week Data Book data) through the 1990s that forecast consistent growth in the number of annual events. The 1996 edition, for example, estimated that the count of annual events would grow from 4,400 in 1996 to almost 4,800 by 2000, together with the contention that “Over 500 new shows will be launched by the end of the decade.” And the overall argument from trade publications was that there was a growing stock of events, including new initiatives and those outgrowing hotel facilities, to fill more convention center space. Together with the forecasts from the small number of convention center consultants, the overall “pitch” was that center development was a “can’t miss” public investment.

The logic of convention industry growth had one additional foundational argument during the 1990s. Industry spokespeople, as well as consultants, regularly termed it “recession-proof.” Much of the case for the “recession-proof” conclusion rested on the apparent performance of the industry in 1990, during the Gulf War recession. The annual percent change figures for the Tradeshow “200” in 1991 actually showed some modest growth—1.3 percent in exhibit space use—from 1990 to 1991. Only the attendance measure failed to show positive growth, at 0 percent. What did not appear to have occurred was any real downturn. And the “200” measures quickly turned up from 1991 to 1992. The annual “200” directory summary for 1992 was headed “The Big Shows Bounce Back in 1992,” with the report that the “200” had a 1.9 percent increase in exhibit space, and 3.7 percent in attendance.

It was possible for Doug Ducate, head of the Center for Exhibition Industry Research, to describe the period before 2000 as “boom times for 15 straight years in the tradeshow industry, with annual growth and fistfuls of profits.” The assumption of consistent growth then ran into the realities of a changed economy with the collapse of the tech bubble, and the dramatic shift in travel behavior after 9-11.⁴⁴

Before 2001, industry spokespeople and center consultants spoke of a long-term history of demand growth. Tradeshow Week’s “200” directory for 2000 headlined “Solid Growth Reported in All Indexes,” with a reported 2.8 percent increase in average attendance from 1999. The headline the following year, in the directory published in April 2002 covering the previous year, was “Shows Report Steepest Declines in Directory’s History.” Exhibit space use was reported to have fallen 1.3 percent from 2000, with average attendance down 4.5 percent. The 2002 edition of the “200” directory offered no better news. The summary analysis read, “U.S. Exhibit Space Drops” and reported a 6.0 percent fall in exhibit space use and a decline of 4.4 percent in attendance.⁴⁵

Tradeshow Week presented 2003 as the year the “200” and the industry managed a dramatic turnaround. Although the exhibit space use still showed a decline from the previous year in percentage terms—0.7 percent—it was far smaller than previous drops. And attendance actually showed a year-over-year gain of 3.4 percent, putting it back into the growth category. PWC joined in soon thereafter with its 2004 “Convention Center Report,” signaling “significant improvement in the performance of convention centers.” The report went on to describe an increase in convention and tradeshow occupancy rates at large centers (over 500,000 square feet), and a “2003 to 2004 increase in attendance to conventions and trade shows of 14 percent!”⁴⁶

As the convention industry appeared to be rebounding in 2003 and 2004, consultant reports began to return to the growth argument, eventually arguing that the industry had returned to a pre-2000 level of demand, and would continue to grow in future years. A “white paper” on supply and demand, produced by the CSL International firm for the International Association of Convention and Visitors Bureaus in the fall of 2004, included a section headed “Demand Is Increasing” that argued, “there are encouraging signs for the industry.” The firm’s survey of 127 meeting planners found between 63 and 75 percent “foresee exhibit space growth over the next two to five years,” and “Similar data is registered for growth in attendance.” The demand analysis concluded, “The concept of the gathering of people works, and in a capitalist society, the private sector will exploit this fact to continually find profitable ways to utilize a growing inventory of facility space.”⁴⁷

Yet had convention demand actually recovered by 2006? Was the industry back to a pattern of consistent annual growth in exhibit space use and attendance? The PWC assessment, using data from its annual report on center performance, was largely cast in terms of occupancy and exhibit space use rather than attendance. The CSL “white paper” for the convention bureau association was built on survey data regarding expectations. And CSL’s consultant reports for a host of cities displayed index numbers derived from annual percent change calculations, rather than actual numbers.

The “official story” of convention industry demand, repeated by consultants, convention and visitors bureaus, industry publications, and the Center for Exhibition Industry Research, was that some 15 years of consistent growth had been interrupted—briefly and not seriously—by the Gulf War recession in 1991, followed by steady and consistent growth through the 1990s. The recession and 9-11 had seriously affected convention demand, with drops in exhibit space use and attendance. But by circa 2005 and 2006, the convention industry had fully rebounded, back to pre-2000 levels, with the prospect of consistent future growth for the balance of the decade. That history and prospect could offer substantial assurance to those cities choosing to invest in new centers or expanded space that they would inevitably fill.⁴⁸

But what if the steady growth scenario was not a full or accurate portrayal of convention demand? What if the figures the consultants quoted and relied on really provided a larger, more complex, and quite different picture of demand? And what if error and misinterpretation, built into the manner in which the demand measures were calculated, regularly led to faulty analyses and erroneous conclusions?

