Tomorrow s Congress & Convention Centres SPECIAL INDUSTRY REPORT BY:

Transcription

1 2010 Tomorrow s Congress & Convention Centres SPECIAL INDUSTRY REPORT BY:

2 Tomorrow s Congress & Convention Centres Table of Contents INTRODUCTION...3 EXECUTIVE SUMMARY & ABOUT THE RESPONDENTS...4 I. GROWTH RATES & OUTLOOK...7 II. FINANCIALS & REVENUES...9 III. NEW BUILDINGS & EXPANSIONS...16 IV. DESIGN & TECHNOLOGY...20 V. GREEN & ENVIRONMENTAL...25 VI. CLIENT TRENDS...28 CONCLUSION...31 aipc.org 2

3 Introduction In a time of rapid change for both governmental and business communities, convention and congress centre clients are experiencing significant challenges and changes that are impacting their expectations of meeting and exhibition facilities. However, these facilities are long term investments for cities and owners that must perform efficiently and competitively for many years. As a result of these trends and to gauge where the industry is headed, AIPC has conducted a study to analyze how these issues and changes are impacting venue design and management. The goal of this study is to guide further thinking around centre design, development and management and help frame the discussion about the future of convention and congress centres. It is important to note that the data presented in this report is based on what centre managers themselves are saying rather than third parties. In short, this survey presents the voice of the convention and congress centre management community and AIPC membership. In May and June 2010 AIPC conducted an executive-level survey covering congress and convention centre trends. The survey was sent to all AIPC members and about 150 nonmembers around the world. Eighty-eight percent of the survey respondents are AIPC members. The AIPC member response rate was 71%. A summary of the key findings was presented at the 2010 AIPC Annual Conference in Liverpool, United Kingdom on June 5th. The report covers the following key areas and themes: q Growth Rates & Outlook q Financials & Revenues q New Buildings & Expansions q Design & Technology q Green & Environmental q Client Trends q Conclusion There are two emphasis areas of this study one on how business performance, growth expectations and the recession have impacted thinking about the future outlook for centers, and then secondly, the factors to consider in terms of future venue design and function. A number of particularly important findings are highlighted throughout the report under the header Tomorrow s Congress Centres. The survey and report was developed by AIPC in collaboration with Red 7 Media, LLC and Managing Director of Research & Consulting, Michael Hughes. aipc.org 3

4 Executive Summary Some of the key findings from the study, as well as an overview of the respondents, are presented in this summary. q Solid top-line revenue growth is expected collectively from centres in The aggregate respondents expect 4.2% gross revenue growth resulting from 1.4% expansion in event bookings, and 1.6% growth in attendance. This suggests that venues have been able to raise prices or add new revenue streams to yield more revenue from an event industry only slowly rebounding from the financial crisis and global economic slowdown. Not surprisingly Asia is the fastest growing sector of the world with 12.5% expected gross revenue growth this year. q On the key issue of exhibition hall pricing, published rates are holding steady or increasing, but top clients are negotiating more or asking for, and receiving, discounts and incentives. According to the survey, 68% of venues are engaging in more incentive activities including rent reductions, providing added value services, cash incentives and hosted functions for select clients. q There is continued focus by venue management on developing and growing new revenue streams and services. Sixty-one percent of the respondents said they have added new revenue sources over the past five years. q Around the world, the convention and congress centre industry continues to build new venues and expand exhibit and meeting space. In fact, the industry seems to be in a perpetual building boom. For example, 59% of venues have a new building or expansion project underway or that opened over the past three years, and 65% say they are considering an expansion or development project of some type currently. q Venue managements primary technology and service interest is in wireless internet access, providing higher quality, high-tech meeting rooms, and facility environment conditions such as air conditioning, heating and lighting. q The primary client trends and requirements seen today are increased negotiations, shorter booking windows, and the demand for higher-quality food and beverage services. q The overall key finding from the survey is that the centre management role is changing and becoming more complex. In the future, the successful centre leader will have to be even more engaged with multiple, critical projects, including expansions and technology upgrades, as well as sales and marketing, finance and keeping closer track of industry trends. aipc.org 4

