Big Ideas

Weights and Measures at an Aviation Summit

How do CVBs and DMOs calculate the total value of hosting a certain meeting? By focusing on those factors you can’t count, such as prestige, reputation, and public image, as much as those you can.

‘Economic impact’ has never had so many components.

Compared with some of the multimillion-dollar events that Albuquerque was bidding on last year, the 300-attendee, three-night meeting was simply ‘medium-sized’ – but Dale Lockett, president and CEO of the Albuquerque Convention & Visitors Bureau, couldn’t have been more excited.

This was no ordinary business conference, it was Boyd Group’s 16th Annual International Aviation Forecast Summit. Airline executives, industry leaders, and the press would be flying in from across the world to discuss the latest economic projections and market data.
 “It was a small group in terms of room nights and direct spend,” Lockett said, “but for us as a destination that has been touted as ‘up-and-coming’ to have the leadership of our domestic airlines meet and experience the city firsthand – I don’t know how you put a value to that. It’s absolutely priceless.”

The possibilities for meeting professionals to activate, lobby, and educate stakeholders are endless.

“Priceless” meetings are a difficult concept to communicate during city budget reviews. It may not be possible to quantify the benefits of national press coverage and future business opportunities, but for Lockett, it was important to articulate the total impact of the aviation summit on the city.
“That’s the ultimate quest for DMOs: How do we value what we’re doing?” Lockett said. “It’s becoming more challenging and complicated.”

Unseen Forces

It’s especially challenging when you realize that while meetings and conventions are big business – worth more than $260 billion a year, according to the Convention Industry Council’s (CIC) landmark Economic Significance of Meetings to the U.S. Economy study released last year – the value they bring to a destination is more than just monetary. Yes, with the right metrics, a CVB or DMO can show city officials exactly how raising hotel taxes affects sales at the local convention center. Or how a high-profile trade show can generate the equivalent of millions of dollars in advertising for local hotels and attractions with a relatively small direct spend. The possibilities for meeting professionals to activate, lobby, and educate stakeholders are endless, said Gregg Talley, CAE, chief strategy officer for CIC and president and CEO of Talley Management Group, as long as you have the right data.

But many events – such as Albuquerque’s aviation summit – have a value that goes beyond direct economic impact, with opportunities that can’t be quantified by any tool. They are, to use Lockett’s word, priceless. Pittsburgh, for example, had a chance to show off its transformation from blue-collar steel capital into a thriving, eco-friendly metropolis when the city hosted the G-20 Summit of world leaders in 2009. The media coverage alone was worth at least $100 million to the city, according to Craig Davis, president and CEO of VisitPittsburgh. “We were able to say, ‘If Pittsburgh is good enough for the leaders of the free world to meet in, then it’s certainly good enough for your meeting,’ ” Davis said. That strategy worked. Pittsburgh has already booked at least five major events as a direct result of the G-20, Davis said, including a gathering of global leaders for the United Nations’ World Environment Day in April 2011.

Not every stakeholder was convinced that hosting the G-20 was a good idea. Extra security would cost more than $19 million, and downtown Pittsburgh essentially would have to shut down for the duration of the event. “Locals questioned why we would suspend commerce, ” Davis said, “and we were able to say, ‘Because it makes so much sense.’ What kind of message would it send if Pittsburgh passed on this? You have to embrace these things. It was a lot of coordination, but so worth it. It’s part of our résumé now.”

Charlotte, N.C., hopes to see a similar boost in future bookings after it hosts the 2012 Democratic National Convention, which will bring more than 30,000 delegates and 15,000 members of the media to town this September. Hosting an event of this magnitude and prestige shows that the Queen City can confidently handle citywide events with ease, according to Mike Butts, executive director of Visit Charlotte.

“Communicating direct spending and economic impact are invaluable tools for CVBs hosting large-scale events,” Butts said, “but it’s also important for us to communicate the positive customer experiences and the 50,000-plus jobs in the city’s hospitality community…We strive to share with our stakeholders and community just how these organizations best utilize city assets and why they chose Charlotte, so they have a vested interest in continuing to support events that impact the city.”

Some events deliver less-tangible value from the attendees they attract rather than the press coverage they receive – such as AIBTM, the Americas Meetings & Events Exhibition, which draws thousands of convention and meeting buyers from across the country. Baltimore won a three-year contract to host AIBTM, beginning with the show’s debut last year, and Tom Noonan, president and CEO of Visit Baltimore, makes sure to invite Mayor Stephanie Rawlings-Blake to walk the show floor. “When you bring the mayor and council members in, they see what all the different cities are doing to win meeting business,” Noonan said. “It’s not that [other cities] are doing more, but it’s the sheer volume of competitors. We have to fight for these meetings! Most mayors and city council members get it, but to see it in action is a real eye-opening experience.”