Demand Realities

Growth, in terms of the volume of annual conventions and tradeshows, volume of space used, and count of event attendees, has long been at the heart of the case for building ever more convention centers. Even when economic downturns and recessions have had a demonstrable impact on activity and attendance, industry representatives and consultants have contended it is a temporary situation—the convention business would inevitably return to steady, annual growth. The reality of demand, indexed by the same measures relied on by consultants, has been notably different.

Counting Events

Tradeshow Week’s annual Data Book has commonly been used as a source for the aggregate size and growth of the convention industry, both directly and as reported in the Center for Exhibition Industry’s regular “The Size of the Exhibition Industry” reports during the 1990s, regularly cited by industry consultants. The Data Book volume, at about three inches thick and a weight of five pounds, includes a detailed listing of every event in the U.S. and Canada using 5,000 or more square feet of exhibit space. Published in the fall prior to the events it includes, it serves as an index and calendar for future events. Thus, rather than counting events that have happened, it effectively provides a short-term forecast for the coming year. The Data Book’s summary analysis also includes information on anticipated exhibit space use and attendance. But those figures are available for only a fraction of the events included in the volume. Tradeshow Week typically calculates an average for the events that provide space and attendance estimates, and then multiplies the averages by the total (or subtotal) of events.

The annual Data Book listings include both typical association conventions, such as the annual Congress of Cities of the National League of Cities, the annual meeting of the National Education Association, and the conference of the Association of Fundraising Professionals, and tradeshow events such as the National Hardware Show and the Produce Marketing Association’s Fresh Summit. These events utilize a range of venues, including hotels, trade marts, and convention centers. But the Data Book also includes (and counts in its totals) a wide array of public consumer shows. The book contained page after page of listings for local home and garden shows such as the Madison, Wisconsin, Home Expo, Maricopa County Home & Garden Show, Minneapolis Home & Garden Show, and North Iowa Home & Landscaping Show. They are joined by an array of local auto shows (the Dallas Auto Show, the Portland Rod & Custom Show), boat shows (the Lehigh Valley Boat Show, the Nashville Boat & Sports Show), and sports shows (the Chicagoland Children’s Expo, the Cincinnati Hunting & Fishing Show).

These public or consumer shows often use convention center space. But unlike conventions and tradeshows, they serve an almost entirely local market, drawing residents from the immediate city or metropolitan area. They thus do not generate the visitor activity or spending that most convention centers are designed to produce. By including these local events together with conventions and tradeshows, the Data Book annual total figures often provide a misleading impression of both the total size of the event universe, and its growth over time.

Consultant C. H. Johnson routinely employed the overall Data Book totals to describe demand growth during the 1990s. The HVS firm has used the same Data Book annual counts to describe demand growth from 1989 to 2007 in its consultant reports and its “Convention Centers: Is the Industry Overbuilt?” analysis in 2008. The “Overbuilt” article described exhibition events as growing from 3,289 in 1989 to 5,036 in 2007, “an annual average growth rate of approximately 2.4 percent … over the past 18 years.”⁴⁹ These analyses, and others based on the Data Book event totals, unfortunately combine two very different kinds of events—conventions/tradeshows and local public or consumer shows—to create a misleading impression of growth. The reality is that the local public show category has provided effectively all the growth in annual event counts seen over the last decade and a half.

Tradeshow Week began publishing separate counts of local public shows in the 1994 edition of the Data Book. That year, the public events made up about 11 percent of the total. By 1999, public events comprised over 15 percent, and that proportion grew to 25 percent by 2007, continuing at that share through 2010. There is no indication in the Data Books if the growth in these public events reflected real change in numbers, or a greater effectiveness on the part of the volume’s editors in listing consumer events.

Limiting an analysis of event growth to just conventions and tradeshows provides a very different image of demand change. In the first year the breakdown was available, 1994, there were 3,820 conventions and tradeshows. The total reached a peak of 4,016 in 2000—a modest level of growth. But it then fell to 3,648 in 2002 before increasing to a post-2000 peak of 3,850 in 2006. The 2009 event total came to 3,745. Then, reflecting the impact of recession, the 2010 total dropped to just 3,552—the lowest figure in the Data Book’s recent history.

The annual count of conventions and tradeshows has thus fluctuated with the national economy. Yet the “rebound” in convention and tradeshow demand described by consultants circa 2005 and 2006 did not match the peak year counts of the 1990s. There was certainly not the consistent growth described by C. H. Johnson or HVS. And the 2010 figure—the last year Tradeshow Week published before its demise—represented an unprecedented decline.

The “200”

Since the mid-1980s, Tradeshow Week has also compiled an annual listing of the 200 largest—in terms of exhibit space used—conventions and tradeshows in the U.S. The “200” listing is thus a changing annual group, one that by definition includes only those events that grow at a rate comparable to the largest events. The “200” listing includes both for-profit annual, biennial, and triennial tradeshows such as the now defunct COMDEX computer show, the annual Consumer Electronics Show, and the winter and summer New York International Gift Fairs, as well as annual association conventions, such as the meeting of the American Urological Association and the Chicago Dental Society annual meeting. Unlike the Data Book, it excludes public consumer shows. And it reflects actual event performance, unlike the Data Book’s pre-event estimates.

