In an uneven global economy that is still recovering from recession, convention centers around the world experienced decent growth in 2012. Venues worldwide collectively expanded gross revenue by 6.7 percent in 2012. This is a 1-percent increase over the growth rate in 2011.
Nevertheless, venue managers are cautious about this year. For 2013, the collective forecast is for only 1.4-percent top-line revenue growth worldwide. Every region except North America expects slower revenue growth in 2013 than in 2012. Last year, North American members of the International Association of Congress Centres (AIPC) said their revenue increased by only 1.1 percent; this year they are more optimistic, forecasting 3.3-percent growth.
For the fourth year, the AIPC and Red 7 Media Research & Consulting have conducted a study of the association’s 170 member convention centers around the world. The study was conducted in May and June.
In 2012, attendance at member venues collectively expanded by 2 percent. Attendance-wise, the strongest region was Asia with more than 12-percent growth. This year, members are forecasting slightly higher overall attendance growth, about 2.7 percent. In a good sign, North American member venues are forecasting a strong 4.5-percent jump in attendance this year, compared to an essentially flat 2012.
As a result of this growth, changing event client requirements, increasing competition and a backlog of projects delayed by the economic downturn, centers and governments are now making substantial investments in the industry. More than 60 percent of AIPC members are currently expanding, renovating or planning a significant project for their facilities.
Two Different Venue Views
While overall industry growth has been good, analyzing the responses further shows that there are essentially two groups in the venue industry today. There is the 52 percent of members around the world who see a moderate to strong economic recovery, and there is the 48 percent who say the recovery has been weak or non-existent.
When asked about the remaining risks to the recovery that are specific to the convention center business, the top three responses were:
• growing competition from other centers and regions (68 percent)
• slow or weak business growth by event clients and venue users (56 percent)
• hotel availability and pricing (32 percent).
In response to this mixed growth picture, another key trend seen over the past few years is that of leading centers becoming more entrepreneurial and adding new revenue streams. Forty-five percent of the responding venues added a new revenue stream in the past year.
A persistent trend is that of event management clients negotiating more with venues. Eighty-eight percent of venue managers say they are seeing increased negotiations and requests from event producers, most often for discounts.
Association conventions with exhibits receive the highest responses from members worldwide when considering the types of events that provide the best opportunity for current or near-term growth.
In contrast, the North American venues said the following are the top three client and growth sectors:
• national and international corporate meetings
• consumer shows
• local corporate meetings.
The convention center industry is quite diverse and geography is destiny in many ways. The attendance growth expected for this year and investments in expansions, renovations and technology suggest the outlook is improving.
Michael Hughes is managing director of research and consulting at Red 7 Media, a division of Access Intelligence and parent company of Expo.