At The Center
Outlook bright for Canada's Convention Facilities

By Ilona Kauremszky

Business travel has slowed down worldwide. Travel budgets are tighter. And closer to home, the effects of mad cow disease, SARS (severe acute respiratory syndrome) and the strengthening Canadian dollar have added challenges to an already overburdened convention industry. Throw into the spokes the ever-expanding facilities on the international scene and it translates into a convention landscape that requires constant reinvention. Since 9/11, there is a new norm. The world has changed, including the state of affairs in the convention centre industry.

Fast forward to early 2003. Representatives of 17 convention centres across the country met and formed the Convention Centres of Canada association, which promises to focus on three areas of activity - enhancement of facility and service quality, development of a more strategic approach to marketing Canadian convention centres and growth in the role convention centres play in the overall economy.

Aside from market research, development of benchmarking and performance measures, education and training, and the creation of industry marketing strategies, Canada's new convention association wants to create recognizable national standards, giving clients more confidence in the product. Cameron added that despite the general business travel slowdown, in the meetings and conventions area, the effect was highly variable. "In general, corporate meetings were impacted more than association conventions. Overall, 9/11 and its aftermath had remarkably little effect on Canada's convention business, more from reduced attendance than from outright cancellations. SARS had a much greater impact, but it was restricted to certain parts of the country and may be expected to have a limited duration."

According to some international studies, Canada's meeting and convention business has rebounded from the 2001 "dip" much faster than in other parts of North America, and that has led the recovery of travel overall.

"Convention delegates seemed, on average, to have been much more inclined to travel than leisure travellers and that helped sustain hotels and other tourism infrastructure during the tough times of the past few years," Cameron noted. Other trends include:

1. Reduced attendance at some events, particularly from U.S. attendees

2. Reduced investment in non-essential activities in favour of more business development activities
3. Replacing in-house staff by "third party" meeting planners as a result of corporate cutbacks
4. A drop in traditional incentive programs in favour of corporate meetings with an entertainment component

Despite the fallout from mad cow disease, SARS and the war on terrorism - trends felt in various regions of Canada - business around the halls of the Penticton Convention Centre remains unchanged.

In fact, Jim Owens, the centre's general manager, said the number of conventions has increased by about 20 per cent over the past five years. There has been a drop in the number of delegates attending conventions, however. "We estimate approximately 10 to 15 per cent," he said.

One trend Owens noted involves a significant increase in the use of food and beverage services. "We believe that's mainly because it is more convenient for conference organizers to focus on the conference venue and not have to look outside. Most conventions offer a free evening for delegates, allowing them to enjoy the many restaurants in the community," he concluded.

Prepared to host the 2004 Convention Centres of Canada annual convention, Owens said hosting such a convention couldn't have come at a better time.

"Very few of the members have had an opportunity to visit our community and see our facilities. As a 'Tier 2' convention city, Penticton is not a city which many of our colleagues would travel to for business reasons."

Nestled in southern British Columbia, the community of 33,000 residents recently witnessed the completion of a major $5-million renovation of the centre that included several technology updates. "It's interesting to note that our client return rate has increased significantly. We have quite a number of clients who have re-booked for multiple years," Owens said.

On Calgary's convention scene, meanwhile, there's a new client sector to add to the usual mix of medical and education associations and oil and gas companies. The corporate sector has also been added to the Telus Convention Centre's client list.

"We're marketing more aggressively to the corporate market than five years ago and we're continuing to increase our efforts in that area," said Marcia Lyons, general manager of the centre, citing such breakthroughs as hosting conventions for Canadian Tire and Snap-on Tools last year.

No doubt the increased corporate interest has been fueled by the completion of a major expansion in 2000. "The expansion improved our ability to compete for conventions with tradeshows, and we have experienced growth in both the numbers and sizes of these events," said Lyons.

Further east Toronto, the president and CEO of the Metro Toronto Convention Centre admitted it's been a tough year, especially with the fallout from SARS. "I've heard this is going to take 18 to 24 months of recovery," said Barry Smith, who oversees Canada's largest convention. In total, this year, the MTCC faced 16 cancellations of major conventions including the highly publicized cancellation of the American Association for Cancer Research convention, which occurred during the SARS crisis.

Despite the slow recovery, Smith had an air of optimism as he considered the Toronto Tourism Industry Community Coalition, recently formed between Tourism Toronto and the Ontario Tourism under a new provincial government recovery program. In early September 2003, the TTICC was awarded $14.3 million by the Ontario government to market and sell Toronto as a top-of-mind destination.

Smith applauded this latest effort, saying the achievement has "permitted everyone here to get on the same page. Necessity is the mother of invention." More FAM (familiarization) trips and better opportunities among meeting planners have been some of the results of the new coalition.

One of the biggest challenges Toronto faces lies in destination marketing. "Most cities have a hotel tax; we don't," said Smith about the growing need to brand Toronto among convention-goers internationally. However, it's hoped the boost from the new coalition and provincial government recovery program, along with membership in the newly formed Convention Centres of Canada, will help to address the issue of destination marketing.

While the MTCC saw an increase in business during October and November, there is still the tough competition of outside markets with which to contend. "More cities are getting in the competition. Convention centres are modernizing and expanding, so the supply is increasing faster than the demand, which results in more competition," Smith said.