In terms of total annual exhibit space use, the “200” events grew regularly through the 1990s, from 51 million square feet in 1991 to a peak of 69.8 million in 2000. That pattern changed dramatically after 2000, with space use total falling to 61.9 million in 2003. Growth began again in 2004, with 63.6 million square feet in 2004, hitting a peak of 71.3 million in 2008. It was only in 2007 and 2008 that space usage exceeded (albeit slightly) the peak of 2000. But the recession had a dramatic impact on exhibit space use in 2009, plunging to just 58.6 million square feet—the smallest total since 1996, and a drop of 17.8 percent.

The “200” events, the largest and by definition among the most successful in the industry, would thus appear to follow the growth argument of industry consultants. But the real pattern of exhibit space use and growth has actually differed quite a bit across the “200” events. The single largest event, a changing annual example that often includes the biennial CONEXPO for construction equipment or the International Consumer Electronics Show (both in Las Vegas) has shown quite a dramatic increase in exhibit space use. In 1991, for example, the fall COMDEX spanned 1.14 million square feet. By 1999, the top event spanned 1.73 million square feet. And in 2008, the largest event (the CONEXPO) covered a total of over 2.2 million square feet.

But the dramatic growth of the single largest event was not necessarily mirrored by the more typical “200” event. The median “200” event grew much more slowly and less consistently in exhibit space use. That mid-sized event covered 195,500 square feet in 1991, hit 267,677 in 2000, dropped to 224,800 for 2002, and finally hit a post-2000 peak of 248,580 in 2007. Compared to the largest events, the mid-sized convention and tradeshows in the “200” grew only modestly during the 1990s, and had not returned to the 2000 peak by 2008.

A pattern of no consistent growth in space also marked the bottom of the “200.” The single smallest “200” event in 1991 covered 113,000 square feet, reaching 125,300 by 1995. The peak year for the smallest event came in 1999, at 148,700 square feet. But the smallest event to be included among the “200” never again reached that size. For 2008, the smallest event covered 125,000 square feet—unchanged from 1995. Had the overall convention and tradeshow industry been consistently expanding in exhibit space, the smallest event among the “200” should have grown steadily as well. The fact that it did not suggests that the growth in space use for the overall “200” was a product of the largest events, not the “200” as a whole.

The most recent results, for 2009, the last year of Tradeshow Week’s operation, add one final fillip to the oft-repeated claims of convention and tradeshow exhibit space growth. The largest event in 2009, the International Consumer Electronics Show (CES), spanned 1,711,403 square feet—a drop of 7.9 percent from 2008. And the impact of the recession was even more dramatic at the middle and bottom of the “200.” The median-sized event fell to 218,541 square feet, a drop of 10.5 percent, and the smallest fell from 125,000 in 2008 to just 95,000 in 2009—a drop of 24 percent.

The exhibit space use of the “200” events thus differs from the consistent year-over-year growth pattern regularly shown in consultant graphics and reports. Very large events have demonstrated significant growth since the early 1990s. But that growth has not been the norm, even within this select group of the largest annual conventions and tradeshows. The more common result has been slow and inconsistent growth from 2002, followed by the sharp plunge in 2009.

The growth of the largest events also reflects their location. Every year but one since 1991, the single largest event has been held in Las Vegas. And Las Vegas offers a uniquely abundant scale of convention center space. The publicly owned Las Vegas Convention Center expanded from one million square feet of space to two million in 2002. The triennial CONEXPO large construction equipment typically spilled out to the center’s surrounding parking lots and nearby hotels as well. And the Consumer Electronics Show has been able to take advantage of the million square feet of exhibit space at the privately owned Sands/Venetian Expo and exhibit space at the Hilton hotel in addition to the space at Las Vegas Convention Center. There has thus been a ready availability of new exhibit space in Las Vegas for events that could sell it.

The case for more, and newer, convention center space has not been built solely on the image of a growing demand for exhibit hall space. Industry consultants also argue that convention and tradeshow attendance has been growing as well, and thus a larger center will pay rewards in terms of more attendees and their economic impact. Indeed, if only space use was growing, cities would be seeing no added attendance—or greater visitor spending and economic impact—from building more center space. Yet for the “200” events over the past two decades, the pattern of total attendance has not been one of consistent growth. Instead, total “200” event attendance hit a peak in 1996—a peak that has not been equaled in the years since.

The “200” events grew in terms of attendance from 3.88 million in 1991 to a high of 5.08 million in 1996, propelled in large part by the growth of very large events, such as the COMDEX show. The Las Vegas-based COMDEX grew from about 127,000 attendees in 1991 to over 216,000 in 1996. But subsequent years saw the behemoth show’s attendance sink to under 125,000 in 2002 and 44,000 in 2003 before finally being canceled in 2004. Other big tradeshows shared a similar fate. The Super Show for the sporting goods industry fell from 112,000 attendees in 1995 to 81,000 in 2002 and 20,000 in 2005 before being ended in 2006.

