July/August 2004
Exclusive Series: Managing Hotel Shows
Part II: Evaluating a hotel vs. a convention center for your next show
By Maxine Golding
If your convention calls for a lot of meeting space, hosts an exhibition that’s not the only focal point of the event, and succeeds best when self-contained, then a hotel may truly be a better choice of venue than a convention center.
The competition, though, is intensifying for the thousands of trade shows and events — association, for-profit and corporate-sponsored — held each year exclusively in hotels. First, new and upgraded convention centers with expanded inventory are aggressively pursuing shows that typically use hotels. Second, some shows that comfortably fit convention centers for years have shrunk in size in tandem with the economy and industry consolidation, enabling hotels to vie once again for the business.
Finally, plenty of hotel-based shows continue to grow, positioning convention centers and expo hotels as direct competitors. It’s a good time, then, to examine the pros and cons of the hotel venue for expositions.
Maxine Golding has reported extensively on the meetings industry during a 25-year career as editor, writer and publisher. She can be reached at maxinegold@earthlink.com.
The Right Fit
Evaluating the pros and cons of holding your show in a hotel vs. a convention center
Checklist: Maneuvering Move-in and Move-out
When comparing venues, review these move-in/move-out considerations and be sure to discuss any concerns with your facility sales rep
Heavy on Space
Case Study: Growing requirements challenge ACPA’s preference to be self-contained
What’s Negotiable and More
Cost-saving tips and other considerations for holding your show in a hotel.
The right fit
Evaluating the pros and cons of holding your show in a hotel vs. a convention center
Successfully matching a show and venue is more art than science. Many show managers believe that keeping their audiences captive in a hotel, rather than utilizing a convention center, represents the best path to profitability and attendee and exhibitor satisfaction.
“Our forum works in a hotel. Everything is there, and attendees like it,” says Brandi Felser, MBA, CMP, Vice President, Meetings and Special Events, Community Anti-Drug Coalitions of America. The 2,100-attendee annual meeting is coming off a 17 percent growth spurt.
It’s easy to see why. “The hotel is the single environment with close proximity of exhibit hall to meeting space, to restaurants and bars, and to sleeping rooms,” says Fred Shea, Vice President-Sales, Hyatt Hotels Corp. Plus, locating an entire convention in one hotel gives it a “more intimate feel and allows for networking and interaction that might be lost” by attendees walking or riding shuttle buses, adds John Thiesfeld, Director of Sales, Hyatt Regency Atlanta.
This assumes that key fundamentals are in place — the property must fit the show requirements for meeting and exhibit space, as well as sleeping rooms. Even if the exhibition is secondary to the meeting’s primary goal of education, it’s often a substantial financial piece. If all revenues come from the show floor, a show organizer needs a facility that can take care of exhibits and provide ample room for growth.
For a show that fits in either a hotel or convention center, a show organizer must go broad in assessing all its needs. “In a convention center, I can get Hall A and maybe only 12 meeting rooms. In a hotel, there’s a good chance I can get all the space,” says Teri Tonioli, Vice President of North-Central Region, Conferon Inc. “But because of choice of location, my group may be a better fit for the convention center.”
Price is right
Price is as important as fit, and the hotel business model can mean lower costs for a show organizer. Key profit centers — sleeping rooms and catered food and beverage (F&B) — allow hotels to play off meeting and exhibit space charges and still maximize revenues in a booking window.
“Large convention hotels want to bring in groups, so they’ll generally commit all the meeting space over peak days to a group that uses 80 percent of guest rooms,” says Jon Lockwood, Director of Sales and Marketing, Renaissance Washington. “And hotels often waive meeting space charges if they can fill guest rooms and book events planned around food and beverage.”
While every hotel figures its own formula, the Walt Disney World Swan and Dolphin Hotel in Lake Buena Vista, FL, bases its F&B minimum on revenue per group room night. This can vary from $97 up to $145, depending on the booking window, with more flexibility in shoulder season or a booking gap. Throw in commissions and rebates on guest rooms, complimentary room concessions, and upgraded accommodations for VIPs, along with free meeting space, and the hotel package can be extremely competitive.