5 About the Respondents Eighty-eight percent of the survey respondents are AIPC members. The majority of the responding venues are owned by a government entity, although 20% are privately owned. OWNERSHIP AND MANAGEMENT STRUCTURE Local government (i.e., City or regional)... 32% Private... 20% State or Province government... 14% Combination government... 13% Government authority/agency... 9% Other... 12% While most convention and congress centres are government-owned, over half are managed by a private management company. MANAGEMENT STRUCTURE Private... 52% Local government (i.e., City or regional)... 12% Government authority/agency... 10% State or Province government... 6% Combination government... 6% Other... 13% The majority of the survey response came from Europe, followed by North America and Asia. FACILITY REGIONS Europe... 57% North America... 13% Asia... 10% Australia / New Zealand... 9% Africa... 8% Middle East... 1% South America / Latin America... 1% aipc.org 5

6 The average size of the responding venue is 45,808 square meters in terms of total function space. The average amount of exhibition space is 31,800 square meters. VENUE AREA AVERAGE SIZE Total function space m²...45,808 (median: 18,000) Exhibition space m²...31,800 (median: 10,700) Largest non-exhibit space m²... 4,409 (median: 2,020) Theatre-Auditorium seats... 3,128 (median: 2,150) Total meeting rooms (median: 23) aipc.org 6

7 I. Growth Rates & Outlook Despite the global economic crisis and recession, convention and congress centre management collectively is forecasting 4.2% top line revenue growth in calendar year Revenue is expected to grow faster than bookings and attendance, which suggests venues have been able to raise prices or add new revenue streams. In comparison, the total number of events worldwide is expected to increase by only 1.4% and attendance to grow by 1.6%. The fastest growing region is Asia, which is expecting 12.5% gross revenue growth in The data tables below breakout growth rates for revenue, event bookings and attendance by the major regions around the world. Expected Revenue, Event Bookings and Attendance Change 2010 vs All Respondents Gross Revenue 4.2% Number of Events 1.4% Attendance 1.6% 0% 1% 2% 3% 4% 5% GROWTH METRIC Expected Gross Revenue Change 2010 vs All Respondents 4.2% Asia 12.5% Africa 11.5% Australia/New Zealand 5.5% Latin and South America 5.5% Europe 2.4% North America 1.4% 0% 2% 4% 6% 8% 10% 12% 13% aipc.org 7

8 Expected Change in Number of Events 2010 vs All Respondents 1.4% Asia 12.8% Australia/New Zealand 6.8% Africa 1.1% Europe 0.0% -2.4% North America -7.5% Latin and South America -10% -5% 0% 5% 10% 15% Expected Change in Total Attendance in 2010 vs All Respondents 1.6% Asia 11.5% Africa 3.0% Australia/New Zealand 2.9% Europe 2.5% -1.2% North America -10.0% Latin and South America -10% -5% 0% 5% 10% 15% aipc.org 8

9 II. Financials & Revenues As current and near term business issues are shaping many of the attitudes managers have toward future needs, the survey asked participants for their views on business challenges and opportunities. These results are presented in this section of the report. Venue management continues to focus on developing new revenue streams and services. Sixty-one percent of centres have added new revenues sources over the past five years. Breaking out these results by the major regions of the world with the largest number of survey respondents finds that over two-thirds of centres in Europe, North America and Australia / New Zealand have developed new revenue sources, compared to only 29% in Asia. Percentage of Venues that Added New Revenue Sources in the Past Five Years No 39% Yes 61% NEW REVENUE SOURCES There are generally two sources of new revenues for centres, primary sources that include expanding or enhancing the core exhibit and meeting space rentals, technology services, food and beverage and event services and rentals, and secondary sources that go beyond providing exhibit halls, meeting space and general services. aipc.org 9