The years after the 1996 peak saw a slide in 1997 and again in 1998, with a bump up to 4.77 million total attendees for 2000. But in the wake of recession and 9-11, overall attendance fell and remained low, at just 4.18 million for 2004. Tradeshow Week reported a notable jump in attendance in 2006, up to 4.62 million from 2005’s 4.16. Yet that sharp increase in 2006 was really a product of the decision to add six events put on by privately owned trade marts in Dallas, Las Vegas, and High Point, North Carolina. These trade mart events averaged 50,000 attendees, well above the average for the balance of the “200,” thus boosting the overall attendance. Yet even with these added events, total attendance remained at about the level of the mid-1990s.

The “200” attendance for 2007 was 4.41 million, followed by 4.56 million in 2008—still below the 1996 peak of 5.08 million and the 4.8 million of 1997, and equal to the total for 1998. Then, for 2009, the “200” attendance total came to just 3.84 million—a drop of 15.8 percent. Major event attendance had not, by 2008, even rebounded to the peak levels of the late 1990s. The 2009 total brought the “200” events back to the total attendance they had garnered in 1989.

A Note on Measuring the “200”

Contemporary consultant analyses that employ measures of the “200” events usually show historical data in terms of year-to-year percent change or index numbers. For example, a February 2009 market analysis for the New Orleans Morial Convention Center by CSL International included a chart of “Tradeshow Week 200—Convention & Tradeshow Industry.” The chart showed index number values of space use, attendance, and exhibiting companies for “200” events from 1987 through 2007. The index value for total attendance in 1991 was 110, hitting 142 in 1997 and, after a post-9-11 drop, reaching about 163 by 2007. The clear impression from this chart is that attendance steadily grew through the 1990s, fell in 2001 and 2002, and then resumed a steady upward trajectory. That image of annual attendance growth is thoroughly incorrect.⁵⁰

The CSL chart indicates that “200” attendance grew by some 48 percent from 1991 to 2007. The actual totals for 1991—3.88 million—and 2007—4.56 million—yield a percent change of 17.5 percent. And where the CSL chart indicates that attendance for 2007 neatly exceeded the total for 1997 (about 15 percent greater), the actual total attendance figures were 4,795,872 in 1997 and 4,413,372 for 2007—a clear drop. How could CSL turn slow growth into dramatic increases and a decline into a gain?

Each year, Tradeshow Week provided a summary total of each measure of the “200,” including attendance and exhibit space use. The editors also report these totals for the prior year. So, for example, the 2007 events attracted a total of 4.4 million attendees, compared to a reported total of 4.29 million for 2006—an apparent increase. Yet the report a year earlier on the 2006 events showed a total attendance of 4.62 million. In the aggregate, attendance dropped. Tradeshow Week nonetheless reported an increase in attendance of 1.6 percent. Tradeshow Week thus compares an event’s current performance to a revised figure for a year earlier submitted by the event organizer. And those revised figures for individual events often differ substantially from those reported a year earlier. For example, the “200” listing for the 2007 SEMICON West show for the semiconductor industry gave an attendance figure of 14,348, together with a previous year (2006) figure of 12,740. That worked out to 12.6 percent increase in attendance. Yet a year earlier, the Tradeshow Week “200” listing showed attendance for SEMICON West’s 2006 event at 19,600. By employing the revised attendance total for 2006, what should have been a decrease of 27 percent turned into apparent attendance growth.

Much the same thing occurred for the 2007 Outdoor Retailer Summer Market. Attendance for 2007 was shown as 7,840, compared to a revised 2006 total of 7,150—an increase of 9.6 percent. Yet the Summer Market’s attendance in the 2006 edition of the “200” was shown as 7,879, for a real if modest decrease. And a similar revised attendance figure for a year earlier for the annual Shooting, Hunting, and Outdoor Trade show (a revised 24,366 for 2006 versus the original 26,139) reduced the event’s attendance drop from 22 percent to 16 percent. This same pattern of a revised figure for the previous year occurs for exhibit space use. Not every “200” event restates its attendance and space use numbers for the previous year. But enough do so to affect the overall totals and the calculation of percent change.

Tradeshow Week’s consistent use of revised figures for the previous year has led to the calculation of annual percent change values that do not accurately represent the performance of the actual events. Modest actual increases turn into large gains; small seeming declines are actually far larger. The overall result, whether reported as the calculated percent change or transformed into index numbers based on percent change, as the CSL firm has done, is to create the appearance of regular year-to-year growth when actual growth is far more modest. Even Tradeshow Week’s recent “200” publications have made the gap between the annual percent change numbers and the actual performance evident, by presenting a table of cumulative annual growth rates based on the aggregate “200” totals. In the table and bar chart showing the 1997 and 2007 attendance totals, 2007 is lower than 1997, yielding an annual growth rate of −0.8 percent. Still, the consultant reports portray the 2007 attendance as well above the 1997 figure.

The gap between CSL and other consultants’ index numbers and reality is even more dramatic for 2009. The chart in the 2009 edition of the “200” shows the total attendance of 4.51 million in 1999 and 3.84 for 2009, noting a cumulative annual growth rate of −1.8 percent.