Convention centers, meanwhile, rely on exhibition hall charges, meeting room rentals, fees from utilities and commissions on third-party vendor usage for revenue. Charges are often “a la carte,” compared with “bundled” in hotels, generating some complaints among show organizers of “nickel and diming.”
PPAI Expo anticipated trade show costs would rise when it moved after a quarter of a century at the Dallas Convention Center to the Mandalay Bay Convention Center in Las Vegas. However, cost savings on rooms, entertainment and F&B balanced higher prices for some services. More importantly, attendance grew 35 percent the first year, a true “value proposition,” says Darel Cook, Director of Expositions & Meetings, Promotional Products Association International. And to make sure prices are competitive at all times, no long-term agreement was signed.
“You have to pay attention to every single service that’s available to the attendee, from the coat check to the business center,” he adds. For example, PPAI was expected to pay for the exclusives at Mandalay Bay. However, the association offers a Package Mail service for attendees to ship catalogs home, and the business center at the facility couldn’t possibly handle the volume of 4,000 boxes. So PPAI negotiated the option to hire a company with the required expertise.
Unfortunately, “a lot of hotels fail to tell customers upfront what they’ll have to pay for,” says Bob Nicoli, Director of Convention and Conference Services, Walt Disney World Swan and Dolphin Hotel. “Contracts can’t cover everything, so it behooves every planner not to overlook the details.” Hotels may charge for schoolroom sets or removing waste, “things that meeting planners claim they never paid for before,” he says. But hotels often supply tables and chairs, which convention centers typically don’t, adds Ed DiAntonio, Director of Catering for the Walt Disney World Swan and Dolphin Hotel.
While in the majority of cases shows will see their own costs go down in a hotel, their exhibitors’ costs are likely to rise. “The logistics of moving in a show — equipment, freight, decoration and such — make it more difficult and labor-intensive” for individual exhibitors, says Mike Bruley, Vice President, Sales Administration, The Freeman Cos. A convention center may have 50 docks for access, and forklifts can drive all the way to a booth. A hotel’s two docks are shared with the catering department, and freight may be handled three or four times on its way to the exhibit floor.
It’s all in the package
A hotel can use packaging to sway the site selection decision in its favor. When negotiating with a single entity, the total value of the show’s components — room block, meeting space, F&B — comes into play. But just as important are the numbers beyond the master account: what vendors spend in restaurants, exhibit suite entertaining, and private F&B functions, as well as meetings pre- and post-show. Such clout can be lost in multiple negotiations with convention centers and third parties. Also, convention centers, whose rental rates are often dictated by government entities that own and operate them, may not have flexibility on such items as room turnovers and meeting room charges.
Hotels, however, become more flexible when the customer does. “If F&B events take place in the exhibit hall, a group is not using as much meeting space, which provides us with more assets to sell,” says Bob Moore, Director of Conference Services, Gaylord Opryland Resort and Convention Center in Nashville. And because hotels make their money on rooms, exhibit space in the picture helps guarantee the room block.
Union rules in a convention center can become an issue when they increase set-up and labor costs for the meeting room space. As a result, some groups choose to use only the exhibition space at a center, and house meetings in an adjacent hotel, where labor and audiovisual costs will be considerably less, says Tonioli.
It’s vital, then, for show organizers to sweat the details upfront when they can negotiate the best package. Savvy organizers who can fill booking windows definitely gain the upper hand. And those who can make a multi-year commitment come out big winners. “Such contracts reap huge benefits and savings, with concessions — from room rates to rebates on F&B to reduced charges on the convention floor,” says Nicoli. The Walt Disney World Dolphin and Swan Hotel even puts discounts into their contracts that incentivize planners to deliver their materials on time.
Security. While it’s obvious that hotels feature fewer entrances and exits than convention centers, less noticeable is the fact that their physical plants operate 24 hours a day, staffed by management and security professionals at all times. Convention centers do open and close for business. That hotels are public and open around the clock, though, has a flip side — more bodies are always “floating through,” as one hotelier put it. Consequently, additional security issues may arise in the hotel environment.
Meeting rooms. “A show that needs a lot of breakouts along with good exhibition space has a good chance of remaining in a hotel,” says Teri Tonioli, Vice President of North-Central Region, Conferon Inc. However, a show cannot expect to command all the meeting space it wants unless at least its room block and F&B guarantee satisfy the hotel’s revenue requirements for that piece of business.