10 TOMORROW S CONGRESS CENTRES: In the continued search for new revenue sources, the secondary sources outlined below will become more common. Currently these secondary sources are only pursued by about 10% to 30% of venues. PRIMARY SOURCES y Expansions, more exhibit and meeting space y Technology, wireless, internet and AV y F&B including more catering, concessions and food courts y Event services SECONDARY y Booking entertainment-related events y Launching own events usually entertainment-based y Signage and advertising y Package service offers y Registration services y Parking y Event management assistance for clients aipc.org 10

11 While 40% of centres said their business was not significantly impacted by the global financial crisis and recession, those that were impacted mainly cut their marketing budgets and reduced staff. Other responses included focusing on cost controls, freezing salaries, reassessed capital and energy expenditures; added more concerts/cultural events; communicated more often with all staff; and added more value along with rate flexibility and discounts. Primary Response to the Global Recession and Financial Crisis RECESSION RESPONSE Not applicable our business was not impacted very much... 40% Reduced sales and marketing budget... 25% Reduced staff... 20% Increased sales and marketing budget... 17% Other... 26% Fifty-seven percent of centres turn a gross profit, net of debt service or loan payments related to construction or development. Percentage of Facilities with Gross Profit, Net of Debt Service or Loan Payments Related to Past or Current Construction or Development No 43% Yes 57% GROSS PROFIT Thirty-nine percent of all centres receive a payment or subsidy from a government entity. North America is the only region of the largest four regions based on number of survey respondents in which less than half of centres turn an operating profit. North America is the only region with a majority of convention centres receiving government subsidies. According to the survey results, 73% of North American venues receive a subsidy compared to 36% in Asia, 35% in Europe and 30% in Australia/New Zealand. aipc.org 11

12 Percentage of Venues that Receive Governmental Payments or Subsidies to Fund Operations or Pay Debt Service or Loans Yes 39% No 61% GOVERMENTAL SUBSIDIES According to the survey, 68% of venues are engaging in more incentives for clients such as providing rent reductions, added value services, cash incentives and hosted functions. Percentage of Venues Engaging in More Incentive Activities (such as, Rent Reductions, Added Value Services, Cash Incentives, Hosted Functions) No 32% Yes 68% ENGAGING IN INCENTIVES aipc.org 12

13 TOMORROW S CONGRESS CENTRES: It is expected that more incentives, and larger discount and incentive funds will be required in many regions around the world, but that the same percentage of the event market, about the largest 25% of events and group meetings, will be able to negotiate for these incentives. The number of large conventions and meetings is not expected to grow significantly. While venues around the world are engaging in more incentive activities, a significant 91% of responding North American centres say they are providing more rent reductions, offering added value services, cash incentives and hosted functions. Seventy-one percent of Asian venues and 65% of European centres are also offering more incentives. The three key metrics used to measure centre success are venue operational profit/loss, total number of events, and total economic impact. Venue Success Measurement Factors SUCCESS FACTORS Venue operational profit/loss... 91% Total number of events... 73% Total economic impact... 63% Total number of visitors... 57% Public Relations press coverage... 36% Performance of our proprietary event business... 20% Total number of booked hotel rooms... 19% Hotel community occupancy levels... 10% Visitor-related tax revenues... 9% Hotel community gross sales or profit... 3% Other... 14% Not applicable we do not formally measure... 1% The findings from the question on how centre success is measured has been analyzed by the four major regions of the world with the largest number of survey responses Europe, North America, Asia and Australia/New Zealand. The table below indicates the factors which are important success factors on a Very to Not scale. aipc.org 13

14 SUCCESS FACTORS Venue operational profit/loss Total number of events EUROPE Very Very NORTH AMERICA Very Very Total economic impact Very Total number of visitors Very Public Relations press coverage Performance of our proprietary event business Total number of booked hotel rooms Hotel community occupancy levels Visitor-related tax revenues Hotel community gross sales or profit ASIA Very Very AUSTRALIA/ NEW ZEALAND Very Very Very Very Even with more incentive and discounting activity, published rates for exhibit halls are increasing at 34% of venues and staying the same at 53% of facilities. Convention and Exhibition Space/Hall Pricing Increasing or Eroding Staying the same 53% Increasing 34% Eroding 12% EXHIBIT HALL PRICING aipc.org 14