The figures on annual convention and tradeshow performance produced by Tradeshow Week thus have to be evaluated and employed with real care. By employing index values or percent change measures rather than actual totals, it has been possible for almost every industry consultant, including John Kaatz and Bill Krueger of CSL, Charlie Johnson of C. H. Johnson Consulting, Tom Hazinski and Hans Detlefsen of HVS, and David Petersen and Rob Canton of PWC, to overstate demand growth and provide an inaccurate picture of the industry. Such a picture would, of course, help local officials and business leaders make the case, in city after city, that a new or larger convention center would see a substantial and growing stream of new business.

PriceWaterhouseCooper’s Annual Convention Center Report

Where both the Tradeshow Week data sources, and the more recent Center for Exhibition Industry Research annual Index, sought to measure only the demand side of the convention equation, PriceWaterhouseCoopers has long tracked a series of measures of the actual performance of convention centers. The firm’s annual “Convention Center Report,” begun in 1985 by Laventhol & Horwath, covers just over 100 individual centers each year, with the most consistent reporting from larger centers in major metropolitan areas. These “Gateway Centers” are located in metropolitan areas with at least 30,000 hotel rooms and have at least 100,000 square feet in exhibit space, a group that amounts to some 30 centers each year. PWC also reports figures for two other categories of centers. “National Centers” are in metropolitan areas with between 15,000 and 30,000 area hotel rooms, or in areas with over 30,000 rooms but with less than 100,000 square feet of exhibit space. “Regional Centers” are located in smaller metropolitan areas, or are smaller or secondary facilities. The Convention Center Report only shows center performance on such things as occupancy and attendance purely as means, with no breakdown of data for individual centers. And it does rely on voluntary reporting by center managers. But it has the decided advantage of tapping real performance, separating center events between the conventions and tradeshows that generally draw out-of-town attendees and the largely local public or consumer shows, like an auto show or home show.⁵¹

PWC presented an analysis of the performance of Gateway Centers as part of its strategic plan for an expansion of the San Diego Convention Center, with a chart covering 1999 through 2007. In 1999, these centers averaged about 67 conventions and tradeshows, figures that excluded consumer or public shows. That total fell to some 59 for 2000 and 62 for 2001. No year from 2001 through 2007 has equaled those totals—the highest convention and tradeshow total since 2001 was 2003, at 56. The total for 2007 came to 53.⁵²

PWC included more recent data in its 2008, 2009, and 2010 Convention Center Reports. The firm reported an average of 57 conventions and tradeshows at Gateway Centers in 2008, with 55 in 2009. Thus the average count of conventions and tradeshows has consistently been below the levels of 1999–2001. The 2010 report, covering performance in 2009, brought an even more striking result: the count of conventions and tradeshows at Gateway Centers averaged just 51. In 2011, the average convention and tradeshow count was at 50, falling in 2012 to just 48.

The report for San Diego also included a chart of Gateway Center exhibit hall occupancy by conventions and tradeshows from 1999, a measure directly tapping the use of exhibit hall space. The occupancy rates for 1999 and 2000 stood at about 48 percent, with an increase to 50 percent for 2001. After 2001, convention and tradeshow occupancy fell to a low of 39.3 percent in 2003. Occupancy rates then hovered in the low 40s until hitting roughly 48 percent in 2007. The more recent editions of the annual Convention Center Report show an occupancy rate of 44.1 percent for 2008, 36.6 percent for 2009, 42.3 percent in 2010, 40.6 percent for 2011, and 39.2 percent in 2012.

Convention and tradeshow occupancy after 2001 has remained at levels below that for the 1999 to 2001 period, with the single exception of a boost in 2007. The most recent years have slipped back to the levels of 2003 and 2004. Paralleling the event count figures, recent exhibit hall occupancy has remained below the peak years of the late 1990s.

The figures for convention and tradeshow attendance are more dramatic than those for occupancy, and far more relevant to cities seeking to lure visitors. The average convention and tradeshow attendance at Gateway Centers for 1999 was about 620,000, followed by some 540,000 in 2000 and roughly 480,000 in 2001. In only one post-2001 year did attendance equal these earlier figures—an average of 520,000 for 2003. The total convention and tradeshow attendance in 2007 was just under 400,000. The attendance reported in 2008 and 2009 came to 419,300 and 416,300 respectively. The 2010 report showed attendance dropping even more to just 351,400—more than 40 percent below the 1999 figure. For 2011, a modest increase brought the attendance average to 410,900, but it fell to 387,400 in 2012.

PWC included a limited presentation of data on “National Centers” as part of its April 2005 report on a proposed new convention center for Cleveland. A chart in the Cleveland report included data on exhibit hall occupancy by conventions and tradeshows at these centers covering 1992–2004. Exhibit hall occupancy grew from an average of 30 percent in the early 1990s to some 40 percent for 1996–1999 and 31.2 percent in 2000. Occupancy then fell steadily to a low of 21.5 percent in 2003. The Cleveland analysis stated, “The decline in occupancy may be attributed to several factors, including economic conditions, and a growth in supply of exhibit space that exceeds a growth in demand of [sic] exhibit space.”⁵³

The most recent PWC data on National Center convention and tradeshow occupancy show an increase to 32 percent for 2006, followed by 27 percent in 2007, 25.1 percent in 2007, 25.1 percent in 2008 and 21.8 percent for 2009 and then 20.1 percent for 2010, 23.1 percent in 2011, and 22.5 percent in 2012. These recent occupancy levels are thus considerably below the average of 40 achieved in the latter part of the 1990s and the peak year of 1999, with about 42 percent occupancy.