F&B. Hotels have more control over F&B simply because it’s an in-house operation. “Convention centers outsource F&B, and whatever the agreement or split with the vendor, they just don’t have as much leverage on pricing,” says Tonioli. “For hotels, it’s all profit.”
Other services. Similarly, because audiovisual services from third-party suppliers at hotels are not usually strapped to union issues, as they are in a number of convention centers, hotels may be willing to take a hit on their share of revenues and discount A/V as part of the show package. Indeed, hotels can negotiate discounts for a host of services: business center, T-1 lines, telephone, and even free restaurant meal coupons, says Brandi Felser, MBA, CMP, Vice President, Meetings and Special Events, Community Anti-Drug Coalitions of America.
Decoration and freight. Carpeting is standard in hotels, and this can mean significant savings for the show budget. In addition, hotels generally don’t need much draping and graphics, compared with a convention center. On the other hand, hotel guidelines as to what can be hung from ceilings and walls will be much more stringent than at convention centers. Also, hidden costs and fees at hotels may arise from shipping and receiving, freight elevator operation and room drops.
Checklist: Maneuvering Move-in and Move-out
When comparing venues, review these move-in/move-out considerations and be sure to discuss any concerns with your facility sales rep.
 Hotels are very possessive of “time.” To maximize bookings, they tend to allot less time than convention centers for move-in and move-out of shows. The upside may be fewer hours of labor and consequently lower charges. The downside: Community Anti-Drug Coalitions of America was forced to set up a stage overnight, using more labor and paying overtime, to meet move-in — on a holiday to boot, says Brandi Felser, MBA, CMP, Vice President, Meetings and Special Events.
If your show absolutely requires extended move-in and move-out, the convention center will be your best bet. However, be certain of the amount of time needed — additional days at a convention center can be very expensive.
The hotel’s infrastructure may not be as accommodating as a convention center, which is generally built for ease of movement. Still, some downtown centers may be less easy to maneuver than hotels that have specially designed exhibition spaces and access.
Hotels generally provide more exclusive services than convention centers to control both space and the move-in/move-out process. However, this doesn’t necessarily mean “more expensive,” says Fred Shea, Vice President-Sales, Hyatt Hotels Corp. A show may move in and out faster with a hotel’s exclusive decorator in place because of its familiarity with the venue.
Hotels’ 24-hour-a-day operation can help show organizers optimize some labor costs, although overtime pay scales will come into play outside of standard business hours at all venues. “If you build a relationship with staff and can show flexibility, you may be able to get in and out on straight time,” says Bob Moore, Director of Conference Services, Gaylord Opryland Resort & Convention Center, Nashville, TN.
To better compete with convention centers, many hotels have built or renovated their exhibit halls. If you’re considering a hotel facility that isn’t, you may have to deal with low ceilings, limited utility access, limited floor load capacity, exhibit halls on upper levels, and multiple-use loading bays.
If you’re a show organizer who prefers exhibits to be located next to the general session meeting room, the exhibition may have to utilize a ballroom without street-level load-in. Freight elevators, sources acknowledge, do complicate move-in and move-out.
Dock control has taken on new meaning in the aftermath of 9/11. No longer can a truck show up unscheduled and gain access to the hotel loading dock. “A truck used to honk, and then back in,” says John Thiesfeld, Director of Sales, Hyatt Regency Atlanta. “Not any more.”
Many hotels with exhibition facilities require all freight to flow through a single drayage company. This can be more time-efficient (one-company billing) and cost-efficient (flat-rate charge) than at convention centers. Moreover, security is enhanced since the drayage company’s own employees load and lock trucks until they’re unloaded at hotels.
Security may be easier to control in hotels because they’re smaller than convention centers and feature far fewer entrances and exits. “The larger the venue, the more doors to get in and out and the more security will be needed around the perimeter,” says Mike Bruley, Vice President, Sales Administration, The Freeman Cos. However, some hotels will charge show organizers for additional security when a general services contractor is unfamiliar with the facility is used.