15 TOMORROW S CONGRESS CENTRES: A key trend going forward will be the continuation of on-going analysis of where to both increase and reduce rates for all services, as well as the trend of offering more packaged services. Australia/New Zealand and Asia are seeing the strongest pricing power, with 70% and 43% of venues in these regions saying they are increasing their exhibit hall prices respectively. Forty-one percent of North American and 18% of European venues say they are increasing their exhibit hall pricing. aipc.org 15

16 III. New Buildings & Expansions The survey has provided further strong evidence that the global convention centre building boom continues. Fifty-nine percent of venues responding to the survey have a new building or expansion project that opened in only the past three years or is currently underway. The weak global economy, outside of Asia, may possibly slow the building and expansion trend, but essentially the convention centre industry is in a state of perpetual supply growth and refurbishment. A mixture of meeting and group event client demand and competitive pressure is driving this activity around the world. Hotels have increasingly invested in properties with quality exhibition and meeting spaces and this has raised the bar for the industry, and made it more competitive. TOMORROW S CONGRESS CENTRES: While there are a number of factors limiting the ability to build a new venue, expand or renovate an existing facility, there is no single factor that receives more than 30% from the respondents. This suggests that the limiting factors are considered manageable. A question is will one or more of these factors increase significantly if governments chose more longterm austerity measures instead of economic stimulus? Factors Most Limiting Required Facility Expansion / Renovations LIMITING FACTORS Non-applicable... 34% Lack of funding... 29% Lack of Government support... 27% Land availability or use constrictions... 17% Weak economy... 15% Lack of public support... 12% Lack of hotel development interest... 10% Other... 10% Venues are continuing to be built and expand as a response to market demand and competition from other government venues, hotels and private facilities. These venues also have to keep up with technology and conduct regular refurbishment projects as the facilities see heavy use from a wide range of events and group meetings. aipc.org 16

17 Primary Reasons for New Building Projects NEW PROJECT REASONS To service demand from events that needs larger convention, exhibition and meeting space... 39% Add new technology features and services... 17% Update aging facilities... 16% To service demand for more open dates... 13% As part of a regional re-development project... 2% Other... 12% Last New Building, Expansion or Major Refurbishment Project Less than one year ago 30% 1 to 3 years ago 29% 4 to 6 years ago 19% 7 to 10 years ago 12% 11 to 14 years ago 3% 15 to 20 years ago 5% More than 20 years ago 2% 0% 5% 10% 15% 20% 25% 30% LAST VENUE BUILD OR EXPANSION PROJECT aipc.org 17

18 Percentage of Venues Undergoing or Planning a New Build, Expansion or Renovation New build 17% Expansion 32% Renovation 17% No development plans currently 35% 0% 10% 20% 30% 40% NEW DEVELOPMENTS PLANNED OR UNDERWAY Twenty-two percent of European venue managers are planning a new building, while 14% in both North America and Asia are planning new builds. Overall, the following percentages of venues in each market are planning a new build, expansion or renovation currently or have a project already underway: yaustralia/new Zealand: 80% ynorth America: 68% y Europe: 64% y Asia: 50% The North American and Australian markets are primarily studying or pursuing expansions, as opposed to new buildings or refurbishment projects. Around the world government is the main source of centre development funding, followed by private investment mainly for private facilities, then facility reserves and bonds. The other responses in the survey include a combination of financial sources, bank loans and internal funds. aipc.org 18

19 New Project Financing PROJECT FINANCING Government... 40% Private investment... 23% From facility reserves... 17% Combination of Government and Bonds... 9% Bonds... 2% Other... 22% Public private partnerships are used in about four out of ten venue projects, according to the survey. Percentage of Development Projects with P3 Component Yes 38% No 62% aipc.org 19

