Posted on: January 26 2010 | Posted in: Latest NewsFewer attendees expected at conventions; Katrina cancellations still a factor
Convention outlook for 2010 hits N.O. area hotels hard
Fewer attendees expected at conventions; Katrina cancellations still a factor
New Orleans CityBusiness.com
Posted: 10:48 AM Monday, January 18, 2010
BY: Deon Roberts, Online Editor
Several hundred vendors pack three halls at the New Orleans Morial Convention Center in May of 2008 for the Helen Brett Enterprises jewelry show.
Jeff Anding expected 2009 to be a “breakout” year for New Orleans’ convention industry.
“We had (booked) the most amount of larger conventions that we had in the four years since the hurricane,” said Anding, the New Orleans Metropolitan Convention and Visitors Bureau’s director of convention marketing.
Last year was also supposed to bring plenty of midsized meetings to New Orleans. It took about three years to put those meetings on the books, but the national economy turned south and a lot of the events never materialized.
“It just deflated,” Anding said. “We ended up being much lower than anticipated because of the economic fallout.”
As 2010 gears up, those involved in the city’s hospitality and convention industry are wishing for a turnaround - not only more meetings but also more attendees to give a boost to hotels, some of which saw fewer convention-goers last year than expected.
But according to some indicators at the start of the year, 2010 might not bring a major uptick in conventions, and hotels might see even fewer convention guests.
As of Jan. 1, the CVB had booked 1.04 million room nights at metro area hotels for 2010 convention-goers. That’s 8.6 percent fewer room nights than the bureau had booked as of Jan. 1, 2009. The CVB figures do not take into account bookings handled directly through the hotels.
The number of meetings booked through the CVB is up by 11 at the start of 2010 compared with what was booked at the start of 2009, Anding said.
“So we are almost dead on par with 2009 at this time,” he said. “We hope to surpass the number of meetings we book â€¦ for the year to make 2010 better than 2009.”
The CVB booked 661 meetings in 2009, down from the average 700 that the bureau considers a normal year.
The New Orleans Morial Convention Center has scheduled 83 events for this year, down from 106 last year and 111 in 2008, said Tim Hemphill, the center’s vice president of sales and marketing.
“Now the 83 shows in 2010 represent more attendees, however, because we have a couple bigger shows,” he said. “That’s the important matter; how many people come to town.”
Still, some hotels aren’t seeing a jump in convention guests, and they are reporting flat growth in room bookings at the start of 2010 compared with the same time last year.
Such is the case at the Sheraton Hotel on Canal Street, where convention guests account for 70 percent of business, said Tommy Morel, area director of sales and marketing for the Sheraton’s parent company, Starwood Hotels & Resorts.
Many are not expecting great things out of 2010.
“2010 was not projected to be a great year,” said Mavis Early, executive director for the Greater New Orleans Hotel & Lodging Association.
For one, the city is still feeling the effects of meeting cancellations made after Hurricane Katrina, she said, adding that meetings as far as 10 years out were axed.
Early said some conventions held in New Orleans last year had far fewer attendees than expected because of the slowdown in the national economy.
Anding agreed. In some cases, he said, attendance at conventions was off by as much as 30 percent.
One factor responsible for the decline in convention attendance in New Orleans and nationwide is the “AIG effect,” Early said, referring to American International Group Inc., the insurer that splurged on a VIP excursion for its executives after being bailed out by the federal government.
The ensuing national focus on lavish corporate spending led to a drop in corporate travel, and New Orleans lost some corporate meetings last year, Early said.
“So we have the post-Katrina (convention) cancellations, we have the AIG effect and then you have the downturn of the economy,” she said.
The drop in convention attendees has hurt local hotels, Morel said. At the Sheraton last year, actual room use was down 25 percent to 30 percent from what had been booked, he said, adding that in an average year the figure is closer to 10 percent to 15 percent.
Getting conventions to New Orleans is harder than it was before Katrina, thanks to new convention centers sprouting up throughout the country, Early said.
“It’s a very competitive business right now,” she said. “Very cutthroat.”
Because of the economy, the New Orleans Morial Convention Center is offering lower rent and other incentives to lure meetings. Other cities are being forced to make concessions, too, Hemphill said.
Nick Bazan, general manager and co-owner of Rio Mar Restaurant, which is near the convention center, said as much as 60 percent of his business comes from convention-goers and tourists.
“The convention schedule was strong last year,” he said. “It was a good year overall - not a great year - but we had a good first two quarters.”
He said he’s anticipating a “bleak” convention schedule for 2010.
“We started reacting to that last year,” he said. “We knew that it was coming, especially with the economy.
“Business is down, but I think that the locals will support us.”â€¢