Know the rules and charges for shipping and receiving and negotiate changes upfront. When 4,400 program books were shipped directly to a hotel, says Peter D. Brown, Assistant Executive Director of the American College Personnel Association, the property wanted to charge a “ridiculous amount” per box instead of a pallet price. “It’s not like a bellman received them — they were driven in,” he says.
Consider utilizing the same facility contractors as the shows coming in before or after yours. You’ll find pass-along savings and possibly “no charges” on equipment and materials, such as carpeting and pipe-and-drape.
Watch for extra charges for air conditioning during move-in at a convention center, which are surprising some show managers. With a hotel-based event, one Conferon client saved close to $20,000 on this new wrinkle.
Heavy on Space
Case Study: Growing requirements challenge ACPA’s preference to be self-contained
Net square feet of selling space makes no sense to Peter D. Brown, Assistant Executive Director of the American College Personnel Association (ACPA). Yes, ACPA’s annual convention needs 100,000-plus square feet, but not for 50 exhibits that sit in a separate 20,000-square-foot space. It’s for a giant interview area holding 550 tables placed every five feet, so that 700 employers can conduct 8,000 job interviews with 1,000 candidates during the meeting’s placement service.
That’s just one requirement making it especially challenging for ACPA to meet in its preferred environment — a hotel. Here are others: The employer resource area with its many computers, private areas for those with special needs, 37 concurrent meeting sessions in 11 time slots, and the board of directors’ insistence on “no busing.”
The ideal for the 4,400-attendee meeting is to be self-contained, but many hotels just don’t have the space to also host 45 to 60 “in conjunction with” (ICW) events on consecutive nights, as well as 10,000 square feet of tabletop exhibits. It wasn’t until recently that growth forced ACPA to partly move into a convention center. In 2005, though, ACPA convenes under a single hotel roof at the Gaylord Opryland Resort & Convention Center in Nashville.
Many cost variables serve as pressure points for this nonprofit educational organization. ACPA works especially hard to negotiate the best terms on space and rates that give members the best deal. “A huge plus for a hotel is that when you use a lot of sleeping rooms, you’re not paying to rent meeting space,” Brown says.
He uses this to ACPA’s advantage, even when placement interviews and exhibitors have to be located in a convention center because of hotel limitations. Rather than incur room reset charges at the center, he places ICWs and receptions in the host hotel, which fulfills F&B guarantees.
Another cost saving: The room set for all educational sessions is standardized theater-style. If ACPA is in a convention center, the meeting rental fee generally includes one room set; no changes mean no added charges. When ACPA is in a hotel, the standard room set speeds “refreshing” between sessions and saves labor for the hotel. “If you maximize your turns,” he adds, “you may be able to use that to your advantage” when negotiating other aspects of the meeting.
Hidden costs pose the most potential for trouble. Some expo hotels place a premium charge on exhibit space, Brown says, especially when the market can command a high return. There might be a per-box charge for receiving, in addition to the general services contractor charge for drayage. A second floor back corridor might require extra security to maintain the integrity of the area. And exclusives clearly rankle Brown.
He runs into more exclusives with a hotel than a convention center contract. Brown can understand those for F&B and rigging, but not others: “A $200 charge for patching into a house system? I think not,” he says. “Still, it’s probably more advantageous for us to stay within one hotel, especially if we can save $60,000 to $80,000 on meeting space rental.”
On timing: “It’s no big secret, but if you’re able to move your pattern and fit in an open block between shows, that’s your best opportunity for negotiation,” says Peter D. Brown, Assistant Executive Director for the American College Personnel Association (ACPA).
On F&B: “I don’t like F&B minimums or attrition clauses related to F&B,” says Brown. “As a nonprofit educational organization, ACPA has to temper its F&B functions, but I can show a history over a number of years of what to expect. For example, our ‘in conjunction with’ events will overtax the hotel if so many bar setups are requested. Instead, we centralize cash bars on different floors. People go from their receptions for a drink and back, and we make our minimum.”
On contracts: “The fewer I have to go through, the better,” he says.
On budget issues: “Our attendees are new graduates with masters’ degrees who pay their own way — registration fee, driving or air costs, and hotel stay,” Brown says. “Yet, we have to meet during spring break.” So Brown chooses properties where he can hold the line on room rates, consequently attract more attendees, and use the larger room block to negotiate more free meeting space.