Building the Brand

There’s also the question of the ultimate intangible: reputation. How a destination is perceived – in terms of hospitality, friendliness, business and cultural relevance, prominence, physical attractiveness, and any number of other subjective measures. It’s difficult to calculate the value of a good reputation and even more difficult to buy one, because a good reputation is a tapestry of many different interwoven threads – and it’s not always apparent where each one is coming from. But that’s not to say a destination can’t earn a good reputation.Indeed, Cincinnati has found that some of the best returns on the multicultural events it hosts have nothing to do with money. Instead, these events are helping overcome a negative image that was set in April 2001, when racial tensions sparked a four-day riot in city streets. Cincinnati’s attraction as a meeting destination for minority and multicultural groups was devastated by images of looting and unrest. The solution was Operation Hospitality, a campaign launched by the mayor’s office to win back convention business by involving local stakeholders such as the Chamber of Commerce, the chief of police, and community groups and associations.

Thanks to the team effort, said Jason Dunn, director of multicultural affairs for the Cincinnati USA Convention & Visitors Bureau, Cincinnati has attracted 12 of the top 25 African-American conventions – including the 2008 NAACP Annual Meeting, the 2008 National Baptist Convention USA Inc., and, in 2009 and 2010, the Gospel Music Workshop of America – and is competing for the other 13. And while these large association conventions certainly bring in money, they also can boost membership in area chapters, increase tourism, and support the mission of local community groups and boards. “For multicultural events, word of mouth travels more quickly than any other type of advertising,” Dunn said. “After we show that we can host these types of conventions, we grow the business. It’s a team effort from the entire city, and together we show success.”

Branson, Mo., has its own image problem to deal with, but for vastly different reasons. The city is the self-proclaimed “Live Entertainment Capital of the World,” with more theater seats than Broadway, according to Bill Tirone, CMP, CEM, assistant general manager of the Hiltons of Branson complex, which includes the Branson Convention Center, the 290-room Hilton Branson Convention Hotel, and the 242-room Hilton Promenade at Branson Landing. From the 1950s onward, bus tours and military reunions contributed to most of the demand, Tirone said, but both segments have shown significant declines over the last four or five years as a new generation of travelers has entered the market.

The city opened the Hiltons complex to tap into the meetings and convention business, but local theater owners weren’t happy. Convention attendees don’t go to shows, they said, and group sales were still declining. “Convention delegates don’t come on a bus. And they pick up retail, not group, tickets,” Tirone said. “There is nothing that identifies them as conventioneers. So, we did a survey that determined convention delegates do go see shows. Of course they do! We have data to support that they go to see two or three shows, especially if they have free nights.”

The survey showed that meeting and convention attendees contribute nearly $16 million annually to the local economy, and that 25 percent of them spend money at attractions and businesses outside the convention-center area. Last year, the center booked nearly 100 more event days than expected, Tirone said, and is “two to three good corporate-type meetings or conventions away from breaking even” – two to five years ahead of schedule.

A focus on image is also paramount for Nashville, another destination famous for its entertainment roots. By strengthening the “Music City” brand, the Nashville Convention & Visitors Bureau helped win support for the Music City Center, a new, 1.2-million-square-foot convention facility opening next year. “It’s a long process; you have to hone your message and be consistent,” said Nashville CVB President Butch Spyridon. “We have been shot at from every side by opponents, but we never changed our message. We hammered in the brand and said this center will elevate our game.”

Even as critics took aim at the Music City Center, Spyridon said, city leaders were strongly supportive of efforts to increase meetings and events in Nashville. “Today, there’s the most incredible level of support – the most I’ve seen in 30 years,” Spyridon said. “Our elected leaders really get the brand. We don’t let up, and we take nothing for granted.”

The survey showed that meeting and convention attendees contribute nearly $16 million annually to the local economy, and that 25 percent of them spend money at attractions and businesses outside the convention-center area.

Because even when you’re talking about intangibles that are beyond dollar-based value, in the end you’re still talking about money. A positive image attracts some serious capital investment – as Albuquerque recently learned. While the city’s aviation leaders had attended the Boyd Aviation summit before, they’d never participated as hosts. It made a world of difference. And with airlines having suffered in the economic downturn, the timing “ couldn’t have been more perfect,” said Jim Hinde, director of the City of Albuquerque Aviation Department, to show off the city’s aviation history and New Mexico’s future as a commercial spaceport.

“The immediate and major benefit to us,” Hinde said, “was to be able to bring together airline CEOs and top hitters in the aviation industry, network, and spin that off in different economic opportunities.”

A Better Baseline

As the country and the world continue their slow emergence from recession, CVB and DMO leaders will need to continue identifying different economic opportunities and fight for every line item of funding – which is where bottom-line, dollar-driven value truly becomes part of the equation. Even in good economic times, the importance of articulating and quantifying the overall impact of meetings and conventions to local stakeholders remains constant.

“There is a greater desire by everyone to really understand the economic impact of what they’re doing,” said Christine “Shimo” Shimasaki, CDME, CMP, managing director of the program for Destination Marketing Associations International (DMAI), which last year introduced a new tool called the Event Impact Calculator. “We’re in an era where more sophistication is required for investments of any kind of dollars.”