The Cleveland report did not include a historical time series on events or attendance from National Centers. But the annual Convention Center Reports indicate an average convention and tradeshow attendance at national centers of 212,000 for 2003 and 217,000 for 2004. More recent years have seen average attendance consistently well below these two years, with 163,000 in 2007, 141,000 in 2008, and 169,300 for 2009. The 2010 report gave average attendance as 149,600, dropping to just 125,400 in 2011, and then rebounding in 2012 to 165,400.

These data tell a consistent tale. For both the Gateway Centers and the smaller National Centers, the peak levels of events, occupancy, and attendance came in 1999 or 2000. There were notable drops in all of these measures after 9-11. Although center exhibit hall occupancy rebounded somewhat after 2004, it subsequently fell in 2008 and after. Those increased center occupancy figures may simply reflect the discounts on space rental and incentives centers increasingly offered after 2001 to lure new business. And convention and tradeshow attendance—the central driver of economic impact and visitor spending for cities, the phenomenon that has spurred center building—failed to rebound to pre-9-11 levels, and then plunged to a new low point in 2010 or 2011. What there manifestly was not was evidence of a growing, expanding industry filling the nation’s convention halls with ever more attendees—just the opposite.

Summing Up the Growth Argument

Over and over, consultant market and feasibility studies for new or expanded convention centers have forecast a significant return in terms of new convention attendees, visitor spending, economic impact, and jobs. They regularly have tied those findings to a picture of the national convention and tradeshow market that describes a history of consistent growth in demand, with an optimistic outlook for continued future growth.

That picture was fundamentally misleading. Although some of the measures regularly employed by consultants such as Coopers & Lybrand, CSL, C. H. Johnson, SAG, HVS, and PriceWaterhouseCoopers did indeed show growth during the 1990s, that pattern shifted dramatically after 2000 and 2001. The total volume of annual convention and tradeshows for 2007 and 2008 was at or slightly below the levels of the mid- to late 1990s. The convention and tradeshow event count then plummeted in 2010.

Much the same image of an industry that remains below the peaks of the late 1990s is provided by the Tradeshow “200” data. Although overall exhibit space use has grown in recent years—perhaps due to the rampant discounting of convention center space rentals—total attendance remains below the peak years of 1990s, even as there has been an explosion in the growth of available convention center space. And the annual data series on actual convention center performance from PriceWaterhouseCoopers provides yet another set of metrics that mirror the story from the Tradeshow Week series. In terms of convention and tradeshow event counts, exhibit hall occupancy, and attendance, center performance has remained below the peak levels of the 1990s, with substantial declines after 2007 or 2008.

The growth of the national economy in the years after 2002 did not produce a parallel level of growth in convention center activity. It appears that demand had been “reset” to a lower level since 2001. Yet that conclusion is nowhere evident in the bulky consultant studies for cities from Boston and New York to Midland and Jackson. Instead, there has been a consistent invocation of the notion that convention demand is growing. Charlie Johnson could employ both Tradeshow Week and PriceWaterhouseCoopers data in his 2005 study for College Station, Texas, and offer the conclusion, “Despite the economic downturn that began in early 2000, the meetings market has remained fairly strong and a long term need for event space still exists …. It is up to the host community to capture that potential.” For Tucson in 2007, he could proffer the assessment, “The meetings and convention industry has expanded significantly over the past ten years in both supply of events and new and/or expanded quality venues but the Tucson Convention Center has not participated in this sector to any degree.” And in a 2007 presentation, CSL’s Bill Krueger offered an audience of local elected and economic development officials a series of slides on “The Recovery for the Biggest …” and “Decades of Growth for the Largest …”⁵⁴

Over and over, major industry consultants have either misread or misrepresented the data on convention and tradeshow demand. By focusing on a subset of years, using inaccurate annual percent change numbers, or basing their conclusions on an overly broad definition of events, they have succeeded in painting an upbeat and optimistic portrait of demand growth. That illusion of persistent growth could help justify “build it and they will come” recommendations for a remarkably broad array of communities, from the largest to the most modestly sized.

The reality of far more limited growth, even in the face of a continuing expansion of supply, is that the convention market appeared to be increasingly zero-sum. Las Vegas and Orlando succeeded in gaining some events and attendees with major expansions (at least prior to 2008). But their success came largely at expense of cities like New York, Chicago, and Los Angeles. Chicago, for example, saw its share of the “200” events plummet from 30 in 1993 to just 18 in 2008. And even Las Vegas and Orlando have failed to achieve the increased business they had been promised and anticipated.