20 IV. Design & Technology Centres primary design, amenity and technology areas of activity and concern are focused on the attendee and end-user experience. The top three design or technology features expected to be important over the next five years are wireless internet access, higher quality, high-tech meeting rooms, and environment conditions including air conditioning and lighting. TOMORROW S CONGRESS CENTRES: Most venue design, amenity and technology projects in the years ahead will be mainly focused on improving the attendee and delegate experience. aipc.org 20

21 Design and Functionality Trends, Themes and Amenities More Over the Next Five Years KEY DESIGN AND FUNCTIONALITY TRENDS Wireless internet access... 71% Higher quality, high-tech meeting rooms... 67% Environment conditions (A/C, lighting, etc.)... 60% Multi-function space suitable for local community, corporate events and national trade shows... 57% Unique overall ambience, aesthetics... 55% Better signage and way-finding... 54% High quality exhibit space... 50% Efficient transportation options (to the venue)... 49% Higher-quality food... 49% High-tech, divisible lecture halls... 49% High-tech auditoriums... 48% Food service... 42% Portable equipment (stages, risers, lighting systems on wheels)... 31% Minimized walking distances (e.g. exhibit hall to meeting rooms or food service areas)... 29% Large ballrooms with upscale finishes... 24% Increased food court and/or restaurant space... 20% Ample storage areas... 19% Increased retail space... 15% Movable sidewalks (at the venue)... 11% Increased kitchen space... 9% Additional dock space... 9% Dedicated crate storage on-site... 4% The most out-dated elements of centres are meeting and breakout rooms, exhibit halls, and ballrooms. This finding fits with the other survey data suggesting a technology and functionality focus on areas that most serve attendees and delegates. aipc.org 21

22 Most Dated Venue Elements MOST DATED VENUE AREAS Meeting / breakout rooms... 42% Exhibition halls / spaces... 34% Ballroom(s)... 24% Food and beverage areas and restaurants, concessions... 20% Atrium... 15% Kitchen(s)... 13% Pre-function space... 10% Other... 26% New Facility Programming to Increase Profitability The survey asked What kinds of new facilities and programming (regardless of whether or not you can actually create them) do you think would be of greatest benefit in increasing your profitability over the next 3 years? The responses fall in primary, meaning the most common, and secondary areas. PRIMARY RESPONSES Additional exhibition space Additional meeting space and multi-functional space Auditoriums Ballrooms Technology, wireless New kitchen and F&B space SECONDARY RESPONSES Hotel capacity and connections to hotels Transportation elements and connections Retail, other ancillary services Smaller, more sociable areas Green and environmental impact issues Broadcasting services More parking facilities Creating own events aipc.org 22

23 TOMORROW S CONGRESS CENTRES: There will be a continued search for new programs and services. The search for more programs and services to drive revenue requires more creativity and entrepreneurial approach. The secondary sources found in this survey will become more important and more common over time. Limitations Most Restricting Ability for More Revenue VENUE LIMITATIONS Lack of exhibition space... 52% Lack of meeting / breakout room space... 41% Need for more food and beverage areas and restaurants, concessions... 17% Lack of theatre... 16% Need more parking... 14% Need for more kitchen space... 10% Out dated telecommunications and internet technology... 9% Other... 26% TOMORROW S CONGRESS CENTRES: It is possible that when the global economy recovers there may be another spike in venue development, as 52% of venues say their exhibition space is limiting their growth opportunities. These perceived limitations captured by the survey will drive more development and expansions. Common Space Conversions CONVERSIONS Exhibition space to meeting / breakout space... 48% Meeting / breakout space to exhibition space... 36% Ballroom(s) to exhibition space... 31% Pre-function space to hold exhibits... 27% Other... 26% The survey posed this statement, Flexibility is identified as one of the most important features a centre needs today and then asked this question What would this mean in the context of your own facilities? aipc.org 23