For years, Denver measured the value of its meetings and events by the size of the room blocks they generated, according to Rachel Benedick, vice president of sales and services for Visit Denver. But as Internet deals flourished, attendees increasingly began booking rooms outside contracted hotels, and businesses would report strong sales without linking the increase to convention attendees. Something had to be done, Visit Denver realized, to connect the dots between meetings and the local economy.

So last year, the bureau began using the Event Impact Calculator, joining more than 80 other DMOs that have adopted the tool, which, instead of focusing solely on direct spend, estimates the economic impact of an event by looking at revenues, job creation, and economic stimulus. The calculator draws data – updated yearly – from eight sources, including the U.S. Bureau of Labor Statistics, Oxford Economics, the CIC’s Economic Significance Study, and DMAI’s own historical database. Users input event type, industry focus, duration, and year of event; number and type of attendees; and any available information on event costs and contract values. They get back a comprehensive estimate of the return on investment and impact on the local economy. “One thing we always struggle with as bureaus is that it’s hard to get apples-to-apples comparisons on value,” Benedick said. “This tool gives us a baseline that is consistent, reliable, and robust.”

While national studies like the Economic Significance Study are essential in creating standardized parameters to judge the economic impact of meetings and events, Shimasaki said, they’re expensive, become outdated quickly, and are difficult to apply to local markets. “Quantifying the economic value of an event is what DMOs are passionate about,” she said. “We really need to educate people who are making decisions about investment dollars, from Capitol Hill to the city council, to support the ongoing growth of the industry.”

Shimasaki added: “We’ve never had the ability to really articulate the impact on jobs or to easily quantify local taxes, because these are gray areas. These are sophisticated calculations, and it’s not one number [for every CVB]. Past studies came up with a per-delegate-spend number, and now we have the ability to get way beyond that.”

Early adopters say the ability to quantify hidden areas of revenue has been the biggest benefit to using the Event Impact Calculator. “Our leadership and stakeholders have always understood that meetings are a critical part of our economy, but a lot of the information we had before came from surveying visitors,” said Nikki Moon, vice president of convention sales for the New Orleans Convention & Visitors Bureau. “The calculations that we’re coming up with now are not as random as a visitor survey might be. They are very specific and very quantifiable.”

And all of that goes back to the No. 1 lesson that the industry has learned during the years of the Great Recession and the AIG Effect: Meetings are a big deal – but you can’t assume anyone else knows that. “I’m passionate about this,” Albuquerque’s Lockett said. “The meetings industry has become so important from an economic standpoint to our community. It’s not even close to what it was 10 years ago. You cannot get corporations to relocate to your destination unless it’s a desirable place to be – and you need people to experience it. We are aggressive about going after groups that will have long-term benefits to our community.”

What Price Knowledge?

Since moving to Boston in 2010, the PAX East gaming conference has become the second-biggest convention the city hosts. And this past February, PAX East extended its contract with the Massachusetts Convention Center Authority (MCCA) through 2023, which will keep the conference at the Boston Convention & Exhibition Center for at least 11 more years.

Even a quick back-of-the-napkin calculation – multiplying PAX East’s annual 70,000 attendees, times two to three room-nights per year, times 11 years – shows that the contract will bring millions of dollars, if not billions, to Boston’s meetings and hospitality industry. Organizers project that PAX East attendance will reach 100,000 over the next decade, making the deal even sweeter.

But the traditional way of measuring the impact of an event – in terms of its economic effect on the hospitality industry – just “gets at the tip of the iceberg,” said James Rooney, MCCA’s executive director. The impact of an event like PAX East, he said, is much broader, not just in terms of commerce, but in the transfer of knowledge between conference participants and the community. Hosting events such as PAX East can and should be part of a larger economic-development strategy.

PAX East is a good fit for Boston in more ways than just room-night capacity. The Boston area, home to premier academic institutions including Harvard University and MIT, is known for intellect and innovation. “If you look at the industries that we do most of our business in,” Rooney said, “it’s the knowledge-based industries.” The $65-billion global video-game industry fits that description, attracting technology companies, game developers, and venture capitalists, as well as gaming enthusiasts.

PAX East’s long-term commitment helps to secure Boston’s reputation as a hotbed for video-game innovation, Rooney said. And in what appears to be an industry first, the contract made the tie between the gaming conference and Boston’s knowledge base explicit, by including an annual $25,000 donation from PAX East to the Massachusetts Digital Games Institute (MassDIGI), based at Becker College.

With its investment in MassDIGI, an academic and entrepreneurial center, “PAX East won’t just be coming to town for three days every year,” Rooney said, “but will have a year-round presence.” This kind of long-term partnership, which directly connects events to local business and academic communities, he said, “should be the way of the future.”

Learn more about DMAI’s Event Impact Calculator.

Corrie Dosh

Corrie Dosh was formerly a contributing editor of Convene.