On inventory: “Find out a hotel’s true inventory of tables, chairs and skirts,” he says. “Some can only fill about a third of their rooms at one time. Will you have to rent at their cost or yours?”
What’s Negotiable and More
Cost-saving tips and other considerations for holding your show in a hotel
If you’re moving from a convention center to a hotel:
• An exhibition that’s small to a center often rates as a big show in a hotel, and will gain more contract benefits on terms by leveraging the room block, exhibition and meeting space, and services required.
• If the exhibition space is not built on the hotel’s foundation, there may be limits on the weight it can hold; rarely is this an issue with convention centers. However, ballrooms on upper floors that serve as hotel exhibition spaces offer nicer views and better aestethics than a convention center’s concrete walls.
• Is the hotel really geared to handle exhibits? “Every hotel will place exhibits in a ballroom, but probably fewer than 10 percent of hotels really know how to manage large exhibit shows and understand the show manager’s perspective,” says Jon Lockwood, Director of Sales and Marketing, Renaissance Washington.
• The show organizer and decorator need to know which services the hotel provides and which are the purview of preferred vendors. Hotels typically handle more of the cleaning, shipping and storage in-house than a convention center, says Bob Moore, Director of Conference Services, Gaylord Opryland Resort & Convention Center in Nashville.
• Always question the guarantees on performance by exclusives. “If you’re forced to use them, what retribution do you have should there be issues?” asks Darel Cook, Director of Expositions & Meetings, PPAI.
• Make a detailed review of ballroom and exhibit regulations, so that you are clear what is and is not allowed. “Every region or community has its own jurisdictions regarding fire prevention and safety regulations,” says Bob Nicoli, Director of Convention and Conference Services, Walt Disney World Swan and Dolphin Hotel. And the hotel may outline its own set of requirements.
• Convention centers may have an advantage over hotels in being able to more effectively separate one group from another. Still, hotel ballrooms are often placed far apart, creating a natural separation.
If you’re holding a show in a hotel venue for the first time:
• Negotiate ways to lower risk. “When you’re not sure how big a show will be, a hotel can work with you on room revenue and F&B in ways that a convention center can’t,” says Fred Shea, Vice President-Sales, Hyatt Hotels Corp. But make sure you understand all discounts and allowances relative to your room block pick-up and food-and-beverage guarantee, says Mike Bruley, Vice President, Sales Administration, The Freeman Cos.
• Maximize traffic to exhibits. A hotel can ensure that space is blocked correctly so that attendees pass exhibits on their way to and from general sessions, explains Alvarez Davillier, Director of Event Management, Renaissance Washington. Arrange breaks in the exhibition area, he adds, and set up lunch in the center of the show floor or at corners.
• Understand regulations and preplan to avoid surprises. By investigating the loading dock and how freight moves in and out, for example, you’ll know how trucks are staged around the hotel. Or, if you spiff up the event with pyrotechnics, be sure the ballroom’s construction permits this.
• Avoid exhibition halls converted from garages, with 12-foot ceilings and pillars. According to planners, this is the worst scenario.
• Partner with third-party vendors experienced with the property, and obtain a clear budget.
• Consult references for those who have worked in the facility, to uncover any “gotchas.”
If you’re looking to maximize spend, a hotel venue:
• Helps guarantee room block pick-up.
• Allows for a single point of negotiation for all of a show’s costs. This can mean complimentary meeting room rental in exchange for guaranteed food and beverage.
• Can package such show components as audiovisual, electrical and security.
• May minimize or not require transportation or shuttling, saving dollars that can be reallocated to upgrade the show.
• Is more likely to discount hall rental fees post-9/ll. Prior to that, many convention hotels rarely gave on net square footage charges.
• Can lower labor costs. “Some groups that move to convention centers are shocked when profit margins take a nosedive,” explains Teri Tonioli, Vice President of North-Central Region, Conferon Inc. “If the usual costs are $100,000, they’ll be $300,000, where unions are involved.”
• Can be extremely cost-effective if a show organizer is flexible with dates and can sign multi-year contracts.
• Has a vested interest in your success, so utilize hotel staff expertise. “Have the hotel review the exhibitor prospectus before sending it out to ensure that you have not forgotten to include all costs in pricing the booths,” says Moore. |