However, Toronto's unique geographic position as a major international gateway and the MTCC's location in the hub of corporate Canada with direct access to public transit, blocks of hotels and the completion of a major expansion in 1997 have been strong assets for convention goers.

Like other industries, the convention centre industry relies on market trends. In Toronto, the slump in the high-tech industry has resulted in a decrease in high-tech meetings, while stronger markets in the medical sector have fueled more conventions and conferences among medical associations.

Known as a "second-tier" city after its first-tier cousins, Toronto, Vancouver and Montreal, London's convention centre has attracted various associations over the years for their convention needs.

Like many centres across Canada, the London Convention Centre, too, has experienced a business slowdown that Britta Winther, general manager, said can be attributed to such factors as fewer corporate bookings due to companies' financial positions, resulting in fewer delegate arrivals.

"Established events are still taking place but the numbers may be down, so companies may decide not to buy a table at a gala dinner. The situation we find ourselves in is quite discretionary," she said, adding that these days one of the trends has been a shorter lead time for bookings.

"Lead time for conferences continues to shrink as opposed to 10 years ago," Winther noted, citing the fact that, often, corporations are not booking a year ahead.

Unlike Toronto, which faced heavy convention cancellations, the LCC encountered only a few cancellations with a drop in attendance levels during the SARS outbreak.

Earlier this year, the centre secured an international conference it had lost to England in past years. "We're very excited to be hosting the Canadian Centre for Activity and Aging International Conference, a week-long event that'll occur in June."

In addition, the centre has witnessed the return of such older clients as the Federation of Canadian Municipalities (FCM), which last used the venue almost 10 years ago.

When it comes to a slump caused by business travel slowdown, David Chizda, director of sales and marketing at the Winnipeg Convention Centre, noted there's been no decline in convention business and "not even a hiccup in trade shows, general meetings, conferences and gala dinner business.

"Some hotel and accommodation travel may have been affected in the short term as a result of SARS," he said, "but that negative effect was very limited for Manitoba."

The centre has experienced steady growth of meeting business and facility bookings since 1998, the slowest year, when it hosted 13 conventions.

"Since then, we've consistently hosted approximately 30 annual conventions," said Chizda. "We have exceeded the 30 convention level in 2003 and 2004, and we are forecasting that this trend will continue to increase in future years."

For future prospects, the centre has identified a large number of meetings and assemblies it was unable to book in the past due to size restraints. In 2002, the centre put forward a plan in favour of expansion to local and provincial politicians as well as the community.

"Further action will be at the discretion of our funding partners," noted Chizda.

As a venue located in the country's centre, the newly decorated facility makes Winnipeg truly a middle ground for international events, Chizda said. "Our mid-continent isolation makes us safer and likely easier to secure."

Martin Linlove, senior sales manager of the Shaw Conference Centre in Edmonton, said convention business tends to be cyclical and 2003 was one of the down years for "everyone here in Edmonton," which Linlove attributed to SARS, mad cow and 9/11.

"This is based, in part, on how the associations are rotating their conventions, east and west," he said.

"The only other change is more concern over contractual issues concerning the force majeure, insurance, cancellation and indemnity clauses. More than ever before, the meeting planners are having their lawyers look over the contracts and trying to refine these clauses." Linlove is confident business levels will return in 2004 and 2005, as the centre prepares to undergo a $24-million expansion.

Reflecting on the past year, Barbara Maple, general manager of the Vancouver Convention and Exhibition Centre (VCEC), agreed that, as everywhere, the year was extremely variable. Citing the impact of 9/11 followed by a period of both economic and travel industry disruption, Maple said the centre was "pleasantly surprised" about the minor impact these events had on business.

"We've only had a couple of outright cancellations with most events rebooking within 12 months," she said. "The challenge for everyone in the industry is to keep face-to-face meetings relevant in a time of increasing technology and the growth of other communications vehicles. We need to do more in the way of enhancing the delegate experience, since attendance is the biggest single factor that will influence the future of meetings and the associations that hold them."

Like most venues, the VCEC continues to adapt and upgrade its services to meet demand. The VCEC recently announced plans for a major expansion scheduled for completion in 2008 that will triple the size of the centre.

With the announcement of the 2010 Olympics and a recently renovated facility, business at the Telus Whistler Conference Centre appears better than usual for the popular destination renowned as the skiing and snowboarding hub of Canada. Still, some business trends have affected the centre, said Lynda Gilroy, director of meetings and incentives. "When it comes to business slowdown, generally, corporate meetings were more negatively impacted than association conventions. With corporations, this has resulted in shorter booking trends, a hesitancy to commit, with meetings put on an indefinite holding pattern," she said.

"On the association side, attrition has become a major concern and meetings are shorter with less food and beverage events, which negatively impacts convention centre bottom lines. The good news is that association meetings continue to book and this segment provides a solid future foundation for destinations and conference centres such as Whistler to build upon."

"We believe Canada has a great future in the conventions area," concluded Rod Cameron of Convention Centres of Canada.

"Canada has a variety of convention facilities with a recognized high quality of services and facilities. We're increasingly seen as a middle ground, both geographically and politically, for international events on rotation and we're strategically located to take advantage of a desire by U.S. planners and delegates to locate in a foreign destination that nevertheless has a familiar feel to it, particularly amongst those organizations looking to demonstrate their international nature by rotating out of the U.S."


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