24 What Does Venue Flexibility Mean Center flexibility has many different meanings. The primary survey responses outlined below relate to about half or more venues. The secondary definitions are from a smaller percentage of the industry. PRIMARY RESPONSES Faster event turnaround Meeting and ballroom turnarounds Serving a diverse mix of business Quick and inexpensive, less labor intensive Creativity, having no limitations Higher level of client service SECONDARY RESPONSES Ability to host multiple events Multi-functionality Handle last minutes changes and bookings Problem solving Retractable seating Lighting, rigging, A/V and communications capabilities Removable walls and large pre-function spaces Flexibility in services and financial / business matters The technology services and issues expected to be the most important over the next five years are audio-visual technology and services, meeting room technology, and wireless internet and phone services. It is also interesting that 51% of venue executives said their web site will become more important. Technology Services and Issues Most Over the Next Five Years KEY TECHNOLOGY OVER NEXT FIVE YEARS Audio-Visual technology and services... 65% Meeting room technology... 65% Wireless... 62% Web site... 51% Internet... 40% Telecommunications... 36% Technology staffing... 32% Security technology... 31% Paying for technology investments and upgrades... 27% Technology vendor relationships... 14% Other... 5% aipc.org 24

25 V. Green & Environmental A large majority of venues have a Green and Sustainability program in place. But only 36% have a recognized sustainability design or operating certification. Percentage of Facilities with Green / Sustainability Programs and Policies Yes 86% No 14% GREEN PROGRAMS IN PLACE The survey found that 100% of the venues in North America, Australia and New Zealand have a green or sustainability program or policy in place compared to 85% in Asia and 82% in Europe. Percentage of Facilities with Recognized Sustainability Design or Operating Certification Yes 36% No 64% RECOGNIZED SUSTAINABILITY DESIGN aipc.org 25

26 Recognized Sustainability Design or Operating Certifications TYPE OF RECOGNIZED SUSTAINABILITY DESIGN Not applicable... 32% Green Globe... 28% LEED... 11% BREAMM... 0% GMIC... 0% Other... 42% The key factors diving venues to pursue green programs are community and market expectations and requirements. Factors in Decision to Pursue Green Programs FACTORS TO PURSE GREEN Community expectations... 63% Market... 59% Building code... 13% Owner demands... 10% Other... 24% Analyzing the survey results by the four major regions of the world that responded to the survey finds differing factors driving green programs. For example community expectations are a bigger concern in Europe and North America, where this is a factor for about 40% of venues than in Asia, Australia and New Zealand where this is only a factor to 20% to 30% of facilities. Nearly half of venues with green programs say they have gained some business from these initiatives. aipc.org 26

27 Percentage of Venues that Have Gained Business from Green Initiatives GAINED BUSINESS FROM GREEN Yes, modest... 40% Yes, significant... 5% No... 42% Don t know... 15% Fifty-three percent of North American venues say they have won a modest amount of business due to their green initiatives, the highest amount of any of the four major regions that had a large sample of survey respondents. Australia/New Zealand was the next highest region with 50% of venues saying their green programs have helped win business. Asia was third with 43% but only 27% of European venues said they have gained business from their sustainability programs. Percentage of Venues that Have Lost Business from Lack of Green Initiatives Yes 3% No 83% Don t Know 14% LOST BUSINESS DUE TO LACK OF GREEN aipc.org 27

28 VI. Client Trends Event and group clients have changed as a result of the economic downturn. The primary change is that they are negotiating more often and in more depth with venues. They are also reducing their booking window to closer to the event dates. Thirty-eight percent of venues also indicate they are seeing client requirements for higher-quality food and beverage. Key Event and Group Client Trends CLIENT TRENDS Increased negotiations... 77% Shorter booking windows, they are booking closer to the event dates... 74% Requiring higher-quality food and beverage... 38% Asking for more Public Relations assistance and outreach to city and regional leaders... 30% Focusing more on event design and ambiance... 26% Requiring attendance promotion assistance... 22% Longer booking windows, they are booking further from the event dates... 3% Other... 7% Most convention and congress centres around the world mainly serve associations, as they often have to meet annually as part of their mission and charter even during challenging economic periods and the larger groups tend to move around from city-to-city or even country-to-country. Venue executives see associations as the strongest client sector currently and in the near-term coming out of the recession. It is also a positive sign that 49% of venue executives think there will be good growth from the highly cyclical corporate meetings market. aipc.org 28