The world of convention center activity changed over the years after 2001. The boom in center building had produced an oversupply of space. If the growing competition for conventions was not obvious to the consultants (or their clients) after 2001, it was evident to the industry, to both the local convention and visitor bureaus that market centers and the convention center managers themselves. In January 2006, a group of CVB heads and center managers assembled in Phoenix to begin to discuss the growing problems in selling center space. By that June, a series of presentations at the annual meeting of the Destination Marketing Association International in Austin noted the “Increased competition in marketplace” and “Price erosion.” Peggy Daidakis, director of the Baltimore Convention Center, described the growing use of “Opportunity Funds,” where “CVB’s are paying a portion of the Center’s rental; picking up transportation costs; covering the costs of ancillary charges,” and Bob Hodge, head of the Austin Convention Center, described how his city was “Pricing [the] Convention Center competitively within our market and allowing for discounts when business warrants.”⁵⁵

By 2007, discounts, incentives, opportunity funds, and offers of free center rent had become commonplace in the convention center world. Tradeshow Week reported in fall 2007 that fully 60 percent of centers maintained “incentive funds” to lure business. And when the joint study committee of CVB heads and center managers issued its report on center sales and operations in August 2007, the conclusion was quite direct. The report noted “the recognition that supply of available exhibit and meeting space across the nation currently exceeds demand, resulting in a ‘buyers market’” and that “The resulting ‘buyers market’ has exacerbated an already competitive environment, resulting in the need to discount rental rates or increase services that can create a competitive advantage.” That view of a “buyer’s market” and an oversupply of space was not particularly in evidence in the consultant reports.⁵⁶

At the same time as centers and CVBs were trying to buy business with discounts, the cost and difficulties of travel had grown, making attendance at a convention or tradeshow a more problematic investment for firms and organizations. The changed technology of communication and interaction, from PCs, tablets, and cell phones to virtual meetings and the Internet, had significantly altered communication and information sharing. Even where Indianapolis might lure an event from Kansas City, or Chicago beat out Baltimore for a convention, the number of attendees they would see likely would be far smaller than in years past.

Convention Demand and the Economy after 2008

The path of convention and tradeshow demand after 2000 and 9-11 demonstrates that the industry is far from insulated from larger economic forces. For 2002, Tradeshow Week reported a drop of 6 percent in exhibit space use and a 4.4 percent decline in attendance for the “200” events. The impact of the financial meltdown and recession of 2008 and 2009 has been, by all measures, even more dramatic, albeit not fully evident until 2009 and after.

The annual count of convention and tradeshow events from the Tradeshow Week Data Book provides one measure of the impact of the recession. The event total was 3,742 for 2008 and 3,745 in 2009. As events are commonly planned well in advance, the 2009 count did not immediately reflect any real change on the part of event organizers. Since the Data Book directory is prepared during the year before the events are held, it could not reflect meeting cancellations such as the decision by the American Society of Newspaper Editors to cancel its 2009 convention, made just months before its April date. But the 2010 event volume reflected a significant change, falling to 3,552. That amounted to a decrease of five percent, bringing the convention and tradeshow count to its lowest level since the data were first reported in 1994, clearly below the previous low of 3,648 in 2002.

Event cancellations do not directly affect the annual set of top “200” events. Instead, those events may shrink in size as exhibitors choose to reduce the size of their booths or simply not attend, and they can drop in attendance as firms, organizations, and individuals decide to reduce travel spending and cut back on event attendance. Tradeshow Week reported that in 2008 the “200” showed a 1.6 percent drop in exhibit space use and a 3 percent decrease in attendance.

The full brunt of the recession’s impact on the “200” came in 2009. Exhibit space use dropped 17.8 percent and total attendance 15.8 percent, to a level equal to that of 1989. There would be no “200” listing for 2010 or after—Tradeshow Week ceased publication in April 2010.

The dramatic drops in space use and attendance from 2008 to 2009 far exceeded the greatest fall-off previously seen: a drop in exhibit space use of 6.0 percent and an attendance drop of 4.4 percent, both in 2002. These recent changes can also be seen in the attendance performance of individual events, most accurately for the small set of events that have their attendance figures audited and verified by a third party. Audited attendance for the annual Rental Show in Atlanta in 2009 was 7,007, a drop of 35 percent from the previous year in Las Vegas. The 2009 INTERPHEX pharmaceutical event in New York saw attendance fall by 19.7 percent from the 2008 event in Philadelphia, to 12,343. INTERPHEX attendance slid again in 2010 to 11,739 and 11,100 in 2011. The 2009 Motivation Show for the incentive industry (consistently held at Chicago’s McCormick Place) witnessed a 26.6 percent attendance drop. Attendance dropped again in 2010 by 33.2 percent, to just 6,006—less than half the 2008 total.

The Las Vegas-based Global Gaming Expo, long a growing event, saw attendance fall 5.5 percent from 2008 to 2009, to 24,771. Attendance was again down in 2010, by 2.1 percent, and in 2011, to 23,648. And the annual convention of the American Institute of Architects had a 7.9 percent attendance drop from Boston’s 2008 total of 19,520 to 17,977 the next year in San Francisco. The 2010 meeting in Miami saw attendance fall to 15,574—a 13.4 percent drop. The 2011 event in New Orleans garnered even lower attendance, just 12,366, although the 2012 edition in Washington, D.C., saw attendance increase to 15,214.

