A Retooling Approach at the Convention Center

November 4 2010 | Latest News

Ernest N. Morial Convention Center, now 25 years old, focuses on a new growth strategy
November 03, 2010

Twenty-five years after opening as exhibition space for the 1984 World's Fair, the Ernest N. Morial Convention Center - New Orleans is no longer poised to grow through the furious physical expansion that defined its early life, tourism officials said. And while they are still courting them, officials said, the building's growth model is no longer focused around attracting the mega-meetings that have been used to fill it.

The Times-Picayune The Ernest N. Morial Convention Center has hosted a number of events over the years, including the Work Boat Show.

Instead, officials, who will meet today to celebrate the riverfront facility's 25th anniversary, say they are in the middle of a period of transition that will see the center grow through refinement of the already existing structure and the attraction of more niche markets.

"What we're having to do now is the same that every center in the country is having to do: diversify and broaden our base of business," said Stephen Perry, president of the New Orleans Metropolitan Convention & Visitors Bureau. "And that task is a difficult one in a modern environment."

With associations and corporations still recovering from the national recession and a glut of meeting spaces across the country fighting for their limited business, convention centers throughout the country are searching for ways to remain viable and profitable, Perry said.

Although, the transition has been ongoing for the local convention center since 2006, but officials are beginning to assign a more laser like focus to their plan.

In its lifetime, Ernest N. Morial Convention has hosted many of the city's premiere events, including carnival balls, major political conventions and music festivals.

Last year 499,567 people attended 103 events at the convention center that had an economic impact of $1.69 billion. The attendance and event figures for 2008, 499,756 and 111 respectively, were slightly higher. That year, the economic impact was measured at $1.68 billion.

"I call it the largest and only factory in the city," the center's General Manager Bob Johnson said. "We support 24,000 jobs in the local economy."

Over its 25 year history, the convention center has had a $48.1 billion impact on the local economy, according to data provided by the center.

"Because of the quality and size of our facility we're one of the top tier convention destinations in America, in a city that is no where near top 10 in size," New Orleans Metropolitan Convention & Visitors Bureau President Stephen Perry said. "What is so critical about the center is it allows you to diversify the mix of the tourism industry in New Orleans because it provides a capacity for every size of meeting for virtually every major association and corporation in the United States."

This weekend, for example, the National Association of Realtors is expected to bring 20,000 attendees to the center.

Construction on the first phase of the then New Orleans Convention Center began in 1981 and was completed in May 1984 to replace the 137,000 square foot Rivergate meeting facility. The city's meeting needs had outgrown the space by the late 1970s. The building's first use was as an exhibition hall for the 1894 World's Fair, which lasted from May to November of that year. But the convention business kicked off inside the center in January of the following year.

Demand was so great that a second phase was opened in 1991, doubling the building's size.

The center was renamed the Ernest N. Morial Convention Center - New Orleans in 1992, in honor of the mayor who had pushed for its development.

The third phase opened in 1999, the same year the center hit an attendee high of 885,997.

"In each phase, the city took a quantum leap in new restaurants opening, in new cultural venues opening, in new hotel construction," Perry said. "And that has spurred tremendous new property tax income for the city of New Orleans and it also spurred the creation of tens of thousands of new jobs in the hospitality industry."

By 2000, the convention center was the third most popular place for hosting the nation's largest trade shows, according to TradeWeek, an industry magazine.

When the center's board began contemplating a fourth phase of development, Reuther said, it was already turning down millions of dollars in business.

"It was all geared toward demand." Reuther said. "In the earlier days, it did really well. It did what it was supposed to do. It created jobs and generated revenue."

Despite the three expansions the building remained profitable through 2001. But its economic impact and attendance began to decline the year after the third expansion opened.

AndBut a downturn in the travel spurred by the 2001 terrorist attacks in New York, Washington D.C. and Pennsylvania changed that. The following year in 2002, the center hosted just 85 events and 593,803 guests, who provided an economic impact of $2.69 billion, down from a record $3.35 billion, the year before the attacks. And for the first time in its history the facility was operating in the red.

Hoping to increase interest in the building, officials decided in 2003 began making plans to add a fourth phase that would expand the center from 1.1 million to 1.6 million.

The so-called Phase IV space, however, was mired in conflict and litigation because of disagreements about who would build the site and the project was delayed for several years. Work to clear out the overgrown field that would become the 500,000 square foot expansion began the week before Hurricane Katrina hit and was further delayed.

The storm shut down the immediate plans for the expansion and also produced a protracted business slump that has only been exacerbated by recent events, including the fettered demand nationwide for what has become a glut of exhibit hall space.

"The dynamics of selling the convention center have changed markedly over the last five years," Perry said. "Back in the late 90s we only had five major competitors, now we have over 25 major competitors."

That means that New Orleans, which used to count on having most major association meeting groups host an event in the city every four years is now adjusting to a larger window of time without those groups as they visit new places.

It has also meant that the convention center is being offered at a very steep discount, with heavy incentives, to meeting groups just to get them in the door.

"They are more austere. They are looking for more value," Johnson said. "They are trying to save money for their association and their attendees."

These days new competitors aren't just other convention centers, but large, luxury hotel properties such as the Gaylord Hotels, which offer vast meeting space, hotel rooms, restaurants and some shopping all under one roof.

"Like any factory there are cycles and we are coming out of a down cycle right now," Johnson said."The recession caused a reset. There's no question about it."

But Johnson said he is seeing some improvement. Over the past eight or nine months the number of exhibitors and the number of attendees to events held at the convention center have both climbed, Johnson said. Both are used as a measure of the industry's economic health.

Today, the Ernest N. Morial Convention Center is a facility in transition.

The center's immediate future, very much unlike its past, will not be centered around expanding, Johnson said. Instead, the plan is to refine the current space and provide enough changes to it as to make it interesting, new and exciting enough to attract new meeting groups, but especially to spark renewed interest from those groups who have been here and may be looking for a different experience.

"In the past, it was very stark and cold and when you walked through there was no life," Johnson said.

They've added visitor boards, banner boards, furniture pods for sitting and conversing and computer charging alcoves to make the space more welcoming and visitor friendly.

One touch, adding flowers and plants from a convention center-operated nursery, to the bathrooms has been particularly well received, Johnson said.

"We're paying attention to those kinds of details," Johnson said.

Perry said another potential growth area is in consumer trade shows, like those that attract car and technology enthusiasts. New Orleans has typically struggled at landing that type of business because so few corporations are headquartered here and the population is small compared with other convention cities.

"Those types of things are prevalent in other areas, but because we're such a small area demographically we get less than our share of those," Perry said. "This has got to be a market that we and the convention center are thinking about. How can we create new events and trade shows that would draw people?"

Johnson calls the Phase IV project "postponed," but says that when the plan is revisited it will look a lot different than what had been in store. Instead of just more meeting space, Johnson said he envisions meeting space coupled with retail space and, perhaps, an outdoor exhibition and concert area.

"It would give our visitors to New Orleans a new experience and that would help us compete with all the other cities that have begun to show up in our competitive set," Johnson said. "For us to maintain our position as a destination we have to keep thinking about the experience that people have when they come to New Orleans."