Taking Wind Out of Chicago’s Sales: Upstart Cities Hope to Lure Away Convention Business

CHICAGO —  Even for a hardy conventioneer like Ian Gittlitz, winter trips to Chicago year after year are enough to spur wishful thinking about meeting someplace where wind chill isn’t a factor.

During two decades plus as an annual January visitor, he’s come to expect anything from slop in the streets and blizzards to icy winds off Lake Michigan and days “so cold your nostrils freeze in seconds.” But he shrugs it off and keeps coming. So far.

“We really do like Chicago--the restaurants, the hotels, the tradition,” said Gittlitz, publisher of a New York-based trade magazine that tracks the housewares industry. “All of that seems to outweigh the weather.”

Windy City or no, Chicago has led the lucrative U.S. convention business since its steel and stockyards heyday decades ago. It boasts a central location, a transportation hub and a convention center twice the size of any other--the 2.2-million-square-foot McCormick Center, with exhibit space the size of 38 football fields.

But Chicago is under increasing challenge from warm-weather rivals--most notably Las Vegas and Orlando, Fla.

Convention Space Is Mushrooming

Dozens of cities, many in the Sun Belt, are adding square-footage at a record pace. U.S. convention space is projected to increase 25% over the next five years, according to the industry publication Tradeshow Week.

The reason for the expansion frenzy: a quest for larger pieces of an industry that generates tens of billions of dollars annually. In Chicago alone, the industry has a $6-billion-a-year economic impact.

“If you can grab onto a big chunk of it, you’re importing money,” said Jim Reilly, chief executive of the Chicago Convention and Tourism Bureau. “People come, spend their money and leave town.”

But the build-it-and-they-will-come approach could backfire for some, particularly if the economy continues to chill.

Heywood Sanders, a longtime scholar of convention centers, said the business for large trade shows has been flat for several years and appears headed into decline. He cites Tradeshow Week figures showing a decrease from 4,400 large U.S. trade shows and conventions attracting 101 million people in 1996 to a projected 4,333 shows and 75 million attendees in 2001.

“It doesn’t matter if you’re Anaheim or Austin, if you’re Buffalo or Cleveland, everybody’s convinced that their city is going to win,” said Sanders, director of the public administration program at the University of Texas at San Antonio.

“But some cities have already lost at the hands of Las Vegas and Orlando, and the question now becomes ‘Who’s going to lose the biggest over the next five or 10 years?’ ”

No showdown better illustrates the high stakes of the convention wars than the battle between Chicago and Orlando over hosting the nation’s largest medical meeting.

Every year since 1985, an affluent army of doctors, spouses and exhibitors has descended on Chicago after Thanksgiving for the Radiological Society of North America convention. Any retailer on tony North Michigan Avenue can tell you the annual gathering of 65,000 attendees generates more than $100 million for the city.

“They’re spenders,” said Mike Christ of Tiffany and Co. Jewelers, past president of the Greater North Michigan Avenue Assn. “They’re a vital part of our business.”

But four years ago, lured by the promise of a better deal and new environs, the doctors jolted Chicago by voting to move their meeting to Orlando for 2002 and 2003.

Alarmed local officials likened it to losing a sports franchise. Another huge convention, the International Housewares Show, the one Gittlitz attends, said it too might move to Florida.

“There was the worry that it was the crack in the dam, that other shows would follow,” Reilly acknowledged.

Moving into crisis mode, Mayor Richard Daley put the white-collar equivalent of a SWAT team on the job. The city negotiated new work rules with eight trade unions to reduce hassles and costs, guaranteed more downtown hotel space and agreed to pay half the show’s busing costs.

The effort paid off. In December 1998 the doctors reversed their decision and committed to stay in Chicago through 2010. The housewares show also opted to remain through 2009.

The battle may be over, but not the war. Orlando officials, confident the Florida sun will eventually melt the hearts of the radiologists, admit they’re still in regular contact with the group. Their pitch: We’re more convenient, we have more hotel rooms, we’re a resort destination, and--psst--let’s talk about costs and perks.

Nine years isn’t that long in the convention business, said Bill Peeper, president of the Orlando/Orange County Convention and Visitors Bureau.

“I guess we’re putting Chicago on notice,” he said.

The convention industry took off in the 1970s, but there’s never been growth like this, said Douglas Ducate, president and chief executive of the Chicago-based Center for Exhibition Industry Research.

By year’s end, Las Vegas will have nearly doubled the size of its convention center--it will then be a close runner-up to Chicago. Orlando is adding 1 million square feet, which will vault it ahead of Las Vegas in 2003.

Some Challengers Might Be Taking Risks

Chicago, too, is lobbying for expansion, claiming it’s turning away business because even the monstrous McCormick isn’t big enough for all the shows it could host simultaneously.

Boston, Buffalo, N.Y., Hartford, Conn., Kissimmee, Fla., and Omaha all are building new facilities, and Atlanta, Pittsburgh and Portland, Ore., are undergoing major expansions. Tens of thousands of new hotel rooms designed to draw convention business also are being built.

“The whole country is in a frenetic building boom to get a piece of the action in the meetings industry,” Peeper said. “It’s not just the megashows. There is a vast market out there for the 300, 400, 500-room meetings that are really the daily bread and butter for any city.”

While prospects for long-term growth look solid--the industry has shown steady growth despite four recessions since the ‘70s, Ducate said--shakier near-term prospects mean those making major investments into expansions could be taking multimillion-dollar gambles.

“Some cities will simply find that their convention centers aren’t that full,” Sanders said.

Ducate, whose group is an industry cheerleader, said there might still be enough local demand from thousands of smaller shows to keep the expanded centers buzzing.

The national economy may be the final arbiter on whether the expanded halls are packed or full of echoes.

“The exhibition business tends to mirror the industries it serves,” Ducate said.

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On the Net:

Center for Exhibition Industry Research: https://www.ceir.org

Tradeshow Week: https://www.tradeshowweek.com