29 Event and Group Segments with the Best Current Growth or Near-Term Prospects STRONGEST CLIENT SEGMENTS Association conferences and meetings... 65% Association conventions with exhibits... 61% National or International corporate meetings... 49% Local corporate meetings... 45% Governmental events and meetings... 45% Entertainment events... 28% For-profit trade shows, trade fairs, exhibitions... 25% Training events... 24% Consumer and public shows... 22% SMERF events (societal, military, educational, religious or fraternal events)... 20% Parties... 15% Job fairs... 6% Sporting events... 6% Other... 5% aipc.org 29

30 Client Requirements Today Compared to a Few Years Ago The survey asked What are the greatest differences in the kinds of facilities and services clients are asking for today as opposed to what they required three years ago? In short, clients are asking for more value from centres but for the same prices that they have paid previously. The primary (most common), and secondary responses are below. PRIMARY RESPONSES More negotiating Budget concerns, more price conscious Internet, free or lower cost wireless requested/required High-tech facilities in AV and telecom Focus on meeting and breakout room space and quality Higher food quality/creativity SECONDARY RESPONSES Public transport information and assistance More help in organizing their meeting and exhibition Environmentally sustainable practices aipc.org 30

31 CONCLUSION This conclusion provides a review of the key research findings with a view to the possible future role of centre management extrapolated from the quantitative and qualitative survey data. There are a number of overall long term implications for centres found in these responses. The focus of this study is on analyzing key issues today that give clues to how the industry will be impacted over the next five years and beyond. The executives that responded to the survey pointed to the following ways in which they expect their roles to change over the next few years. They expect to focus attention on the following areas: Continued focus on revenue and profits, or minimizing loss. More focus on sales and marketing. Managing expansions, refurbishment and hotel development projects. Watching industry trends more closely and changes impacting group and event clients. Working with new event types and categories, both client events and venue-produced events. More focus on adding services and improving quality, while working with leaner budgets and similar or smaller staff levels. More frequent and in-depth management and organizational structure reviews. The tables below outline key centre operation and business trends today and what is expected over the next few years. Centre Operation Trends Today and Tomorrow TODAY TOMORROW Periodic projects and enhancements Recent and planned expansions Technology investment Focus on facility flexibility Meeting client requirements Focused on event management and exhibitors Multiple projects and enhancements continually To continue... Increased client demands New programming, yielding more from exhibit space Increasing creativity required Focus on the attendee experience aipc.org 31

32 Centre Business Trends Today and Tomorrow TODAY TOMORROW A few core revenue sources Wider range of revenue sources About 60% turn a profit May have to get to 65% to 70% Pricing, incentives, discounts Fast client-based change/trends Periodic project management role Venue management either more quantitative or qualitative Same % of key clients; larger funds Even faster client-based change/trends Primarily a project management role More quantitative AND qualitative focused Convention and congress centers around the world have evolved significantly over the past decades. They have become more important to the local cities and communities they serve and the national and international association, corporate, government and educational event sectors as well. This has raised the profile of the industry. It has also added complexity and challenges to managing these venues. The level of competition in the industry has also increased and event and client requirements are becoming more robust and sophisticated. Tomorrow s convention and congress centres will be integral to the world s most important business, governmental and educational events and meetings. As economies and industries transform, the role of these facilities as important economic engines will only become more important, but they will also face more scrutiny. These trends are making the job of running these facilities more complex. The successful centre leader and management team will have to be even more engaged with multiple, critical venue development and enhancement projects, implementing the right technology services and strategies, and keeping on top of core functions including finance, sales and marketing, local and regional governmental issues. aipc.org 32

33 International Association of Congress Centres 55 Rue de l Amazone 1060 Brussels, Belgium P: [32] (496) F: [32] (2) E: secretariat@aipc.org Copyright APIC. All rights reserved. Reproduction in whole or in part without written permission is prohibited. aipc.org 33