City's convention business slumps to a new low

THE BALTIMORE SUN

Baltimore's convention business dipped in the most recent fiscal year to its lowest level since the size of the city's convention center was tripled in 1997, according to statistics released this week.

Convention-related hotel bookings also slumped to two-thirds the budgeted level in the fiscal year ended June 30, the Baltimore Area Convention and Visitors Association reported.

Months of turmoil at the city's convention and visitors bureau - while its operation underwent a review that led to its president's ouster - along with a national convention travel slump contributed to the miserable showing, industry officials said.

The fiscal 2003 hotel bookings of 364,188 rooms, adjusted to eliminate padding that went on for years at BACVA, are a huge drop from the 491,369 hotel rooms booked for future years during the 2002 fiscal year - also an adjusted number.

Clarence T. Bishop, BACVA's board chairman, said he was not yet prepared to explain the poor results. "The board has not seen the year-end numbers," said Bishop. "They will be presented at next week's board meeting and put into context, including how we compare with other bureaus around the country. Until we've reviewed the numbers and asked questions, I cannot intelligently comment."

"It's disappointing," said Peggy Daidakis, executive director of the convention center. "You sit there and think could we have done something differently. I'm not pointing fingers, but we rely heavily on BACVA to provide the marketing initiative."

Daidakis said she did not know the precise breakdown of BACVA's future bookings by year.

"But, certainly if the trend is less than goal, it has an effect on us," she said. "With Leslie [R. Doggett] on board, we need to look at a strategic plan for how we're going to market the destination to fulfill the center's needs and the hotels' needs. But we won't really reap the rewards of the strategic plan for three to five years, unless we get lucky and find a convention looking for a new home." Doggett was appointed president and chief executive of BACVA in July.

"It's not where we wanted to be," said Debra Dignan, BACVA's associate vice president of convention sales. "What we did to react to it was we kicked it up a notch by developing a whole lot of new sales initiatives."

The bureau has doubled its sales missions from four to eight, will offer two familiarization trips to meeting planners, has planned seven customer events to promote Baltimore, plans to open an office in Washington by next month, and has required each salesperson to solicit 25 new forms of business every week, Dignan said.

In fiscal 2003, the convention center was host to 24 conventions. Total attendance at conventions and trade shows was 179,334, or more than 150,000 short of the projections that led to the $151 million convention center expansion.

Across the nation, convention bureaus have been afflicted in recent years with slumping room commitments from meeting planners with teleconferencing and Web-conferencing on the rise, Dignan said.

When meeting planners do book a block of rooms, they are requesting fewer than in past years because many convention attendees shop for cheaper rooms rather than buying into the convention's block.

Even among the largest and most successful events in the country, attendance last year was nearly 10 percent below that in 1996, said Heywood T. Sanders, professor of public administration at the University of Texas, San Antonio, and a nationally recognized expert on convention center development.

"Whatever growth that occurred during the 1990s has effectively evaporated," Sanders said.

Although booking numbers reach out into an indefinite future, and it is hard to know whether to attribute a rise or fall to the economy or other factors, a decline such as one Baltimore has seen doesn't bode well, he said. "It suggests that the future is not likely to get any better for Baltimore anytime soon."

In explaining the lackluster performance, BACVA's Dignan said its sales staff essentially shut down between July and September of last year at the request of former President and Chief Executive Carroll R. Armstrong to examine internal files in preparation for an outside evaluation.

"We continued to do the trade shows we were supposed to do," she said. "But during that time, all the proactive activity stopped. ... We totally lost our edge as far as being out there in the marketplace."

At the same time, the organization was down two key sales positions, which magnified the situation, Dignan said.

BACVA's hotel room bookings in the first half of fiscal 2003 alone had plunged 62 percent from a year earlier, according to BACVA numbers. At that halfway point, the association was sharply behind the previous year's booking pace and had met just 18 percent of its hotel booking goal, according to internal sales figures obtained by The Sun.

BACVA's use of inflated bookings came to light in a scathing evaluation performed by Performance Management Inc. of Stamford, Conn., last year, which showed that BACVA knowingly used figures that wrongly gave the impression that the organization was meeting or surpassing its business goals.

In some cases, BACVA included in its booking numbers rooms that it had no role in selling. Last fiscal year, for example, BACVA reported that it booked 523,865 rooms. But that number was inflated by 107,495.

The deception had gone on for years - before the tenure of Armstrong, who resigned in February - according to the consultant's report.

That review of BACVA came after The Sun reported in June of last year that the convention center had failed to live up to projections of a feasibility study. The articles reported that instead of the 50 conventions a year projected by those who lobbied for the convention center expansion, the facility has attracted a high of 41 conventions and a low of 26. A new low of 24 was set in fiscal 2003.

Supporters of the expansion also had projected attendance of 330,000 people at trade shows and conventions combined by the year 2000. The center has never achieved that attendance goal, which some experts contend is inflated.

The center's total attendance for fiscal 2003, including conventions, trade shows, meetings, banquets, public events and a catch-all category was 602,136 - still below fiscal 1990, when attendance reached nearly 700,000.

However, BACVA officials pointed out late yesterday that attendance at all events that the agency had booked in fiscal year 2003 - including activities at area hotels - was 401,625 in fiscal year 2003, up from attendance of 377,996 in fiscal 2002.

Even as convention booking numbers slumped in fiscal 2003, the convention center's operating deficit swelled and was expected to continue to increase in fiscal 2004.

Daidakis noted at the time that this was the first time in 20 years that the center had fallen short of revenue projections.

But a report by the Department of Legislative Services this year projected that the convention center's two-year loss for fiscal 2003 and 2004 would be $10.3 million. The fiscal 2004 deficit is expected to be $5.3 million, according to the report.

Armstrong and others have blamed the center's poor performance at least in part on the city's lack of a convention headquarters hotel.

The city has proposals from three development teams to build a convention headquarters hotel on a parcel near Oriole Park at Camden Yards or on a site on Conway Street west of the Sheraton Inner Harbor.

BACVA has not set its booking goal for fiscal year 2004. Doggett, BACVA's new president and chief executive, is trying to determine what goal would be realistic given the economy and industry trends, BACVA officials said yesterday.

Conventions fall off

Fiscal year ..................No. of Events ................ Attendance

1997 ................................. 30 ..................................... 74,105

1998 ................................. 41 ................................... 146,325

1999 ................................. 30 ..................................... 99,050

2000 ................................. 26 ................................... 110,750

2001 ................................. 39 ................................... 183,294

2002 ................................. 40 ................................... 147,105

2003 .................................. 24 .................................. 114,430

SOURCE: Baltimore Convention Center, SUN STAFF

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