Major convention centers have also seen substantial declines in convention and tradeshow attendance. At Chicago’s McCormick Place, attendance dropped 7 percent from 2008 to 2009, despite completion of a major expansion in August 2007. It fell another 4.8 percent in 2010 and 9.6 percent in 2011. The Las Vegas Convention Center saw attendance fall from 1.6 million in 2008 to 1.12 million in 2009, a drop of 30.3 percent. There was a slight rebound of 3 percent in 2010. Orlando’s Orange County Convention Center had a convention and tradeshow attendance drop of 21.8 percent in 2009, to about 780,000. It managed to make up a part of that loss in 2011, seeing attendance of just under one million—still shy of 2007’s 1.08 million.

Atlanta’s Georgia World Congress Center saw fiscal year 2008 (through June 30) convention and tradeshow attendance fall by 21.4 percent in 2009. and another 13.7 percent in 2010. The 2010 convention and tradeshow attendance total of 473,448 was demonstrably smaller than the 601,000 attendees the GWCC had accommodated in 1989. A modest increase brought attendance almost back to the 2009 level, at 539,680.

Other major destination cities also saw dramatic declines in convention center business. New York City’s Javits Center saw its convention and tradeshow attendance fall from 817,100 in 2007 to 708,200 the following year and 633,600 in 2009. The hotel room nights produced by the Walter Washington Convention Center in the nation’s capital fell from 376,296 in fiscal year 2008 to 280,478 in fiscal 2009. The room-night total dropped again in fiscal 2010, to 274,951—a decline of 26.9 percent from fiscal 2008.

Whether for individual major events or for large and historically well-performing convention centers, two conclusions stand out regarding recent change. First, the drops in attendance have been remarkably pervasive, across a broad array of events and centers, including centers that have long dominated the industry. Second, the scale of attendance and hotel room night decline has been substantial, indeed remarkable. Those declines substantially exceed the fall-off in attendance in the years immediately after 9-11. Indeed, for convention centers in cities such as Atlanta and San Francisco, they represent a return to attendance levels seen a decade or two earlier, effectively wiping out the growth of the 1990s. This magnitude of attendee loss suggests a dynamic very different from what was seen after 9-11. For example, the Las Vegas Convention Center witnessed an attendance drop of 3 percent in 2002, followed by a further 6 percent in 2003. The center’s attendance drop of 30 percent from 2008 to 2009 is of an entirely different order of magnitude, an experience paralleled by many other centers.

The full import of the change in convention center attendance will only become clear over future years. But compared to the impact of previous recessions, the change in 2008, 2009, 2010, and 2011 suggests a sea change in patterns of attendance and convention activity. One assessment was provided by the senior staff of New York’s Javits Center, in a December 3, 2010, presentation to the center’s board on “Maximizing Economic Impact.” After slides noting the “Sales Challenges” faced by the Javits, the presentation included a slide titled “Relevant Industry Trends.” The slide’s bullet points noted “Oversupply of convention center space” and “Economic challenges to convention center customers.”⁵⁷

The Javits Center staff was fully aware of the impact of larger changes on the convention business. Javits convention and tradeshow attendance had fallen by 22.5 percent from 2007 to 2009. The “oversupply of convention center space” was not something that would go away after 2011 or 2012. A number of cities—Philadelphia and Indianapolis, for example—were about to complete major expansions at the time of the Javits presentation. And other cities—Boston, Cleveland, Nashville, San Diego, Seattle, Los Angeles—are building or planning center expansions. That continuing increase in supply acts to provide a counter to whatever attendance rebound might take place in the future.

The View from the Consultants

While terms like “oversupply of space” or “buyer’s market” were part of the industry’s discourse by 2009 and 2010, they were not part of the analysis by the small group of convention center consultants. Assessing the state of the convention and tradeshow market for Boston’s “T5 Partnership” in February 2010, John Kaatz of CSL International “showed the linkage between the economy and the events industry and suggested that in the future meeting planners believe this linkage will stay tightly related.” He illustrated that point with a chart of “Convention and Tradeshow Industry Growth Measures” from Tradeshow Week’s “200” data, adding a line labeled “Real GDP.” The lines for exhibit space use, number of exhibitors, and number of attendees showed steady growth through 2007. For 2008, the exhibitor and attendance counts showed a modest decline. But as if to reassure the partnership members, the chart’s line (shown in red) for Real GDP continued beyond 2008, showing strong upward movement in 2010 and 2011. If the “linkage” was indeed “tightly related,” the measures of convention demand would no doubt soon be on a similar upward path.⁵⁸

Kaatz also presented charts of the Boston Convention and Exhibition Center current and projected future occupancy. While center occupancy was shown as falling from 63.2 percent in fiscal 2008 to 53.2 percent in fiscal 2009, the chart indicated occupancy rates rising to a steady 70 percent for fiscal 2011, 2012, and 2013. Jim Rooney, CEO of the Massachusetts Convention Center Authority, concluded the February 2010 session with the observation that the “Tradeshow marketplace continues to grow and our competitors are growing physically in size and service offerings to meeting planners.”