Convention Center Follies. Heywood T. Sanders
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are outgrowing the facility and have stated that they will be forced to leave JKJCC if the facility is not expanded.” The second major point was the Javits center would attract new events with an expansion, with the argument that events were now unable to come “due to size constraints and date availability.” The final point was that “growth in demand is exceeding supply of exhibit space in major convention and trade show destinations including New York City.”27
The Javits study included an entire section of “Tradeshow 200 Analysis,” focused on the large cities with which New York competed and the pattern of attendance growth for the “200.” The study’s findings on overall attendance, presented in a chart of total attendance by year from 1988 to 1999, were somewhat mixed. Attendance at these large events had grown steadily from 1988 to 1996. But there was a clear and dramatic drop in 1997 and 1998. That decline was excused by Tradeshow Week with the argument that it reflected higher travel costs and “site factors such as rotational pattern and/or weather.” The consultants did not dwell on the apparent inconsistency of recent attendance trends and the historical pattern. PWC went on to present a further analysis by industry group that focused on “fast growing industries” such as telecommunications and media. That apparently allowed the consultants to conclude, “Average growth in attendance for industries consistent with JKJCC orientation range [sic] from four to nine percent.” It was those industries that really mattered to New York and the Javits.28
PriceWaterhouseCoopers also elaborated another set of growth measures in the 2000 Javits study, a set of measures unique to the firm. Since 1985, PriceWaterhouseCoopers has published an annual Convention Center Report with summary data on major convention centers that chose to provide information. For the New York study, PWC focused on the historical performance of major convention destinations, “gateway cities” with more than 20,000 metropolitan area hotel rooms. The Convention Center Report data measured both exhibit space use (largely in terms of annual average exhibit hall occupancy) and average attendance at conventions and tradeshows, much like the Tradeshow “200.” But by looking at the actual performance of a group of major convention centers, PWC was tapping the joint effects of both supply and demand.
The 2000 Javits study showed average exhibit space occupancy for conventions and tradeshows “gateway centers” at about 50 percent in 1998, up from about 49 percent in 1995 and 45 percent in 1990. The consultants argued that as available space had increased during this period, “demand for these centers has increased at a higher rate than the increase in supply of space.” Average convention attendance had gone up as well: “Between 1990 and 1998, average annual growth of attendance was seven percent for gateway … centers.” The average attendance had hit about 620,000 in 1999, up from a little over 500,000 attendees in 1995 and about 410,000 in 1990. The consultants then concluded, “Demand growth for exhibit space is expected to continue at strong rates over the next several years, particularly in major cities …. Current excess demand could occupy an expanded JKJCC.”29
The New York Convention Center Operating Corporation, the operator of the Javits Center, commissioned another expansion market analysis from PriceWaterhouseCoopers in the fall of 2003. The report the firm delivered in January 2004 lacked the bullet points of its predecessor, but emphasized that even “when the national convention and trade show markets experienced downturns or slowdowns, Javits has consistently operated at or very close to its practical maximum capacity.” The PWC consultants continued to endorse a major expansion of the Javits, boosting exhibit space from 814,000 to 1.34 million square feet, together with a nine-fold increase in meeting room space and a new ballroom. But their analysis of potential demand was obliged to deal with the changed reality of the convention business after 2000 and 9-11.30
The demand analysis in the 2004 Javits study again employed data from the Tradeshow “200” and PWC’s own Convention Center Reports. The PWC assessment of the “200” showed total annual volume of exhibit space and event attendance, rather than year-to-year percent changes. The total exhibit space use graph demonstrated that growth had begun to slow after 1998, with 2000 and 2001 about flat, followed by a clear drop in 2002, back to the level of 1998. The picture of overall attendance was rather different, with a peak in 1996, followed by two years of decline, a modest rebound in 1999 and 2000, and then a further drop. The 2002 attendance total came to just over 4.2 million—equal to the attendance in 1993, and well below the over 4.6 million in 1996. The report noted a drop of 6 percent from 2000, and attributed “Recent declines” to “economic and geopolitical conditions and associated trends in reduced travel away from home and corporate budget constraints.”31
The PWC report also discussed the performance history of “gateway centers” (based on major centers’ reports of actual performance), describing “substantial declines” in convention and tradeshow occupancy between 2001 and 2003. But the assessment attributed “these declines to failure of demand for convention/space to keep pace with supply changes, the concurrent economic downturn, and to a limited extent, event cancellations due to the events of September 11, 2001.” The decline was not limited to occupancy rates. The Javits report included a graphic charting total convention and tradeshow attendance, demonstrating a fall-off beginning in 2000. That drop brought 2003 total “Gateway” attendance back to the 1997 level. Still, the analysis concluded, “Increases and declines in exhibit space demand and attendance at Gateway Centers have been consistent with periods of economic growth and decline—a trend that is expected to continue in the future.” And as if to reassure Javits officials, the report ventured, “Javits occupancy rates have remained consistently high during periods of industry decline.”32
The consultants continued to rely on their annual convention center reports to index convention center demand. An analysis of “gateway center” trends was part of the analysis of the prospective performance of an expanded Indiana Convention Center in Indianapolis in early 2004. As with the 2004 Javits analysis, the consultants promised that center performance would vary with the state of the national economy. But, their report contended, “Over the past several years, despite difficult times experienced industry-wide, ICCRD exhibit hall occupancy has remained strong, repeatedly bordering on practical maximum occupancy.” The final recommendation of PWC was for an expansion of 275,000 square feet of exhibit space, as well as additional meeting and support space.33
PWC’s Robert Canton also shared his view of the state and future of the convention center industry with the association of center managers, the International Association of Assembly Managers, in an article in the April/May 2004 issue of Facility Manager magazine. Titled “The Sky Is Falling! Or Is It Just a Little Rain?,” Canton’s piece noted, “the good news is that demand, while not keeping pace with the most recent additions to supply, is not declining as much as occupancy rates might suggest … the current economic recovery is expected to bring demand back up to pre-9/11 levels by 2005.” And while Canton went on to describe an “oversupply of space,” he posed the question of whether that meant expansions in the “haves … such as New York, San Diego, and Indianapolis should be halted? The simple answer is, of course not.”34
Both the Tradeshow “200” and the performance of “gateway centers” also figured in PWC’s May 2006 report on the market feasibility of a new convention center in Irving, Texas. Examining the history of “200” exhibit space usage and attendance, the consulting firm described the drops in 2001 and 2002 but concluded, “Based on 2003 and 2004 growth rates, attendance and [Gross Domestic Product] may be returning to pre-recession levels.” Presenting the “gateway center” data, a series of graphs showed average convention and tradeshow attendance, as well as convention-related exhibit hall occupancy, still below the levels of 1999 and 2000. The trends summary concluded, “Growth and decline in exhibit space demand and attendance at Gateway centers have been consistent with periods of national economic growth and decline—a trend that is expected to continue in the future.”35 The firm recommended that Irving build a new “multi-purpose center” with 50,000 square feet of exhibit space.
Both the Tradeshow Week “200” data and the figures for “Gateway Centers” appeared in PWC’s report on the Gwinnett County, Georgia, convention center for the Gwinnett Convention and Visitors Bureau. And once again, PWC found market “demand to support a 50,000